5G to Greatly Impact the Financial Services Industry

The fifth-generation wireless communication standard, 5G, could not have been ready at a better time, particularly with how critical remote financial services are now and will continue to be.

5G is much more than a better mobile network – it will significantly improve and expand the application of transformative technologies like artificial intelligence, the Internet of Things (IoT), machine-to-machine communication, autonomous vehicles, smart cities and more. These technologies require blazing speeds to reach their full potential, something that previous wireless options had yet to deliver.

Credit unions need not split hairs trying to understand the fundamental difference in 5G, just that it reaches a new level of using extremely high frequencies to embrace the growing number of devices that demand internet access. This means there is stronger bandwidth support to minimize delays and achieve ultrafast speeds – at least 10 times faster than 4G, in fact.

5G will eliminate the buffering and delays that ruin the digital multimedia experience. Latency will shrink to as slow as one millisecond, making video communication almost seamless. The performance of chatbots and voice assistants will improve by boosting the speed of the AI operating behind the scene. Chatbots will respond faster and have more human-like conversations without awkward pauses to find information.

Specific to banking, credit unions can look forward to 5G having several notable impacts, including:

• Member service: Remote credit union personnel can personally serve members via video sessions initiated on smartphones or video-enabled ATMs and kiosks.
• Digital UX: A richer digital banking experience is made possible through virtual reality-based member service, financial advice and wealth management support.
• Authentication: Increased use of multimodal biometric security will help substantially reduce the risk of false negatives during authentication. Using real-time 5G connectivity to aggregate biometric data from a user’s different devices, credit unions can provide multi-layered authentication for extra account protection.
• Financial insights: Low latency bandwidth offers real-time information gathering and delivery of data ranging from location to payment information, paving the way for new AI-based personal banking services. These services could aggregate a user’s behavioral data in real time to create context-aware financial recommendations and offer more accurate advice when and where it matters most.
• Digital payments: Consumers will experience uniformity between their phone, watch, wearables and connected car to the extent that they can rely entirely on digital payments. The ease of use combined with increased transaction speed and personalized offers will enhance the mobile payments experience.
• Fraud prevention: Proactive fraud prevention is enhanced since more data can travel across networks in real time. For example, when a member initiates a mobile payment, the credit union can quickly analyze data like geolocation, transaction amount and merchant ID to reduce fraud detection errors (like false positives that decline transactions and annoy members).
• Lending: Digital applications, credit checks, personalized financing offers, approvals and funds availability can all speed up in one seamless, end-to-end experience. Credit unions can leverage 5G and AI tools to run parallel processes in real time, improving the speed and accuracy of their lending decisions. For complex lending scenarios, 5G’s high-resolution streaming capabilities give real-time access to video consultations with financial representatives – both virtual and human – who can help members make informed financing decisions.
• Wearables: Wearable devices typically rely on local authentication using biometric data to enroll fingerprints and then check them against a new scan each time the user accesses the device. Biometrics are advancing from fingerprints to faces, voice recognition and behavioral analysis. By connecting to the cloud using 5G, these devices could share that data with credit unions and with each other, with higher accuracy and lower latency.

The 5G landscape is still forming, but most wireless networks should offer nationwide coverage and more 5G phone selection by the year’s end – with full 5G deployment likely by 2025. It will exponentially improve the networks of every enterprise in every industry, bolstering employee productivity and allowing organizations to take greater advantage of technologies that enable more complex data analytics to improve service, increase operational efficiency and reduce costs. Credit unions should start planning now for how 5G can be leveraged to better serve their members and grow their business.

The future of financial services is mobile, and today’s modern consumers expect their primary financial institution to support the evolving technologies in their pockets and on their wrists. As 5G enhancements create more reliable, responsive networks, they can help credit unions ensure that this future is more productive, personal and protected. 5G will enable credit unions to be more agile and creative than ever, delivering new, innovative experiences that matter.

Credit unions should monitor the progress of 5G’s rollout nationwide and leverage this updated infrastructure to improve the member experience. The low latency, high data capacity and reliability of 5G networks will help create a new platform for the delivery of services – virtually wherever the member (or credit union employee) might be.

Nicole Harper, Sr. Strategic Initiatives Analyst Jack Henry & Associates, Monett, Mo.