Effective data sharing is crucial for the banking, financial services and insurance (BFSI) sector. The faster information can flow and the more accurate that information, the better insurers are able to calculate risk and help prevent claims. Equally, faster data sharing makes mobile and digital payments simpler, and improves fraud prevention. The advanced connectivity offered by 5G – enabling greater quantities of data to be transmitted more rapidly – will therefore be transformative for the sector.
So, how ready is the banking and insurance sector for 5G implementation? NTT DATA UK and research firm teknowlogy group interviewed business leaders from telcos and vertical industries such as banking and insurance to understand the current state of readiness for 5G implementation. The report reveals that the BFSI sector is one of the most mature industries in terms of its readiness for 5G and its benefits.
The opportunities available from the implementation of 5G in the banking and insurance sector are plentiful – and this is well understood by leaders in the industry. 87% of BFSI respondents to NTT DATA and teknowlogy’s survey are expecting 5G to transform the industry and an overwhelming majority (91%) believe the technology will open up new opportunities. Of all sectors surveyed, BFSI companies are the most optimistic about the impact of 5G on their businesses.
In terms of specific areas within the sector that will benefit, more than half of BFSI enterprises believe automation, AI, business applications, and networking and communications will be significantly impacted. Leaders in the sector expect back-office functions to see the most change, and more than half are expecting significant impact on business units. The BFSI sector is more likely than any other sector to bring sales and marketing executives into the decision-making process, indicating the potential 5G holds for transforming the sector’s offerings to its customers.
The use cases for 5G in the BFSI industry vary, but many benefits come down to increased connectivity and faster data transmission. NTT DATA UK and teknowlogy’s survey found that speed and throughput of data is the most highly valued capability for the BFSI sector. In insurance, this capability allows for more effective monitoring of risk and faster resolving of claims. Internet of Things (IoT) technology will benefit from greater connectivity, enabling faster sharing of greater quantities of data in real time. This means shipments can be tracked, cars can build immediate reports from an accident, and health data can be shared more effectively. With this real-time data, claims can be assessed more rapidly and accurately. For banking, security and fraud prevention stand to improve as the ability to verify transactions in real time is enhanced.
Given the nature of the opportunities available, it’s unsurprising that the BFSI sector is one of the most mature in terms of readiness for implementing 5G and taking advantage of its benefits. Just over half (52%) of businesses in the sector say they have a clear strategy for integrating the technology, and 35% are exploring the value it brings alongside other investments.
In terms of measuring success of implementation, 61% have revenue generation targets while just under half (45%) expect to implement KPIs to track service improvements. While revenue generation is a key target for many, the sector remains split on how much revenue can be generated from 5G. 60% anticipate revenue below 10%, but 9% are planning for over 20% revenue generation. Plans for revenue generation vary across the sector, but extending the customer base by expanding operations and digitising products is a key focus.
5G stands to transform the BFSI sector, from making digital payments faster to simplifying insurance claims processes. The sector’s optimism and its relatively high level of preparedness for rolling out the technology are promising. To ensure the benefits are maximised, the sector should draw on the expertise of partners such as NTT DATA UK to implement their strategies. With the right support, 5G strategies can be successfully delivered, bringing immense value to customers and ultimately improving the sector’s bottom line.