5G Technology, A Gateway to The New Era of Financial Industry

5G technology has arrived in Indonesia and it can be a gateway to a new era for various industries, including the financial industry. 5G promises many improvements, ranging from internet speed, lower latency, bigger bandwidth, and the ability to handle connectivity to many devices at once. This can help various advanced technologies to be better implemented by industry players, thus improving the customer experience.  Unlike its predecessor (4G), the application of 5G is not limited to only mobile phones. The increased performance offered by 5G can also accelerate advanced technological innovations such as the Internet of Things (IoT), Augmented Reality (AR), Artificial Intelligence (AI), and Virtual Reality (VR) to develop. Accordingly, industry players will have more options to take a new approach in running their business in the digital era. .  For the financial industry, the adoption of 5G will impact its players to change their business models, thereby transforming the financial sector in various forms. Here is the summary. 

Transforming Banking Sector 

The financial services industry is inseparable from the well-established banking sector. Like 4G, the adoption of 5G will encourage the banking sector to change the paradigm of industry players in many ways. It is also significantly reforming the way they use technology, be it for internal operations or those involving direct customer service.  For example, it will shorten the waiting time for the new customer identity verification process, to checking the credit score of customers who want to apply for loans. It is possible thanks to the increase in network speed and the amount of accessed data. In addition, the implementation of AI technology also allows the improvement of customer complaints services performance to be better.  When banks upgrade their ATM and kiosk networks to 5G, the services provided to customers can also become faster, thus allowing their money to be accessed instantly. In addition, 5G can support the transformation of the banking business model from brick-and-mortar to digital. An example is facilitating teller services that is accessible from anywhere via a smartphone instead of visiting a branch office.

Transforming Payment Sector

With the adoption of 5G, mobile and digital payments are becoming more and more attractive for the public and ultimately increase their use. The quality of contactless payment services can improve and expand to a more sophisticated channels, such as wearable devices, IoT devices, and virtual reality – both AR and VR.  5G can also increase transaction security in terms of fraud prevention, and it also helps in decision-making based on accurate and real-time information. Low latency allows for faster data processing in verifying the nature of transactions, confirming transaction amounts, and monitoring the availability of funds. When combined with geolocation data and merchant ID, this technology can reduce the possibility of fraud to protect consumers.  The more equitable availability of 5G is expected to make cellular and internet penetration easier, since 4G and 3G networks are still more affordable for people in 3T (Terdepan, Terpencil, dan Tertinggal) regions. The existence of 5G support can encourage greater internet adoption. This allows for opportunities to empower consumers or merchants to become financial service agents who can facilitate online bill payments. 

Improving Customer Experience 

In the end, the benefit of every technological innovation that is born is for the convenience of customers. The adoption of 5G in the financial industry will be able to enhance their experience in accessing every available financial service in a more personalized manner.  For example, in addition to being used in customer complaint services, AI technology can also be used as a personal financial advisor that is accessible at any time. The use of big data supported by 5G also allows the financial services sector to personalize its services according to customer profiles.  Meanwhile, advanced technologies like AR and VR can also complement more immersive customers' digital experiences. For example, help customers understand their banking transactions through visualizing financial reports, simulating various financial scenarios, providing interactive video features to explain a service, and conducting VR-based digital transactions. 

Building Indonesia's Digital Ecosystem Is a Joint Effort 

Undeniably, 5G technology is a leap forward in technology. However, 5G also provides industry players with homework to change their mindset and synergize to ensure customers get the best experience. In addition, there is still the issue of data leakage lurking in Indonesia's digital ecosystem.  Therefore, financial industry players need to implement a new entrepreneurial mindset to overcome the challenges that exist. Collaboration between 5G providers, banking, fintech, and payment system providers in creating new business platforms is expected to provide customers with a better transaction experience.  With proper implementation, 5G will remove many of the barriers that still existed in financial services, improve back-end and front-end operations, and create new collaboration opportunities. Meanwhile, on the customer side, the increase of mobility and lifestyle in the community can be supported by more dynamic and optimal solutions.    Ref: https://www.5gradar.com/features/ways-5g-can-boost-finance https://www.globalbankingandfinance.com/5g-enabling-a-new-era-of-opportunities-for-financial-services/ https://www.business.att.com/learn/tech-advice/how-5g-will-enhance-the-finance-industry.html https://www.computerweekly.com/opinion/How-5G-is-going-to-transform-digital-banking-in-2021