Widespread adoption of fifth-generation cellular wireless technology (also known as 5G technology) may be a few years off, but analysts at Deloitte predict that this newest wireless technology will begin making an impact by the end of the year. This effects of 5G availability will be broad and significant, from improving download speeds to helping connect IoT devices—but one area that will see key changes thanks to 5G’s adoption is banking.
For starters, users will finally be able to make big-ticket purchases instantly and seamlessly. Looking to buy a car? With 5G, the entire process can be sped up, from submitting the initial application and having your credit checked to getting financial approval and having your car loan funded. The speed offered by 5G in combination with artificial intelligence and data analytics will allow banks to improve accuracy in lending decisions, while the improved video streaming capabilities provided by 5G will ensure quality customer service.
The move to 5G will also likely accelerate the move away from physical wallets. The 2018 FIS Performance Against Customer Expectations survey found that almost 20 percent of older millennials have stopped using cash entirely thanks to mobile payment options. With 5G, the ease of use provided by mobile payments will be enhanced by greater transaction speed, speeding up adoption of the digital wallet.
Those concerned about fraud protection also have reason to look forward to 5G. This technology will make it possible for more data to flow across networks in real-time, providing additional information for banks to assess mobile payment transactions for fraud. This won’t just correctly catch fraudulent charges more often; it’ll also reduce the number of transactions that banks incorrectly block at the point of sale due to suspected fraud, reducing customer frustration.
Additional security features will be possible with the arrival of 5G as well. For example, banks will be able to update security flaws in their mobile banking apps more quickly—likely without the user needing to manually approve the update, which currently slows security fixes down. Even broader possibilities such as greater use of biometric security measures will be possible with 5G.
Lastly, 5G stands to improve banking access to unbanked and underbanked regions. Millions of people in rural areas still lack high-speed broadband, and as 5G expands and becomes more affordable, a wider range of services such as virtual customer support and financial advice will improve the financial health of these underserved areas.
In other words, 5G will have an impact across the board—but financial services is one key area that will be able to reap the benefit of faster access.
