What an unfortunate name, that 5G. It sounds an awful lot like a ho-hum version of 4G-plus, much as new iPhone models improve in tiny increments these days. But as this new wireless technology commences its nationwide rollout, it will increase connectivity in ways financial services organizations can hardly imagine.
And one you start to hear those appealing ringtones, it’s best not to mistake them for a more ominous pealing.
“5G is the death knell ringing for any bank that does not take advantage of the opportunity that digital presents,” says Drew Sandholm, vice president of marketing for IDB Bank.
“It’s not the future: It’s now.”
Maybe 100G is more like it, since 5G boast wireless speeds 100 times faster than we have now. Lag times simply won’t exist anymore. Mobile phones, IoT devices and apps will work flawlessly and without delay, experts say.
Speaking of without delay, banks will want to get their 5G act together now. Sandholm is no stranger to leading digital transformations at banks and says that 5G will push us further into the mobile-only world. But it will also offer new opportunities for those who actively embrace it.
Fiber-like speeds without cable
In terms of mobile history, smartphone users have enjoyed performance boosts with every new network from 2G to 4G LTE. Yet the leap to 5G will be unlike anything we’ve ever seen, offering “fiber-like speeds without the cable,” says Serhad Doken, executive of Emerging Technology Incubation and Innovation of 5G Ecosystems at Verizon.
Latency—the time delay devices experience when they ping the network for information—will plummet to milliseconds while the increased bandwidth will improve computing power. It’s like putting a broadband connection the air for everyone to access.
“I think we’re going to see it really move the needle in migrating from a physical, in-person experience to completely digital,” Sandholm says. “It will finally normalize everything on a mobile basis and completely change the landscape, especially in financial services.”
Instant customer, employee engagement
The 5G architecture will enable banks to drive real-time customer engagement in many ways, Doken says.
Not only will it enhance mobile performance but also drive rapid adoption of the Internet of Things (IoT). As the world moves from a touchscreen-only paradigm to a multimodal, multisensory one, a smartphone’s functionality will split into multiple devices. Some of them you know about (wearables); others don’t quite exist (hearables). But those and even newer devices will enable consumers to communicate, listen and interact as they’re on the go.
5G will also improve performance of chatbots and virtual assistants by boosting the speed of the artificial intelligence that operates behind the scene. Thus chatbots will respond faster and have more “human-like” conversations without pauses to find information, Doken says. Some already utilize 5G for digital assistants that serve bank employees.
“It’s a bit forward-looking but I know several banks outside of the United States have experimented with it,” he says. ANZ Bank in Australia and New Zealand has deployed it, for example, to answer employee questions about internal policies. “We’ve on-boarded this application to 5G and the interaction is so much more fluid versus 4G.”
In the brick-and-mortar landscape of customer interaction, 5G will enable banks to drive in-store engagement with digital signage. And all those neat video analytics applications we’ve heard about for years will finally have an architecture to support it.
Rene Dufrene, assistant vice president of enterprise industry solutions at AT&T, envisions a near future of video-based ATMs, tele-presence pods that connect with financial advisors and a new realm of digitally enabled connectivity thanks to 5G.
“It will enable business to create new ways to deliver services and solutions in addition to creating efficiencies with consumers who are becoming increasingly mobile,” Dufrene says.
Nor do the potential uses stop there. One bank may aim to have all calls directed to a video platform while another may leverage 5G to take advantage of blockchain technologies. Doken spoke with one bank that wanted to understand how 5G would help them with loan origination to collect massive amounts of data and process it in real time.
And for bankers already envious of ecommerce giants, here’s another point to take in: Consumer-facing businesses will grab 5G for its efficiencies and the better user experience it will afford. That will raise the bar for all brands and boost consumer expectations. Banks must keep up as the early adopters of 5G—consumers and businesses alike—watch to see whether those new expectations are met.
Biometrics, bandwidth and brainstorming
5G will also enhance biometric login and authentication. Such experiences have proven clunky thus far because information is kept on devices; faces and voice are not always recognized right away. But 5G will hold information on the network and process it at the edge location, enabling much faster performance, Doken says. This could open up the door for “anywhere-anytime-any device” banking where the consumer can quickly use biometrics to access their account.
“5G will enable you to use more easily use any screen to process or authorize a financial transaction, whether it’s on your phone, a screen on your refrigerator or your smartwatch,” Doken says. “With all the bandwidth and low latency, that’s going to be significantly enhanced.”
But perhaps the best part about 5G is that it marks another step in the democratization of technology within financial services. By reducing costs and complexities, 5G will greatly assist small banks in adopting new technologies, Sandholm says.
5G will bring fiber-like capabilities without the wires and large capital investments often required. Banks can also release applications and updates much faster. “If a bank wants to roll out this service and migrate it, with 5G they can deploy it in 90 minutes rather than waiting for weeks,” Doken says. “That’s going to put them on better ground to compete.”
In the meantime, don’t blink. The revolution will happen sooner than most people think, with 5G on target to go mainstream in most cities by 2020 or 2021. Without any time to waste, banks must create use cases to test and onboard the technology.
As Doken puts it: “Today is the time for ideation, brainstorming about use cases, doing the proofs of concept, learning and then having that minimum product ready with plans to scale up. You have to start experimenting now. Learn, break, fail, pivot and rise and repeat.”
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Craig Guillot is a business writer who specializes in retail and finance. His work has appeared in such publications as the Wall Street Journal, CNBC, Bankrate and Better Investing.