Throughout 2019, we saw major cellular carriers like AT&T, Verizon, Sprint, and T-Mobile roll out 5G networks. 5G is now the fifth generation of wireless communication standards. A quick history lesson on how far we’ve come: first, there was 2G, a set of standards governing wireless telephone calls. The mobile web did not yet exist (hard to imagine at this point!) Then 3G hit the market, making it possible to browse the internet on a smartphone. Finally, 4G delivered speeds that enabled video streaming and an entire economy of apps that need continuous, reliable connectivity. So, what does 5G speed mean for banking?
Faster speeds mean better customer experiences. The market continues to demand high-quality Internet connection, and 5G promises ubiquitous and uninterrupted connectivity. Banks are notorious for being slow adopters, but this is one technological trend that can’t be ignored. Driven by consumer demand, banks will need to deliver superior customer services through the channels their users prefer or risk losing clients. As reported by RCWireless, “Many familiar banking operations such as payment services will attain new forms extending to newer channels including 5G smartphones, wearables, IoT devices, and virtual reality. The increased security and speed made possible by 5G will also revolutionize the capital markets, shortening settlement cycles considerably and removing latencies with real-time mobile trading capabilities.”
Over the next 3–5 years, it wouldn’t be surprising if we saw the following use cases:
- With 5G allowing for insanely fast processing, expect more cloud usage and a shift to the cloud with mobile banking.
- More uniformity between mobile phones and wearable tech. Bob Legters of FIS claimed that “consumers will experience a newfound uniformity between their phone, watch, wearable, and connected car—to the extent that they can rely entirely on digital payments.”
- This industry puts a lot of weight on personalization. Between advancements in AI and 5G, real-time information gathering will be faster than ever, which enables AI-based personalized banking services.
- Reduction in video lag time—consumers have turned to real-time video chats to consult their bank, financial advisor, and even doctor. Less lag time will result in more satisfactory experiences for consumers.
While the technology is still new and there are some caveats, expect major shifts thanks to 5G in the next five years. According to Cristiano Amon, President of Qualcomm, there will be 200 million 5G subscribers by the end of 2020, and that there will be 2.8 billion 5G connections by 2025. (That’s not just phones, but rather connected devices, too. Still, it illustrates just how rapid companies expect the 5G transition to be.)
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