If you were to connect to the Wi-Fi of your local bank, then you might connect at 100 megabits per second. You would more than triple that connection speed if your branch offered a 5G connection.
A 5G connection would be fast enough to support the use of VR equipment. That technology would make it easier for managers to explain complex financial situations to customers in a medium with visual representations.
There are several other ways that 5G will change banking as well.
List of the Changes 5G Could Make in the Banking Industry
5G will solve the problem that occurs when several people use smartphones simultaneously in a confined space. Instead of the network becoming overloaded and reducing performance, this upgrade would allow millions of connections. It will eliminate performance issues.
Here are some of the other changes to expect from 5G in the banking industry.
1. ATM access will become more efficient.
Banks can use 5G to improve the communication speeds of their ATM network to help customers access balance information or money. It could support video communication through the equipment if help were needed for some reason. This benefit could even become the foundation of pop-up branches.
2. Customers will have better digital and physical channels.
The world of 5G would allow consumers to provide data from their digital interactions to their branch to create real-time financial product recommendations. Financial advisors could walk customers through asset allocations while looking at a dashboard together. Banks could even use the next generation of interactive chatbots with audio and video cues as part of their services.
3. There could be faster purchases for big-ticket items.
If you need financing for a significant purchase, then 5G could help to create faster approvals and personal offers through a more efficient end-to-end experience. Digital application processes could receive streamlining with this technology, allowing AI, big data, and other parallel processes to work together. Lending decisions would become more accurate, creating a reduced risk to the bank’s overall portfolio.
4. It will improve the mobile wallet experience.
About 1 in 5 older Millennials have stopped using cash because they prefer mobile payments. There will be more uniformity across all devices thanks to 5G, making it easier to manage money across smartphones, watches, vehicles, and other smart devices. This change could create a world where we can abandon the physical wallet entirely.
5. Banks will have more tools to fight against fraud.
There are sometimes glitches that occur when making payments through mobile devices today. This issue occurs because the data can experience bottlenecks on the 4G LTE networks. Banks can use this change to process more information as they determine their accuracy to reduce incidents of fraud. There will be fewer legitimate transactions denied at the point of sale and more illicit activities detected.
Challenges to Expect with 5G
The one challenge that banks will face with 5G is the shorter range limitations of this option. Firms will need to have more base stations set up in closer proximity to each other. The radio frequencies will not go through buildings at the moment either, which could cause minor communication issues in the future as well.
The benefits clearly outweigh the potential disadvantages for banks as they look at this technology. The firms that become early adopters will be the ones that experience the most success.
That means every industry leader must ask themselves one question: how can I start including 5G today?
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.
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