My last blog analyzed what 5G is exactly. This next installment goes into detail of why banks should care about the new technology and how it affects mobility, payments, pop-up branches, and omnichannel experiences.
Disruption can happen when you least expect it and by seemingly unassuming technologies like cell service. Think about how Uber and Lyft used 4G to disrupt the taxi industry when cell service made it possible to combine maps and apps to make the commuting experience better for everyday consumers. That kind of innovative thinking is how banks need to approach 5G – or risk falling behind.
Banks leading the digital charge experience better financial results than those that follow. Mobile banking continues to be a popular and preferred channel for customer engagement, and despite tremendous advancement in the past decade, banks still have work to do to improve mobile customer satisfaction. There continues to be increasing pressure on banks to deliver better customer services through mobile channels.
5G is an opportunity for banks to transform the ways they interact with customers via mobile, extend banking functions not currently available via mobile into that channel, and bring more robust banking functionality to the next generation of smartphones, wearables, IoT sensors, and virtual reality. The convenience and security enabled by 5G have the promise to make mobile the center of all banking transactions in the future.
Let’s look at just some of the possible enhancements anticipated from 5G.
Mobile Applications That Combine Location Awareness and Augmented Reality
Augmented reality mobile applications have been around for more than a decade (think pointing your camera at a row of shops to display offers from local merchants over the image on the camera), but are not currently in widespread use because they require a lot of processing power, which drains the phone battery. 5G’s low latency and faster data transmission speeds will allow banks to put the intensive processing tasks in the network, keeping performance acceptable, with no choppy video.
Mobile applications can be rearchitected to keep less data on the phone or device, simplifying application architecture to be lighter and more responsive, resulting in fewer versions to support and fewer updates and instantaneous changes across all users. If you think augmented reality is just for gamers and not financial services firms, take a look at what Westpac Bank, Citibank, CapitalOne, and Visa are doing in the space.
Digital transformation challenges in banking have been well understood and the strategies to address them simple and clear. However, it is becoming increasingly apparent that the industry is reaching a tipping point in the digital transformation journey.
Other companies are working on augmented reality applications that facilitate loans through immersive interfaces (pointing your camera at a house and receiving information like neighborhood demographics, median price, buying/selling conditions and monthly loan repayments based on loans the user qualifies), applications that make the experience of retirement planning fun and simple, and applications that introduce and compare products and services.
“Pop-up” branches are an increasingly popular part of many banks’ customer experience strategy. Although choosing a bank is based on more than just it having convenient locations, branch convenience still remains an important consideration across all customer demographics. It’s a great way for banks to test new locations, provide low-cost transactional support where people congregate, implement special event engagement, and optimize their brick-and-mortar branch footprint.
The high speed and responsiveness of 5G makes possible things like facial recognition (which requires checking databases in the cloud) in a pop-up branch that 4G cannot handle. Because 5G will support a robust set of capabilities and augment them with better-performing video communications, pop-up branches can act as mobile platforms, just like food trucks. A pop-up branch will be more like full-service branches where people would have access to the services of a typical branch, including in-person customer service.
True Omnichannel Integration
As 5G becomes more pervasive, opportunities to integrate phone, watch, wearables, and connected cars will allow banks to make all these methods of interaction uniform and thus transform the customer experience.
5G provides the potential for banks to offer virtual personalized services that can streamline and enhance customer service operations across physical and digital channels. By taking advantage of 5G’s ambient computing capabilities, real-time mobile device information (geolocation, etc.) can be provided to CSRs to help personalize recommendations. VR and AR can be used to help customers visualize and understand complex budget or asset allocation strategies, while chatbots and virtual assistants can be augmented with audio and video, and real-time language translations can be embedded in mobile applications.
The combination of 5G, artificial intelligence, and big data will enable real-time information gathering, paving the way for AI-based personalized banking services.
Seamless Instant Loan Processing
5G’s high-speed, real-time data flow will help streamline cumbersome processes that often accompany big-ticket purchases. Faster end-to-end cycle time for things like loan applications to credit checks to personalized financing will enable faster approvals and access to available funds. And, the ability to integrate artificial intelligence, data and real-time parallel processing into mobile applications will improve the speed and accuracy behind lending decisions and optimize lending rates to match each applicant. Mortgage and loan approvals, for example, can use a combination of technologies to securely record property details (geo-mapping location, 360-degree view of the property in real time), scan documents, and calculate risk-profit ratios within seconds from mobile devices.
5G will connect more devices at low power, low cost, and with better reliability, leading to an increase in the number of connected devices, ranging from smartphones, wearables, and home appliances to sensors on all types of objects, public infrastructure, and even clothes. All these connected devices will talk to each other and exchange data, enabling payments to be made by phone, earphones, or even sensors on our clothes.
There are many more benefits of 5G, such as enabling access to banking services in historically underserved areas, better fraud prevention, enhanced multimodal biometric security, secure peer-to-peer lending, and targeted personalized offers.
To learn more about what 5G is exactly, why banks should care, the benefits and challenges of the new service, and what banks should be doing to prepare for the change, you can click here or submit the form below.
This blog was co-authored by Jonathan Crockett.