The Impact of 5G on Banking

 The current customer's involvement with most companies is characterized by ease of access and use, personalization, and on-demand availability. So, what makes you think banking is any different? To satisfy customer expectations and guarantee customer loyalty, traditional banks are moving forward with their digital transformation and modernization agendas. Furthermore, the global rollout of 5G networks will assist banks in meeting their new customer service goals.

The 5G Roll Out

The 5th generation mobile network, often known as 5G, is a new worldwide wireless standard that aims to provide low latency, dependable, and high data capacity connections. 5G networks are being pushed out over the world after some delays. More than 125 nations have already made investments in 5G technologies. 142 nations started 5G services as of May 2020. By 2025, the world is expected to have more than 2.6 billion 5G connections, with the United States, North East Asia, and Western Europe leading the way. Banks must match their digital transformation strategy with the prospects of 5G as more nations adopt this technology.

Advantages of 5G

In comparison to earlier generations of wireless networks, 5G has a number of distinct benefits. The first is data transfer speed, which allows for faster video streaming. It's also a major driver of new technologies such as edge computing and artificial intelligence. The second factor is improved connection, or the capacity to serve millions of devices per square kilometre without sacrificing service quality. The third feature is low latency. With 5G, the 40-50 second latency or delay between action and result experienced by 4G networks may be decreased to less than 10 milliseconds, resulting in a seamless experience for the end customer. All three are extremely important and promising for the banking industry.

Faster Digitalization:

The banking industry today has no choice but to expedite its digital transformation. Banks can use high-speed 5G networks for complicated activities in real time and increase the productivity of their websites and applications. Hyper customized IoT device enabled financial services and solutions have a lot of promise. Banks can connect gadgets such as phones, wearables, and even automobiles to provide consistent interactions and a consistent customer experience across all touchpoints. By merging physical and digital banking channels, they can provide a full omni-channel experience.

Hyper Personalization: 

As fintech rivalry heats up, banks' goldmine of customer data is the key to providing highly tailored services to their customers. Banks must be able to evaluate massive amounts of customer data from several operational silos to identify behavior and patterns, as well as measure preferences to provide personalized products in real time. 5G networks' ultra-fast data transfer capabilities will aid banks in deploying data-centric technologies like AI and ML. This might lead to more accurate product suggestions, better financing choices, and highly tailored digital assistants. 5G networks will enable large-scale cloud computation, perhaps obviating the need for financial apps as we know them today.

Augmented Reality, Virtual Reality:

The usage of Augmented Reality (AR) and Virtual Reality (VR) in the banking sector might be enabled by 5G's higher bandwidth and reduced latency. The key to a truly immersive and engaging customer experience across all channels is 5G. On the one hand, it can be used to improve the audio, video, and language processing capabilities of virtual assistants and chatbots. On the other hand, it may allow for the usage of spatial computing, in which digital data is modified in a non-digital form to create extended or mixed reality scenarios and immersive experiences. Spain's Banco Santander is already collaborating with Telefonica on collaborative innovation initiatives including 5G and edge computing. Banco Santander uses virtual reality and edge computing technology to allow clients to virtually visit the Santander business café at the bank's headquarters in Madrid. 

Reimagining the Physical Branch Experience:

With 5G, bank branches can be transformed into smart branches. 5G might improve branch surveillance and customer identification by allowing banks to quickly deploy technologies such as video analytics, virtual reality, augmented reality, and face recognition. Banks in China, such as Bank of China and Chinese Construction Bank, have already begun to implement 5G technology in their branches to link various pieces of equipment and enhance customer service.

Pop Up Branches:

Pop-up branches or micro-branches manned by a few personnel assist in bringing banking services to remote regions or new locations to engage with new segments in an innovative way. The infrastructure is lightweight and portable, making it simple to transfer wherever it is required. It only requires fast networks and connection, which 5G will provide. To address the student population, PNC Banks in the United States has put up pop-up branches on the West Virginia University campus. It can also be utilized in the event of natural calamities that prevent people from using regular financial services. 

Financial Inclusion:

Despite decades of dedicated efforts by governments all around the world, a significant portion of the global population remains unbanked. By bringing banking services to remote and rural areas, 5G powered pop-up branches or mobile banking can assist advance the financial inclusion goal. In these places, 5G will provide the backbone for VR-powered digital banking services. Real-time language translation on mobile devices, kiosks, and other wearables would be possible because to the speed and low latency, which will be a godsend for rural customers in a multilingual country like India.

Security and Fraud Prevention:

5G technology's high speed and low latency will make real-time fraud detection easier. Banks' security flaws can be patched in real time without disrupting customer service. Banks and financial organizations would no longer be reliant on a single biometric authentication method. Multidimensional biometric security processes that mix aspects like face recognition, geolocation, and customer's physical features in real time to give immediate verification would be possible because to 5G's high speed and receptiveness.

Over the last decade, customer expectations of banks have shifted dramatically. Banks must explore embracing 5G to improve their digitalization plans as they alter their procedures and systems to cater to the modern customer. The next wave of financial industry revolution will be driven by 5G. It will also pave the way for a new era of "invisible banking," in which banking is both intuitive and invisible.