How 5G will revolutionize consumer banking
We are living today in a rather dynamic world where technology evolution is driving changes to consumer behavior. While it may be a few more years until 5G wireless technology truly takes over, we are slowly but steadily moving towards this milestone. When it does, 5G will reinvent our expectation of “normal” with most things going wireless, and banking too will follow suit.
Consumer centric products and services are increasingly being driven by demand for seamless buying and service experiences and the need for immediate gratification. 5G will aid the banking industry as a new tool in its armory to deliver on these expectations and to serve customers better.
5G will revolutionise the way consumers bank, with niggle-free, lightning speed mobile experiences, and exceptional response times. It will facilitate easy connections to any number of IoT devices, letting banks engage with their customers in innovative ways that make banking more intuitive and make customers’ lives easier.
But to stay ahead of the game, financial institutions need to proactively think about their 5G strategy now. Here are four ways that banks can get ahead with this technology in coming times.
Improved mobile experience
5G is expected to reduce latency to under one millisecond for a true real-time mobile banking user experience. Exciting and creative new mobile banking use cases, such as the ability to scan an image of an item in a catalogue or on a website for instant purchase, can be expected.
Faster and simpler payments will make mobile and digital payments even more appealing and should boost usage far beyond what we see today. Also, many standard banking operations will extend to new channels such as wearables, IoT devices and virtual reality (VR) devices.
In order to leverage this, banks should spend time now on evolving new strategies to bet big on the mobile device which will soon expand to phones and wearables, connected vehicles and the like.
Next-gen customer service
5G capabilities can deliver hyper-personalised and instant customer service, but to make the most of it, banks need to pump up their strategy now, to deliver well in time before consumers start to expect such experiences.
With 5G adoption, consumers will expect their banks to instantly resolve issues across all channels. AI and VR will likely become ‘table stakes’ for the customer offering, so banks need to decide now how they will leverage their automated capabilities while still offering a personalised, human touch for their key clients and for experiences that will still need it.
Smarter security and fraud detection
5G will allow financial institutions real-time updates for security improvements, without customer intervention and usage-disruptions. 5G will also enable increased use of multimodal biometric security measures that combine nuances like the customer’s gait and the position in which one holds their mobile phone to authenticate the mobile user’s identity.
Since 5G allows large amounts of data to travel across networks instantaneously, it can significantly enhance proactive fraud prevention. Technology can transmit and process in real-time data such as transaction amount, customer geolocation, and merchant ID to reduce fraud detection errors and false positives.
Meanwhile, banks need to conduct an in-depth assessment of data collection and usage practices and policy. Given the trend of regulations related to storage and use of consumer data, banks need to have a clear, candid and compliant strategy in place to manage data if they are to successfully bring new 5G-enabled offerings to the market.
Streamlined lending and big ticket purchases
5G has the potential to simplify cumbersome processes that are often associated with availing credit for big-ticket purchases - from application to credit checks to tailored financing offers to loan sanction and funds availability in one slick, seamless experience.
Banks should be investing in tools to marry AI, data and 5G to be able to run many parallel processes all in real-time. This will enable improvements in the speed and precision of lending decisions, and the ability to personalize lending rates based on risk and customer’s reality.
The banking and financial sector has a lot to gain with the upcoming 5G revolution. But to come out on top, financial institutions need to take steps to put relevant strategies in place, starting now. Developing new processes and products in sync with 5G can help banks to stay ahead of consumer demands and bring novel offerings once the technology reaches the consumers.
Harish Prasad is head banking solutions, APMEA, at FIS. The views in this article are his own.