5G in Finance – What Do You Need to Know?
Technology adoption in financial services is on the fast track, with emerging tech becoming commonplace, such as IoT, AI, Big Data, Cloud computing, and AR/VR, all technologies that will be sped up by 5G adoption worldwide.
So let’s take a look into what 5G means for financial services, and the benefits that highly secure, low latency communications could mean for industries from banking to insurance and beyond.
Physical banking is seeing a decline, and even in the US, physical bank branches have declined by 7% in the last year alone. Recent McKinsey research found that African banking revenues could fall by as much as 33% as a result of COVID-19. Advice from the research giant is to automate and digitize credit processes, one of the most time-consuming processes currently in place for African banks and financial services. In fact, McKinsey continues that digital sales for personal loans stands at around 9% in developing markets, a far cry from the 53% seen in more developed markets.
5G provides an opportunity for banks to make huge changes to how banking works, moving to remote services such as video sessions with bank tellers, personalized ATMs with advice and support, and mobile banking that allows for submitting checks, making complex transfers, and more.
Biometric data has taken the security of wearable devices to the next level, and many consumers already use smart watches and mobile devices to pay in-store, or to share sensitive information, verifying their identity with biometrics such as fingerprint, facial recognition or even retina scanning. Voice recognition is starting to become common, alongside new technologies such as behavioral analysis; where sentiment, natural language and even typing patterns can be used as part of a multi-layered authentication process to avoid fraud and authenticate services before they are given the green light.
Cloud computing supercharges these processes, so that financial services can share data with more reliability and control, prompting compliance with new open banking regulations, and creating a financial ecosystem with all data processed on the cloud with little to no processing power needed, in real-time. Think about the impact on micropayments, such as parking, using high-speed WiFi, paying in-store, or accessing upsell opportunities for retail, all with a single click, a touchless payment, or the scan of a simple wearable or mobile device.
The low latency abilities of 5G technology means that data can be gathered, normalized, cleansed and analyzed in near real-time, so that personal banking can be given a real boost, anywhere in the world. An AI-based bank teller for example, could glean insight on location, past behavior, account details and financial history to make smart recommendations on a new mortgage, a savings account, or a suggested overdraft amount or budget limit.
Again, when integrated with additional third-party services, this can be augmented with retail or leisure activities, prompting automatic saving for example when there is change from a purchase, or suggesting a cheaper alternative to a weekly shopping staple.
Streamlining back-end processes is a huge benefit of 5G, with cloud-based technology that allows financial advisors to more quickly and easily support users, at the same time as cutting down on the manual and repetitive tasks that they spend hours of each day engaged in.
Let’s look at claims management, as just a single example. With automated claims processes, a customer could manage their own claim from a self-service application, all the way from First Notice of Loss, through to payout. This includes gathering witness statements, automating medical appointments or vehicle repair and hire, using blockchain for identity verification or security, integrating with third party information for CCTV footage or weather and location data, and paying out via Stripe or PayPal, for example. The customer gets a better user experience, and the insurer manages a hands-off claim, freeing up time for more complex tasks and transactions.
There’s a 5G Revolution Happening – Are You Ready?
Financial services and banking are just one industry that’s ready to see mammoth growth and change as a result of the 5G revolution. From manufacturing to healthcare, and from utilities to media – our latest whitepaper tracks how 5G is set to make waves in emerging economies, and around the world. Check it out right here to get the full story.