Banking on 5G: Talking ATMs, touchless tech on the cards

Imagine walking into an ATM not just for withdrawing cash but also speaking with a virtual bank manager or even completing your KYC.

Working on turning this sci-fi scenario into reality is Hyderabad-based Institute for Development & Research in Banking Technology (IDRBT).

What is promising is that last week, leading telecom operator Bharti Airtel demonstrated live 5G services over a commercial network in the city wherein a 1GB file, which would take minutes to download on a 4G connection, was downloaded in less than 30 seconds.

“With 5G, ATMs will act as an extended bank branch…ATMs may also become relaying points for 5G networks,” said IDRBT ex-director AS Ramasastri under whose leadership this initiative took off. He retired in October, 2020.

When it comes to 2G, 3G or 4G, Ramasastri said, India has played up a catch-up game with other countries; but in the case of 5G, the government and RBI wanted the banking sector to be ready to leverage this technology sooner, which is why the country’s first 5G Use Case Lab for banking and financial services was set up at the institute in September 2020.

The lab, which has a team of 10 to 12 people, including researchers and bankers, is focusing on developing solutions for using 5G to boost financial inclusion and leverage AR/VR (Augmented Reality and Virtual Reality) technology. It is within a year that the lab expects to demonstrate some solutions in these areas.

Stating that 5G could boost financial inclusion, Ramasastri said, “In the rural areas, higher bandwidth availability will ensure that transactions are completed as soon as they are initiated…either customers will be able to do it or the staff will be carrying these 5G enabled gadgets … that’s the POC (proof of concept) that we have to work on…”

The new technology is expected to improve overall banking experience because of lower latency and higher speed. With 5G, minimum latency could be reduced to one millisecond as compared to 50 milliseconds for 4G and data speeds could be 10 to 20x faster than 4G.

Besides improving the financial reach of the banking sector, by improving the timings of transaction finality, 5G would also make banking activities more secure as irregularities can be detected on a real-time basis.

As per an IDRBT’s white paper on 5G technology, the 5G network can handle millions of IoT devices and enable machine-to-machine (M2M) communication. Along with higher data speeds, this would also make systems more ‘intelligent’.

Highlighting the potential of 5G technology, Akhilesh Tuteja, partner and head of digital consulting, KPMG India, pointed out 5G and use of IoT will see transformational changes to touchless banking that will impact ATMs, bank branches and POS.

“By 2025, most of the connected devices will need to be 5G compatible, including gadgets, wearable devices among others,” he said, adding that Covid-19 and demonetisation have seen exponential increase in the use of mobile banking, digital payments and remote implementation of key processes in the financial services sector including customer onboarding.