How 5G will revolutionise consumer banking
Technology has been driving changes in consumer behaviour for years. While it may be a few more years until 5G wireless technology is readily available in the UK for consumers and institutions, we are moving, albeit slowly, towards this milestone. When 5G is part of our nationwide infrastructure, it will transform products and services. Banking will inevitably follow.
For a while brands have been competing to win and retain customers on the speed, smoothness and easy of use of their services. Consumers around our digital world demand immediate gratification. 5G, with its superfast connectivity and wide reach, will aid the banking deliver on these expectations and ultimately to serve customers better.
Facilitating banks to provide their customers with flawless, lightning speed experiences and exceptional response times, 5G has the potential to revolutionise banking. More specifically, here are four ways that banks can get ahead with this technology in coming times:
Improved mobile experience
5G may reduce latency times to under one millisecond, which will provide for a true real-time mobile banking 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, are no longer just cool ideas, but imminent services.
Faster and simpler payments will like make mobile and digital payments even more appealing to the masses and merchants alike, further boosting usage. It’s also probable that many standard banking operations will extend to new channels such as wearables, internet of things (IoT) devices and virtual reality (VR) devices as these become more common and more sophisticated.
To capitalise on these technologies, it’s imperative that banks start thinking about how they can leverage these new possibilities.
Next-gen customer service
Awareness of 5G is high. Consumers are already quite clued up on what it can offer, such as hyper-personalised and instant service for users. Banks need to make sure they have the confidence in their ability to utilise the technology when it does become available. They must stay ahead of consumer expectations to ensure customers aren’t tempted by a more nimble rival.
With 5G connectivity, consumers are likely to expect banks to instantly resolve issues across all channels. Artificial intelligence (AI) and VR will likely become table stakes for the customer offering, so banks need to decide now how they will leverage automated capabilities while still offering a personalised, human touch for key clients.
Smarter security and fraud detection
Putting aside the well documented security concerns over 5G, there are ways it will greatly enhance security for both institutions and end consumers. For institutions, 5G will allow real-time updates without customer intervention and usage-disruptions. It will enable increased use of multi-modal biometric security measures that combine nuances like the user’s gait and the position in which one holds their mobile phone to carry out identity checks.
5G can significantly improve proactive fraud prevention. Tasks such as processing data in real-time, authenticating transaction amount, customer geolocation, and merchant ID all reduce fraud detection errors and false positives.
On the flip side rules around data management, protection and privacy are increasingly stringent. Banks need to conduct self-analysis on their data collection and usage practices and policies. Given that data protection regulation will only get stricter, banks need to be absolutely certain they are operating within the new rules 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 associated with obtaining credit for big-ticket purchases. Banks can handle higher volumes of requests. From applications to credit checks to tailored financing offers to loan sanction, 5G can make banks more efficient and profitable. The importance of this has been highlighted by the coronavirus pandemic, where banks are struggling to deal with the sheer volume of applications for loans.
Banks should invest in tools to marry AI, data and 5G – to run dozens of parallel processes in real-time. This will bring improvements in the speed and precision of lending decisions, and also enables personalised lending rates based on customer risk and reality.
Consumers should not lose sight of the tangible gains the banking and financial sectors will see from the next generations of wireless technology. To maximise the benefits, financial institutions need to ahead and taking steps to put relevant strategies in place now. Developing new processes and products can help banks to stay ahead of consumer demands and bring novel offerings once the technology reaches the consumers.