5G: A New Digital Era for Banking and Finance

Mobile technology has been marching ahead very rapidly since early 1980s when the 1G technology provided analog based voice for the human-to-human interaction. Then onwards, a new generation technology came into existence almost every 10 years, providing better features and functionalities. The said technology journey started from 1G and has now reached to 5G.

5G is intended to provide more traffic volume, support many more diverse devices and services requirements, offer better quality of experience for the users and better affordability by further reducing costs. It is based on technology viz: eMBB (Enhanced Mobile Broadband), mMTC (Massive Machine Type Communication), uRLLC (Ultra Reliable and Low Latency Communication). With data speed assumed to be 60*120*of 4G application, 5G will allow high resolution streaming, augmented reality/virtual reality, remote control of vehicles/robots/medicals procedure etc.

Banking and finance sector has shifted from the brick-and-mortar model to smartphones and latest technologies for reinventing the process altogether. Post Covid-19 impact, the finance sector has been shifting to cloud based operational model. Mobility has already been a game changer in the banking financials services. Banking is now expected to become omni channels with operations extending to newer channels including 5G smartphones, wearables, IoT services and virtuality reality. 5G is expected to force banks to relook at digital banking both for internal operations and customer engagements. 5G brings 10-100x faster speed than 4G and provides the capability to connect millions of devices per square kilometer with reduced energy usage and high availability. 5G utilizes a more intelligent architecture with radio access networks (RANs) no longer constrained by base station proximity or complex infrastructure.

Key use benefits of 5G in banking financials services include:

• Financials inclusion through the globally integrated financials supply chain.
• Enhances ATMs with more features like AR/VR to interact with banks officials directly.
• Virtual and augmented reality enabling richer customer experience at lower costs for banking financial services.

While drivers and use cases for 5G adoption are common worldwide, specific to India, banking financials sector needs 5G for applying Artificial Intelligence (AI) and for enabling Government of India’s social/financial inclusion agenda.

The advancement in Information Technology (IT) has resulted in explosive growth in banking technology like smart ATMs, extensive internet and mobile banking offerings which were traditionally offered by physical branches. With online and mobile banking, for many of the low assurance services, banking financial service have adopted technology go beyond the physical branches. They have engaged with fintech providers in transforming customer engagement. In this regard, 5G technology provides tools to aids such effort viz: financial inclusion, upgrading and migrating services, retaining as well as acquiring new ones.

Through 5G, banking will be conversational and location agnostic, where virtual pop-up branches will provide an authentic and innovative banking experience. Physical branches will undergo a digital facelift and remote engagement will become more humane by way of video based expert assistance at the customers convenience. Future branches are being reimagined with virtual reality (VR) and augmented reality (AR), powered by untethered 5G connectivity with high image quality to help visualize portfolios and business investments. Additionally, such high-quality video-based assistance will augment personalized financial services such as boundary less advice, sales and seamless onboarding.

Amulya Ratna is Assistant General Manager at Canara Bank, Mid Corporate Branch - Chennai. The views expressed here are personal.