5G Banking Design: Myths, Gaps and Insights

In our previous blog, we envisioned a bright future of 5G smart banks, but there is still a long way to go on the path to 5G transformation. The issues are not necessarily technical ones, but gaps in experience design. Some banks resort to renovation with new equipment without really identifying true pain points or the changing needs of customers. In the next big transformation, some banks will fare well with greater growth, while others may only get a lukewarm response from customers.

Is a technology upgrade the only task required in 5G banking transformation?

To make the leap into the 5G era, banks will purchase technology and equipment from fintech companies to upgrade their infrastructure. However, the gap is usually the tendency to over-focus on technology improvements and not enough attention on people-oriented design. The secret of success of financial service, as in any service industry, always lies in how customers feel about the utility gained from the service. To this end, banks’ expertise in understanding customers is exactly where they beat their fintech challengers. The right way to think is to find solutions for unrealized needs by designing for a better experience, rather than jumping onto the bandwagon of a new tech trend.

What are the gaps for technology companies?

Leading companies in the tech and fintech industry might have top-notch 5G technology and cloud computing, but these game-changers could also be a blessing and a curse in that they see everything through the lens of technology (because their goal is to commercialize it). Fintech does not automatically translate into revenue growth, and customers might even complain more about new technologies with poorly integrated experience design. At present, even the top tech companies have not yet found the best practices for 5G banking, which lacks use scenarios and use cases

What is SLD’s recommendation for banks’ 5G transformation?

We believe the key to a successful 5G transformation is whether banks recalibrate customers’ needs in the new era, and match those new needs with clever design. 5G will push banks to rethink their overall branch design, leveraging greater use of digital screens, digital signage, and other interactive technologies that should all be seamlessly integrated with smart phones. For example, personalized offers and communication will become a reality with higher transmission speed to cloud computing.

Similarly, branch design should guard against this “tech-centralism” and instead aim to win by reevaluating customers’ changing priorities. Take financial advisory business as an example. Advisory business does not account for a large portion of profit for retail banks right now, because a) it is difficult for customers to make a flexible appointment with highly skilled, “best” advisors, and b) it is expensive for banks to keep as many advisors as needed. A good 5G banking design should transform brick-and-mortar offices into virtual meeting rooms where a greater variety of specialists could be easily scheduled to talk to customers “face to face.”

Manage expectations in early days of a new technology roll-out

Finally, it’s important to remember that any new technology will have reliability issues in its early roll-out. Customers can easily become used to a high-speed, all-day service pattern, so their expectations for all bank service levels will likely rise. Consistently meeting such expectations could be very challenging, especially during scheduled or unscheduled downtimes. In operation management, a company can at best ensure two aspects of the “impossible triangle” of service variety, quick response and system reliability. That is why an incremental roll-out plan is preferred over an overhaul.