Shaping the future of banking with 5G

Wed 28 Apr 2021

Over the past decade, the financial services industry has been disrupted by the arrival of new players whose rise to prominence has pushed traditional banks – previously faced with little competition – to transform themselves. In this context, technology and innovation, particularly 5G, will allow the most skilful and agile banking organisations to take advantage of the game by offering their customers an augmented and personalised experience from start to finish. However, digital transformation remains a challenge for traditional banks, which are still dependent on their legacy systems. To remain competitive, they must manage to exploit the data they have at their disposal while rethinking their business models.

Strengthening client relations and user experience

Virtual advisors, more dynamic, intuitive and responsive conversational interface… While 5G will not immediately create new uses as such, nor innovative financial services in the strict sense, its computing power, speed and reliability will increase the possibilities of capturing the customer and optimising the provision of financial services. In concrete terms, banks, like customers, will benefit from 5G by multiplicating data that will increase transit through mobile communication channels whose development will be accelerated by 5G: chatbots, videoconferencing, internet of things (IoT) and more. Thus, the deployment of 5G will invite banks to imagine a plurality of complementary services to benefit customer relations, a priority issue. Indeed, while the financial services market has been disrupted by the advent of neobanks, FinTechs and GAFAM, 5G is an opportunity for traditional banks to create a differentiating value proposition. Especially since they currently have a gold mine: the data that their millions of customers and prospects have already agreed to share with them.

Coupled with a fine analysis of these data and the use of artificial intelligence algorithms, 5G will offer banks the possibility to provide their customers with an augmented experience: personalised and integrated. Personalised, on the one hand, thanks to the hyper-personalisation of services made possible by the immediate detection or even anticipation of customers’ needs, to whom a customised offer will be pushed at the most appropriate moment. Integrated, on the other hand, thanks to the improvement of interactions between banking organisations and their customers who, in 2021, demand more than ever the digitalisation of their procedures, expect a high level of responsiveness from their advisors and seem to increasingly demand alternatives to going to the branch: all reasons justifying, among others, the development of mobile chatbots. Although they can still be improved, given the low volume of information exchanged and the limited speed of the interactions recorded, 5G will certainly change the situation, making these innovations more efficient and convincing for the end-user. For their part, customer service representatives, lightened by their low added value tasks, will be able to focus on the more qualitative and human aspects of the relationship that no artificial intelligence can replace.

However, 5G will enhance the customer experience only if it is fully integrated from end to end, thanks to a mobile environment capable of addressing all banking services continuously, capturing the customer at the source and adopting a customer-centric approach. While mobile payment has marked the first step in this transformation, it is still in its infancy: with 5G, we could, for instance, imagine that by scanning an apartment with a smartphone, we would immediately receive a financing proposal to which we could subscribe online and that an advisor would contact us by videoconference to discuss it. Today, shaping such a mobile environment is a real challenge for traditional banking structures in the face of GAFAMs, whose experiential quality is part of their DNA. They already have the computing capacity to model such an experience, and 5G could well reshuffle the cards in this race for the most enriched customer experience.

Challenges to overcome, opportunities to explore

To take advantage of the benefits of 5G and deploy new, high value-added uses, traditional banks still face a number of challenges. First of all, they often have a major gap in common: while the bulk of data massification is still to come, the challenge for traditional players is to make the data they already have talk. Indeed, traditional banks are still in the process of deploying the technologies needed to fully exploit data, whether it be machine learning or, more generally, artificial intelligence, whose capacities will be multiplied by 5G, a technology that will enable the deployment of a largely decentralized computing structure. This is why it is imperative that banks first manage to use their current data and determine concrete objectives and use cases before resorting to any algorithmic logic. This first step is necessary and would form a solid basis for the arrival of a massive and enriched data flow.

Moreover, even before this phase of data exploitation, the mere collection of user data poses and will continue to pose questions: will prospects and customers agree to deliver more and more personal information? How far will they be willing to go? These questions seem all the more legitimate as the increase in cyber-attacks, which is in the news, will inevitably increase with 5G: indeed, by multiplying the points of contact (IoT, etc.), 5G will open more doors to cybercrime to the detriment of user confidence. To date, while transaction channels are perfectly secure with banks operating between them, tomorrow’s more open ecosystem will mean employing more robust means to transfer funds or deliver financial services in a completely secure manner. Clearly, the guarantee of a high level of reliability of information systems combined with more transparency around the use of data – beyond simple compliance with the RGPD – will be essential to gain and maintain user confidence over time.

Unquestionably, 5G is a high-potential innovation for players in the financial services sector. But the uses it will enable will require a major transformation for banks, particularly within their finance, risk and internal control departments. Finally, and because it is no longer possible, in 2021, to reinvent oneself in a vacuum in a moving, open and connected world, it is clear that the players who will manage to take full advantage of the opportunities offered by 5G will be those capable of opening up to the world around them to capture its wealth, by creating value-bearing ecosystems: for the benefit of their business and their customers.