Shanghai Pudong Development Bank has studied and innovatively applied technologies such as 5G, Internet of Things (IoT), and Artificial Intelligence (AI) since 2018. We were the first bank to release the 5G-Powered Banking White Paper and 5G+ smart branches. Here are some of our thoughts and practices for 5G application in finance.
When 4G first emerged, we only knew that it made network access faster, but did not foresee that it would completely change our entertainment, social networking, and shopping models. Mobile payments, online shopping, live streaming, and online car-hailing are now vital parts of our life. Our main service channels have shifted from physical branches and e-banking, to mobile banking.
As the key to modern mobile communications technologies, 5G was officially put into commercial use in China in 2019. Together with Artificial Intelligence (AI), Internet of Things (IoT), cloud, and big data, 5G is leading us into an intelligently connected era which integrates the digital and physical worlds.
What will the "intelligent connectivity of everything" bring?
To start with, ubiquitous connections stimulate huge network effects.
5G will effectively drive IoT development, unlock real scenarios where digital connections used to be difficult, and remove digital silos. Machines on an assembly line, port containers, and visitors to a playground can now be connected. According to the Huawei Global Industry Vision (GIV), by 2025, ubiquitous connections in the personal domain and sectors such as public utilities, manufacturing, healthcare, and agriculture will reach 100 billion. That will be the time to say goodbye to "offline."
The value of the Internet comes from increasing the amount of things on it. As we connect more people, things, and data through 5G, the power of the Internet grows exponentially (following Metcalfe's Law). Ubiquitous connections bring huge network effects and unprecedented economic development opportunities.
Secondly, technology convergence makes society intelligent.
5G development involves more than one technology or network. It is more like a catalyst to accelerate the integration and innovation of information technologies and vertical sectors. For example, in a Smart City, IoT sensors on devices act as neurons to collect large amounts of diverse data in real-time. 5G accelerates data flows and continuously feeds the city "brain." It also converts data flows into intelligence flows, guiding social operations. In addition, 5G activates Ultra-High Definition (UHD) video, Augmented Reality (AR), and Virtual Reality (VR), and it removes the transmission bottleneck of the Industrial Internet and boosts Internet of Vehicles (IoV) development.
The integration of 5G and next generation information technologies is not a simple added feature. In fact, it produces a multiplier effect to accelerate the digital and intelligent upgrade of various sectors and achieve efficient collaboration between people and things, between things and things, and between the digital and physical worlds.
Third, industrial innovation boosts economic development.
Intelligent connectivity is an accelerator for digital society. The technical transformation led by 5G will accelerate the innovation and development of various sectors. Aside from the smart home and Smart City, more models will emerge — such as smart grid, telemedicine, smart ports, and smart tourism — thanks to 5G's wide coverage, low latency, and customization features. The pandemic has promoted online consumption as people's habits have been forcibly switched from offline to online. Online office, education, and contract signing services demonstrate the huge value of the digital world in an extreme situation. Driven by these factors, industry upgrades and the industrial Internet will become new focuses in the next phase of development, promoting economic development.
In the intelligently connected era led by 5G, social governance, economic development, and public services are undergoing transformation. Resources, processes, and models in the physical world are reconstructed using the digital world's logic, called "bits guide atoms." Our banking industry should also get rid of the constraints of a traditional mindset and rethink new financial service models in the future.
Shanghai Pudong Development Bank has deployed 5G, IoT, AI, cloud computing, and other technologies since 2018. Adhering to "customer-centricity," we use 5G and other technologies to continuously innovate the customer experience, business models, and open ecosystems, expanding the breadth, depth, and width of financial services.
Improve the Customer Service Experience
Customers are always at the core of enterprise operations. Banks should focus on customers, innovate financial services, and improve the user experience. 5G provides us with a new solution to do just that.
Begin by extending services without boundaries. Banking services will be available not only in banks, but everywhere. Ubiquitously connected 5G networks can efficiently extend services to the site of customer operations and into real life scenarios, providing high-quality audio and video interaction services plus an AR and Mixed Reality (MR) immersive experience.
Next, make services more inclusive. Our bank has developed an AI-powered virtual employee, Xiaopu. She represents a next generation service model based on a Humanized User Interface (HUI) and a service connector between the physical and digital worlds. After training, Xiaopu can provide online risk assessment, financial consulting, investment advice, and news broadcast services. In the 5G network environment, she can work on various devices, including mobile phones, smart watches, and cars, making high-quality, personalized, and intelligent services more convenient and inclusive.
Third, make services more targeted. The intelligently connected space can detect customer requirements in real-time and respond intelligently. Based on the positioning and feedback information of customers' wearable devices, we provide suitable suggestions on wealth management, investment, and retail consumption. For example, the system seamlessly identifies a customer in a branch and works with the intelligent background engine to send the customer's potential requirements and service preferences to the tablets of bank service personnel, who then provide customized services. We hope to deliver an ultimate service experience, remove communication barriers, and perfectly meet customer requirements.
Innovate Business Management Modes
"Intelligent connectivity of everything" helps banks evolve their business models to meet social requirements. In terms of optimizing operations management models, 5G helps branches implement remote control and flexible deployment of branches. VR and audio and video recording enable online and cloud-based customer service scenarios such as personal loan and wealth management consulting.
For strengthening risk control models, 5G helps match business flows, logistics, information flows, and capital flows, and draw risk profiles of business entities such as customers, businesses, and goods, facilitating bank risk control. Last year, we worked with Huawei to develop a 4S — self-planning, self-installation, self-commissioning, and self-maintenance — shop vehicle monitoring platform, which remotely monitors listed vehicles and manages the entire handover process online. The platform can automatically count vehicles in 4S shops and verify consistency between the actual number of vehicles in stock and the number recorded in the ledger. Meanwhile, our platform can detect business exceptions and report alarms based on pledge enterprises' operations data. The solution overcomes multiple issues of traditional monitoring, such as geographical dispersion, information asymmetry, poor risk control, and high service costs.
Build a Cross-Industry Ecosystem
At present, society is advancing supply-side structural reform and promoting the integration of the real economy and the digital economy. Against this backdrop, banks should become enablers to unleash the economic potential of the whole of society. 5G opens a new field for the banking industry — namely, cross-industry innovation for vertical sectors. Our bank will seize the industry digitization opportunity, embed business operations into real economic scenarios through FinTech innovation, and deeply integrate with the industry chain to build a new industry ecosystem.
First, we should focus on traditional industries and serve the real economy. The intelligent connectivity of everything accelerates the digitization of traditional manufacturing enterprises. Data will become the core asset of the industrial Internet. Based on the production and operations data collected from enterprises, as well as from industry and commerce sectors, combined with taxation data, banks can establish digital twins for enterprises and build a digital credit system and evaluation model to comprehensively, scientifically, and dynamically evaluate enterprise asset quality, data assets, and insurance credit rating. In addition, according to the financial status of enterprises, we offer financial analysis, market trend analysis, and supply-demand matching services. By integrating into the enterprise operations value chains, we can precisely serve and enable Small- and Medium-sized Enterprises (SMEs) and support the development of the real economy.
Next, we should innovate financial services using emerging technologies. Thanks to the development of 5G, Smart Cities, super farms, and autonomous driving have emerged. These new fields contain new financial service scenarios and requirements. For example, in the Vehicle to Everything (V2X) scenario, we can provide electronic wallets for vehicles and build an intelligent vehicle identity authentication system to support secure transaction links and seamless payment. This function can be used in electric vehicle charging and payment. Furthermore, based on smart home services, we can build a "home" big data analytics model for customers to recognize their financial service requirements in advance and then offer dedicated financial services.
Building Digital Competitiveness through Technology
When considering the new opportunities of ICT intergenerational upgrade, we notice that the challenges brought by new technologies, business types, and models cannot be underestimated. Banks must embrace technology to build digital competitiveness.
At the beginning of this year, our bank established a three-year action plan, aiming to build a world-class joint-stock commercial bank with international competitiveness, and promote the whole bank to become a pacesetter and frontrunner of high-quality development in the financial industry, in a new era. We hope to strengthen open banking, promote full-stack digitization, and create new development drivers by focusing on customer experience and digital technology. From a strategic perspective, we will promote data operations, technology upgrade, and cross-industry collaboration.
To do all this, initially we need to build a data mindset and fully leverage data value.
5G will accelerate the online, digital, and intelligent transformation of social production and life, which will lead to explosive growth of various kinds of data. Data has huge value and is key to efficient collaboration and high-quality social development.
Banks should establish a data mindset. That means a shift from the traditional way of providing services and selling products to a data- and algorithm-driven operations mindset and model. The first step is to lay a solid data foundation. We can establish a forward-looking data plan, efficiently integrate internal and external data, and strengthen data governance. The next step is to fully unleash the value of data. We will become aware of customers' production and life scenarios using technical means such as IoT, AI, and blockchain, allowing us to quickly detect and respond to customer requirements, track the entire supply chain process, and proactively predict risks. Data and intelligence are used to enable and improve customer services, marketing, risk control, and operations, and even innovate operations management models to build a data-driven bank.
Second, we need to develop technology to drive innovation.
During innovation and development, Shanghai Pudong Development Bank insists on developing technological capabilities and uses technologies to enable customer services, marketing, operations management, and risk compliance, while extending the scope of digital services and innovating models. "Technology is the only force that disrupts the traditional business model of banks."
Keeping up with technology development, we have defined ten key technologies. We focus on researching 5G, AI, IoT, and blockchain technologies, and consolidate cloud, big data, and distributed computing platforms to provide a powerful digital foundation. In addition, we have constructed a network security defense system featuring real-time threat awareness, dynamic defense, and multi-level protection to cope with the deteriorated Internet security situation.
We are continuously exploring innovative models and building a multi-layer innovation ecosystem. Internally, we have removed departmental silos and set up a cross-department innovation team that integrates business with technology. Externally, we have built nine joint innovation labs with leading technology companies such as Huawei, Baidu, and IBM. By matching technical innovation with financial scenarios, we want to build an accelerator for the igital transformation of the entire bank.
Finally, we must strengthen industry integration to serve the real economy.
One of the most important differences between 4G and 5G is that 5G extends its coverage from individuals to sectors. In the late stage of 5G commercial use, the focus will be on vertical sectors such as industry, healthcare, transportation, and electric power, to accelerate digital industrialization and industry digitization. The industrial Internet will become the focus of Internet development in the next stage.
"Economy is the body and finance is the blood." We should speed up the integration of finance and other sectors. We can dive deep into enterprise production and operations, grasp customer pain points and requirements, develop integrated service capabilities of "corporate + retail + technology" to enable customers, and offer "finance + non-finance" solutions. For example, during the pandemic, we provided financing and payroll services for Xibei district. More importantly, we offered online sales services by leveraging channels and the customer base of our non-banking service platform. In the future, we will accelerate the construction of open banking service platforms for enterprises, individuals, and governments, integrate into the industrial Internet, and build a new ecosystem.
5G is ushering in an intelligently connected era.
Facing transformation led by technology, Shanghai Pudong Development Bank will strengthen cross-industry cooperation and innovation, create infinite possibilities with connections, inspire infinite momentum with intelligence, serve the industry ecology with FinTech, and jointly promote high-quality social and economic development to embrace a better future.