How is the 5G wave transforming banks?

Banks and financial institutions are operating in a very competitive environment. The race to acquire new customers has thickened. Digital transformation is happening in a big way and banks are leveraging technologies such as AI, RPA, APIs to meet and beat the expectations, and demands of consumers. The implementation of these new-age technologies has led to a disruptive rise in the generation of data. There are millions of transactions happening every second. Banks are sitting on huge piles of data. Even with the penetration of Cloud-based client-server architecture, it is becoming slower to transmit and process data in such large quantum. Gartner suggests that presently only 10% of enterprise data is being generated and processed outside a centralized server, which is leading to slowing down of data transmission and hence the need for a faster option This share is expected to further rise to 75% in 2025. Edge computing coupled with 5G, the high-speed network technology not only presents solution to the problem but also ushers banking to an era of new possibilities. With Edge computing, data is processed in real-time at the point of generation, and the 5G network plays a crucial role in accelerating the process. According to Verizon, 5G network can provide speeds beyond 450 Mbps to their customers as compared to 100 Mbps on 4G network. Many use cases are emerging as more and more banks have started exploiting the potential of these technologies. Banks are looking at a future where they can provide highly customized and immersive services to their customers. Personalized products can be offered to customers based on the real-time analysis of data generated on their phones and tablets. Wifi networks can be replaced by 5G network and bank employees can be equipped by pads so that they can be moving around the branch and attend to customers’ requirements more efficiently. New age kiosks can replace traditional ATMs as the utility is not limited to vending currency notes. It can capture the facial expressions of the customer along with the anonymous data from personal devices using near field communication. The data, thus collected can be analyzed with the aid of AI and results can be used to connect with the most suitable service agent for customer’s needs. For new generation users who like use banking services from anywhere, 5G and Edge technology allow for a richer experience than ever before. As data is transmitted on a need basis and network speed increased, the latency rate is substantially lowered which translates to savings for banks in terms of cost incurred in the transfer of data to and fro from a centralized data server. With 5G, mobile apps could become much lighter and offer faster computing. Users will not require to update them frequently as most functionality will be built and hosted on cloud servers. The need for downloading a mobile app can be eliminated entirely as advanced predictive AI algorithms can be implemented using 5G bandwidth through an internet browser. Virtual interactions will become more meaningful with faster audio and visual streaming. For instance, a financial advisor could communicate with client the complex asset allocation strategies with the help of a shared dashboard. Banks can come together to achieve the goal of ‘Financial inclusion’. They could establish white label branches in remote areas with 5G network, for instance. Users from different banks could utilize this infrastructure to connect with remotely located service agents. The Banking Industry is sitting on the cusp of another revolution led by Edge tech and 5G communication network. Since it is going to take at least a couple of years for 5G to become ubiquitous, industry experts have divided opinion on how fast the banks should move. Motorola and Samsung have already started manufacturing 5G compatible hardware. Since the equipment is backward compatible with 4G and 3G technology, banks can install them without waiting for the rollout of 5G across the United States. As they say, the genie is already out of the bottle, and Edge tech and 5G is going to become a critical part of banking infrastructure. This should not be a reason to adopt a hurried approach though. Banks who will holistically align their technology infrastructure towards creating use cases that are going to add value to customer interactions and enhance customer experience will emerge as leaders in the coming years.

To know more about this emerging technology and how SLK can help you leverage it, reach out to SLK BFSI Consulting Group to schedule a demo. SLK believes in ensuring continuous growth of customers by inspiring and empowering them to be the best in delivering solutions to meet global IT challenges. To further this mission, SLK is equipped with high quality Banking & Financial Services Consulting Group supported by an experienced Business and IT research team. The team leverages industry experts, expert articles, analyst firms like Gartner, Forrester, IDC, Aite, Celent among others to bring you the industry insights, trends, best practices and proposes strategies for innovation and transformation.

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