Ramaswamy Venkatachalam
Very soon, we’ll be using global fifth generation (5G) cellular wireless technology, and experts are of the view that this new version of wireless could make a mark by the end of this year itself. India is one of the few countries with a broad LTE coverage (4G connectivity). This has led to the largest mobile data consumption in the world. To build on this LTE growth, 5G provides the ideal roadmap for new applications and service rollout.
The implementation of newer and disruptive technology such as 5G is likely to provide thrust to the operating models of the providers. India is getting ready to implement the 5G networks by 2020 to speed up its “Digital India" and “Make in India" initiatives, and to keep up with the global technology adoption. While customers will mostly observe that 5G facilitates lightning-fast downloads, connects millions of IoT (Internet of Things) devices like smartphones, smartwatches, Artificial Intelligence (AI)-powered devices, and connecting cars to one another, they may not realize that 5G will also be a major factor in augmenting their banking experience.
5G will enable higher productivity with connected devices and will be a vehicle for an optimized, personalized digital banking experience in the coming years.
Digital wallets will take over physical wallets
Customers are increasingly opting for digital wallets. With 5G just around the corner, customers will experience a brand new homogeny between their phones, watches, wearables - to the degree that they can depend totally on digital wallets.
The accessibility, together with amplified transaction speed and personalized offers, will make digital payments more important for everyone involved. 5G can enable real-time digital transactions cutting settlement cycles and eradicating latencies. As 5G enables even more advanced innovations, it will likely boost consumer assurance in entirely digital payments and help influence more consumers to reassess their payment behaviours.
On the spot, high-end purchasing will be smooth
With high-speed, immediate data flow that 5G enables will help simplify complex processes that often accompany high-end purchases. 5G will speed up the whole process - from application to a credit check to personalized financing offer to approval and funds availability in one efficient, uninterrupted experience.
The speed and capacity will help banks investing in AI, data and 5G will be able to run many simultaneous processes all at once. This will advance the speed and precision behind lending decisions and will upgrade the lending rates to go with each candidate’s authenticity.
Not only this, 5G’s high-resolution streaming abilities will allow customers to have real-time access to video sessions with both virtual and human financial experts. These experts can help them make sound financial decisions.
Advanced fraud prevention
5G will eliminate any performance glitch with payments made by wearables and IoT connected devices. Since 5G allows more data to travel across networks in real-time, it will augment hands-on fraud prevention. Consequently, fewer legitimate digital wallet transactions will be wrongly declined at the point-of-sale for alleged fraud. This will give banks the advantage of fewer annoyed customers who may stop using their cards due to fraud prevention slip-ups.
Superior access for rural areas
Direct-to-consumer banks have made it easier for consumers to bank when, where and how they want. Yet, a majority of the Indian population lives in rural areas and lack access to high-speed broadband. As 5G becomes more ubiquitous and reasonable, it will help facilitate a more affluent digital banking experience through virtual reality-based customer support, financial counsel and wealth management support—all of which could develop financial inclusion in these areas. Another plus point is real-time language translation that could be entrenched in an application on a phone, kiosk, or tablet or PC, which can come in handy in a language-diverse country like India.
Improved security
Today, an app user has to manually update an app in case of security vulnerabilities. With 5G, banks can update and add improvements in real-time, without badgering the customer. The high speed and receptiveness of 5G make things like facial recognition - with its requirement to promptly check databases in the cloud - possible in a pop-up branch that is not possible with 4G.
In addition to this, 5G will also endorse increased use of multimodal biometric security procedures that combine elements like a customer’s way of pose and gait in which he/she holds a mobile phone to make a transaction to authenticate a mobile user’s identity.
In the end, 5G technology is likely to drive the BFSI sector to embark on a substantial makeover in the way they use technology for banking operations and customer engagements. Banks and financial services institutions need to relook into their infrastructure and be well equipped before the 5G roll out. The Institute for Development and Research in Banking Technology (IDRBT), a unit of RBI, has already launched a 5G Use Cases Lab for the BFSI sector.
The author is Managing Director - Banking and Payments, FIS.
