What is a 5G network, and how does it affect the development of the financial market?

Mobile communication technologies continue to develop rapidly, changing people's lives and businesses. Each new generation of networks, from 2G to 4G, brought improvements: higher speed, stability, and reliability of the connection. The fifth-generation network, 5G, is not just another step forward, but a whole revolution that can radically change the approach to work in various industries, including the financial sector. Let's take a look at what 5G is, what features distinguish this technology and what impact it has on the financial market, especially in Kazakhstan.

What is 5G?

5G (fifth generation mobile networks) is a new data transmission technology that provides unprecedented speed, minimal latency and the capability to connect a huge number of devices. For comparison, 4G provides an average data transfer rate of approximately 100 Mbps, while 5G achieves speeds of up to 10 Gbps.

5G technology is based on the use of new frequency bands, including millimeter waves. This ensures stable connectivity even in high-density user conditions. For example, pilot 5G projects are already being implemented in Kazakhstan, covering Almaty and Astana, which contributes to the growth of digitalization of the economy.

Features of 5G technology

5G is 100 times faster than 4G. This enables the transfer of large amounts of data in a matter of seconds. For example, downloading a movie in HD quality takes only a few seconds. For the financial sector, high speed means the ability to instantly process transactions and simplify work with large amounts of data.

The signal latency in the 5G network is less than 1 millisecond, which makes it ideal for applications that require an instant response. This is especially important for trading and automated systems in the stock markets, where every millisecond matters. For example, Kazakhstan banks can utilize this technology to expedite the credit application review process and payment processing.

5G allows for the connection of up to a million devices per square kilometer. This opens up prospects for the introduction of the Internet of Things (IoT) in the financial sector. "Smart" devices, such as terminals, ATMs, and analytical systems, can work more efficiently and with fewer failures.

5G technology optimizes the energy consumption of connected devices, which extends their battery life. This is especially important for remote regions of Kazakhstan, where the use of energy-dependent equipment can be a problem.

How to connect to the 5G network?

To use a 5G network, you need a device that supports this standard. Modern smartphones, such as the Samsung Galaxy series and the latest iPhone models, are already equipped with 5G modules.

In Kazakhstan, telecom operators such as Kcell, Beeline and Tele2 are actively developing infrastructure. As of the end of 2024, 5G covers 20 cities in Kazakhstan, including regional centers. Connecting to 5G on smartphones is done through network settings, which gives users access to high-speed Internet without the need for complex settings.

Impact of 5G on the financial market

The introduction of 5G has a significant impact on the financial sector both in Kazakhstan and abroad. Here are the key areas where the technology is already bringing tangible changes.

Faster transactions

The high speed and minimal latency of 5G allow payments to be made almost instantly. This is especially important for international transactions, which could previously take hours. For example, Kazakhstani mobile banks such as Kaspi Bank and Halyk Bank will be able to provide customers with more convenient and faster services.

Development of mobile banking

5G networks expand the functionality of mobile applications. Customers will be able to use video communication to interact with bank consultants, manage their finances in real-time, and receive personalized recommendations based on data analysis.

Improved service availability

5G will expand access to banking services in remote areas. Banks will be able to install smart terminals and ATMs in rural areas, providing millions of people with access to financial transactions.

Integrating IoT into finance

The Internet of Things, based on 5G, allows banks and financial institutions to implement technologies that simplify processes. For example, ATMs will be able to notify about the need to replenish cash automatically, and terminals will send reports of malfunctions.

Reducing risks and increasing security

5G networks provide a high level of encryption and data security, which reduces the risk of hacking and fraud. Banks can implement biometric systems to verify identity and use artificial intelligence to detect suspicious transactions.

Impact of 5G on Kazakhstan

The implementation of 5G technology in Kazakhstan is progressing actively, and, according to the instructions of the Head of State, it is expected to be completed by the end of 2025. Currently, 1,144 base stations have been installed in 20 cities across the country, including Astana, Almaty, and Shymkent.

According to the Ministry of Digital Development, Innovation and Aerospace Industry, by April 2024, Kazakhstan ranked 66th in the world in terms of average mobile Internet speed, reaching 43.6 Mbps, which is higher than in Russia, Kyrgyzstan and Uzbekistan. In November 2024, the country rose to 58th place, and the median speed increased by 51.3%, reaching 53.69 Mbps. This allowed Kazakhstan to overtake all the states of the EAEU and Central Asia, as well as countries such as Japan, Turkey and Spain.

The improved performance is due to the active deployment of 5G networks. Since 2023, Kcell and Tele2/Altel operators have been actively developing the fifth-generation infrastructure. According to the Bureau of National Statistics of the ASPiR RK, by the end of 2023, the population coverage by the 5G network was 38.2%, while 4G network coverage reached. Kcell plans to install 3,527 5G base stations throughout Kazakhstan by 2027, including 860 stations in Almaty and 621 in Astana. In addition, the operator was the first to launch 5G in the Almaty metro, providing communication to 7 out of 11 stations.

The introduction of 5G presents new opportunities for Kazakhstan's financial sector. High data transfer speeds and minimal signal latency allow for faster transaction processing, improved mobile banking quality, and more reliable communication for remote financial services. In addition, the development of 5G facilitates the introduction of innovative technologies, such as artificial intelligence and the Internet of Things, into the financial sector, which increases the efficiency and security of transactions.

Thus, 5G not only changes the face of the telecommunications industry but also has a significant impact on the development of the financial market of Kazakhstan, contributing to its digital transformation and increasing competitiveness at the global level.

Conclusion

The introduction of 5G is not just an improvement in mobile communication technologies. It is a powerful tool that changes the approach to the digitalization of the economy and business. For Kazakhstan, 5G presents opportunities not only in the financial sector, but also in other industries, making the country more competitive on the global level.

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