Financial institutions are constantly on the hunt for an edge when it comes to mobile banking and other innovations, and that’s playing out with new, emerging 5G mobile network technology. One of the most recent developments comes from Spain-based bank Santander.
According to a press release published on Friday, June 14, the bank “has kicked off an experiment with Telefonica to explore potential use cases for superfast 5G networks in banking.”
More specifically, the 5G effort, taking place at two Santander branches near Madrid, “will showcase the potential of 5G in branch-to-branch video conferencing, low latency cloud storage and virtual reality. While customers will be able to experience the 5G banking experience firsthand … Santander has agreed to work with Telefonica on more wide-ranging projects, such as the introduction of fully equipped mobile offices at big events or for emergencies.”
The new 5G mobile network technology is still in its infancy, but a variety of players in digital commerce and payments are starting to experiment with 5G use case. For financial institutions, the ongoing emergence of the 5G world comes as many of them try to gain an edge in the increasingly mobile world of banking and financial services – a world where FinTech and innovation in general promise to take on more vital roles as PSD2, open banking and other initiatives kick in.
Efforts such as the Santander 5G program promise to add another tool that can aid such efforts. As that mobile technology gets closer to mainstream introduction, the potential 5G ecosystem for FinTech and mobile banking is gaining clarity. Banks and credit unions are still wrestling with the best ways to deploy mobile technology, in ways that balance security, safe authentication and consumer convenience. Machine learning and artificial intelligence are among the emerging technologies capable of boosting banking operations, including customer service and preventing fraud, as recent PYMNTS research has demonstrated.
5G offers the possibility of new technology that can help FinTech and financial institutions – technology that can be thrown into the existing mix to fuel ongoing digital efforts. “For mobile banking to become ubiquitous, the development of 5G technology is paramount,” reads one analysis of the biggest FinTech and banking trends for 2019. “5G tech reduces latency and transaction times, which is key to ensuring the network can handle the amount of transactions at scale.”
When it comes to FinTech specifically, instead of banks and credit unions, perhaps the main appeal of 5G at this point is not speed, but “ultra-low latency,” argued another recent analysis. “Defined as the time it takes for a device to send a command to a remote server and get a reply, latency looks set to reduce from 50 milliseconds on a 4G phone to under one millisecond in the 5G era. So at the very least, 5G will bring a lightning-fast, real-time user experience to mobile devices, so much so that consumers will experience banking and payment transactions instantly on their devices. 5G will mean zero waiting time.”
That low latency can go a long way, even though its benefits are just being understand. In the case of Santander, according to the report, “the technology will allow relying on a low-latency cloud to deploy critical services in offices without the need to change existing equipment, or having a global 5G backup system that preserves the same features and services that are available with the fixed network.”
5G is rising as financial institutions are focusing more on the (relatively inexpensive) cloud computing, which also increases what banks and credit unions – and FinTech, either on their own or in partnerships – can do with digital technology and product offerings. “Still, we can’t assume that everyone has access to high-speed internet to take advantage of cloud computing,” reads a report on that topic. “For many businesses and customers, 5G is the missing link.”
Santander and other bank efforts centered around 5G will, in the coming months, help further guide the way for future deployments, and help clarify the outlines of this new 5G ecosystem for financial services.