How will the Innovative 5G Affect Banking Branches?

The advantages of 5G, which include providing consumers with ultra-fast and low-latency broadband wirelessly and regardless of where they are, hold the potential to completely transform the ways in which we communicate with one another and with businesses. When it comes to connectivity and download speeds, consumers will finally have access to the same kinds of options that were previously reserved exclusively for businesses. This access will be instant and portable. This is going to have a transformative effect, and as a direct consequence, consumers are going to move more of their lives and interactions online, where the level of convenience is significantly higher.

Because of its potential, many people are wondering whether or not this technology will signal the end of traditional banking methods like brick-and-mortar banks. The number of branches across Australia has already begun to steadily decrease as a result of a combination of factors, going from 5,816 in the middle of 2017 to 5,173 in June 2020, and another 300 closures have already been announced for this year alone.

Therefore, the question that needs to be asked is this: will the decline of banking branches accelerate even further, given that banks are moving more services than ever before to digital platforms, and 5G Internet will deliver a higher standard of digital interactions while also driving a high level of social and cultural disruption?

The repercussions for traditional bank branches

The widespread availability of 5G will bring about a variety of unavoidable repercussions for the retail banking industry. These are the following:

1) The removal of services that are provided in person. If customers never interact with their bank via any medium other than digital ones, traditional banking locations will become obsolete. The need for in-person service and services will be greatly reduced, which will have an effect on one of the primary roles of the brick-and-mortar retail branch. Artificial intelligence chatbots will provide instant low-level support and answers, and tele-services will provide remote – but instant – face-to-face meetings with banking agents.

2) Automated teller machines (ATMs). It is no longer necessary to speak with a bank representative in order to open bank accounts, apply for loans, or discuss available financial options. Those days are long gone. Instantaneous account creation is possible through the use of web portals, and this is just the beginning of the self-service options that banks are working to implement over digital platforms.

3) The development of new applications for technology that result in an improved experience for the customer The rollout of 5G will enable the deployment of a variety of cutting-edge technologies. Imagine being able to apply for a home loan simply by pointing the phone’s camera at the house; a combination of location data and augmented reality interfaces enables the bank to immediately begin the application process. This is just one example of the types of experiences that will be available to banks in the future. They will also be able to provide VR and AR experiences and deliver deeper, AI-driven experiences.

4) The proliferation of pop-up retail locations. The way that banks interact with customers in person is becoming more mobile. Instead of simply installing ATMs at large events, festivals, or other temporary gatherings of people, 5G connectivity, which enables edge computing, enables the rapid deployment of branch experiences virtually anywhere. As a result, face-to-face interactions between customers and banks will be able to take on a more dynamic nature, and banks will no longer have to rely on clients visiting their conventional branch locations.

5) Trading with no commissions charged. It is possible to implement payment services on mobile devices, wearables, and other types of Internet of Things devices, which will allow for low-cost or even cost-free trading. Moving customers over to mobile payments will be seen as a significant cost efficiency measure in comparison to the costs of managing ATM networks and staffing retail branches.

6) Digital currencies. However, the next innovation that is currently driving wild demand is cryptocurrencies, which are digital-only money that does not have a physical “note” that can be withdrawn and spent. Although nearly one in five millennials no longer use cash at all, the demand for cryptocurrencies is currently driving wild. Since there is no need to exchange cash, financial services are investigating ways in which they can take part in a new type of transaction that is expanding rapidly and, as a result, circumvents many of the functions traditionally performed by branches.

Is there, then, a place for the more conventional offshoot?

The only industry that is currently being shaken up by 5G and digital technologies is the financial services industry. The majority of facets of retail are, and as a direct response to this, brick-and-mortar stores are increasingly transitioning their spaces to become focused on experiences rather than products. In an interview with Inside Retail, Chris Tourgelis, chief executive of Opus Design, said, “Yes, we are selling product, but a lot of people come to a retail store for pure entertainment purposes.” This statement was made in reference to the fact that while the company does sell products.

There are a few forward-thinking financial institutions that are attempting to innovate in a comparable manner with the branch experience. The China Construction Bank (CCB) has implemented 5G technologies in such a way that the goal is to provide customers with a more exciting experience within the branch, as well as to transform the branch into a major point of marketing and branding, thereby redefining the role of the branch as something other than a purely transactional location.

There is no shadow of a doubt that 5G is a ground-breaking and game-changing technology. However, this does not necessarily mean that traditional banking will become obsolete in the near future. It does mean, however, that the branch experience needs to evolve, and those banks that are unable to find a way to give customers a new branch experience will find themselves falling further and further behind. There is one thing that technology will never be able to fully replace, and that is face-to-face human interaction. Bank branches have such a large and prominent position in our community that they can be transformed into powerful branding and marketing opportunities. Moreover, there are times when you do want to interact with another human being in person. Because of this, there will still be a need for branches for quite some time into the future.

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Evangeline Christina is a Cyber Security Enthusiast, Security Blogger, Technical Editor, Certified Ethical Hacker, Author at Cyberspecial.net. Previously, he worked as a security news reporter in a reputed news agency.