How 5G Can Impact the Transformation of Banking Services
How 5G Can Impact the Transformation of Banking Services

How 5G Can Impact the Transformation of Banking Services

The rolling out of 5G technology in recent years has led to broader implications for the financial sector. Known as the latest iteration of cellular network connectivity, 5G is currently being lauded for its promises of faster speeds, lower latency, higher data capacity, and greater reliability. With a projected maximum speed of around 20 GB/s, 5G could potentially be 100 times faster than 4G. As such, 5G technology must be leveraged to provide better banking assistance at a time of increased interconnectedness.

Many industries, including the banking sector, have already started formulating ways to maximize the use of 5G. Given 5G’s potential for lightning-fast speeds and continuous connectivity, banks can use this technology to provide quick, efficient, and secure services designed around customer needs. That said, here are some ways that 5G can help players in the banking landscape keep up with 21st century customer demands.

 Faster Service Delivery and Tech Adoption

Perhaps the most immediate benefit of 5G technology is its capacity to support speedy web-based services. Fast and stable internet speed means lesser wait times for site and app loading, transaction completion (via web or ATM), account application, and verification procedures. On top of that, fast speeds can help banks quickly upgrade their apps and websites to improve customer experience.

Banks that can easily connect to the web are also better at adopting new technologies designed to improve overall efficiency. Cloud technology, for example, requires a fast and stable internet connection to work properly. A cloud-based core banking system driven by robust internet connectivity provides a range of benefits such as automated back-office processes, quicker customer assistance, and an increased capacity to handle large volumes of data.

Moreover, a cloud-based banking platform allows banks to offer 24/7 services that can be accessed almost anywhere in the world and from any device in the internet of things (IoT) ecosystem. This level of availability and accessibility can also support self-service features, which significantly cuts the time needed for users to accomplish banking errands.

Hyper-Personalization of Services

The banking sector is a highly competitive landscape that entails the creation of innovative products and service offerings. 5G technology, with its super-fast speed, can help banks collate large amounts of customer data in real time. Banks can thus use 5G-driven tools and techniques to generate deeper insight from such data that will, in turn, help in the creation of personalized services and products. 

Some relevant applications lie with technologies such as data analytics, artificial intelligence (AI), and machine learning (ML), all of which rely on large volumes of data to analyze patterns in customer behavior. Lightning-fast internet speeds can help banks optimize AI, ML, and analytics to create highly customized products such as insurance bundles for particular life stages and loan offerings for particular segments of the market. Other potential applications include analytics-based budget trackers, which analyze users’ spending habits to help them plan their expenses, and AI chatbots designed to help human customer service agents address user concerns.

Some financial institutions are also poised to use next-generation techniques to create tools that help customers assess their risk posture, which would help them apply for the best loans and credit cards for their life situations. 5G enables the extensive use of AI-driven tools that allow customers to apply for loans through their apps and secure the banking services that they need the most.

Better Security and Prevention of Financial Crimes

Many financial institutions are also incorporating AI, ML, and analytics technologies to combat financial crimes like theft and fraud. Faster connectivity and intelligent tools can help authorities quickly isolate suspicious behaviors, from large withdrawals to logins from other countries. In addition, 5G can help banks quickly integrate features such as geolocation, facial recognition, and biometric authentication to heighten the security of their customers.

Increased Financial Inclusion and Penetration into the Rural Sector

One of the main priorities of banks today is the delivery of their offerings to more locations and to new population brackets. With the ubiquity of web-enabled smart devices and mobile phones, more people have been able to access banking services than ever before. 5G adds to this by ensuring seamless connectivity between banks and their customers, thus lowering the barriers even further.

Widespread 5G connectivity can also help banks penetrate traditionally disadvantaged areas. For one, faster internet connectivity allows banks to open pop-up branches or kiosks that rely only on digital banking and, in the near future, other web-enabled technologies like virtual reality (VR). Micro banking branches like these don’t require a large staff,  thus making them ideal for delivering services to rural and remote locations. Moreover, the inclusion of multilingual services through techniques like natural language processing (NLP) can pave the way for better, more inclusive customer assistance in multilingual countries.

Higher Payment Flexibility

The advent of cashless and web-based payments has resulted in an increased demand for instant payment methods that are also secure. 5G can help banks better incorporate emerging web-based payment channels such as e-wallets and possibly accommodate blockchain-based elements like cryptocurrencies down the line. Aside from helping customers feel more empowered to make purchases, a broad range of payment options allows businesses to become more tech-forward and industry-competitive. Both corporate and retail customers will gravitate towards banks that can leverage 5G technology to bring them into the digital future.

Better Connectivity and the Road to Innovation

Experts predict that there will be more than 2.8 billion 5G subscribers by 2025. Although the banking industry is already jumping on the bandwagon of web-enabled services, banks need sufficient preparation to adapt to mainstream 5G adoption on a global level. With 5G’s potential to spur fast services, tailored customer experiences, and better accessibility, banks would do well to invest in efforts to rise to industry demands and keep their systems up to speed.

Editor-in-Chief Larry has worked a decade in finance, for an international bank where he saw before his eyes how his former company invested on almost everything that has something to do with technology and advancement. This inspired him to create the company along with his then newly-formed team of professionals from different fields, different walks of life.