“In the coming years, the emergence of 5G networks will transform credit unions by improving connectivity on different devices and allowing people to adopt new platforms tailored to their specific financial health needs.”
So opens a paper from the Financial Health Network, Credit Union Technology Watch: 5G Networks, developed in collaboration between the Network, MDC, and the National Credit Union Foundation as part of our collaboration focusing on how emerging technologies will impact the credit union industry. But how will this transformation take shape? We’ll summarize the report in today’s blog post.
What does 5G mean? Similarly to the 3G and 4G networks we’ve all used over the past decade (while avoiding the dreaded “Edge” at the top of our smart phone screens), the term refers to the fifth generation of wireless communications technology, allowing users of wirelessly connected devices to transmit or receive information at much greater speeds than currently available. 5G promises both much lower latency (meaning faster speeds at which any piece of data can be sent) and much higher bandwidth (the total amount of data that can be sent in a given timeframe). You can think of these metrics as how fast a car can go and how many people can sit in it. You can drive much faster in a sports car (low latency), but you can haul more people in a minivan (high bandwidth). The combination of both low latency and high bandwidth offered by 5G will mean consumers will have the best of both worlds, like a school bus tricked out for a drag race. With 5G, processes that need a highly responsive, ongoing connection (live streams, online games, video conferences, etc.) will experience less lag in their streams due to its low latency, and those that need to transmit larger amounts of data will take fractions of the time it takes to do so now due to its high bandwidth.
But what will this mean for credit unions? Here are some of the key takeaways from the report:
- 5G will enable financial institutions to become more efficient and flexible in how they engage members on digital platforms. In response, credit unions will need to improve digital capabilities, including member service and internal operations. This transformation will subsequently reduce the strain experienced at overwhelmed call centers, reduce operational expenses, and deepen member relationships.
- Cyber breaches may be the biggest threat to America’s banking industry as a whole, and the roll out of 5G networks will open another front in the ongoing battle against fraudsters. Credit unions must keep up by incorporating next-generation fraud prevention tools, such as biometric security measures and AI solutions.
- The lower latency 5G provides will make mobile apps smaller in size, allowing credit unions to enhance their features, compete with best-in-class banking apps, and become top-of-wallet for members. Additionally, credit union members will likely experience better overall mobile performance, including P2P and contactless payments.
Want to learn more? Read our full report on 5G by clicking here.
MDC owners can also access more information on how emerging technologies like 5G, augmented and virtual reality, quantum computing, and artificial intelligence will impact credit unions, including owner meeting presentations from industry leaders like Verizon, Lenovo, and Microsoft; additional research from the Financial Health Network; and more on MDC Connect.