Why are Financial Institutions Moving towards Edge Computing?

With the exponential growth of technology and the expansion of banking facilities, edge computing offers a means to address and manage the distributed banking segments.

FREMONT, CA: Banks and financial institutions are continually upgrading their systems and implementing emerging digital technologies to serve their customers better. Several innovations, such as mobile banking, personalized kiosks, and digital signage, have already proved the potential of innovation in the banking sector. However, with changing market needs and expectations, financial sectors need to model their structure around distributed systems. Technological advancements should also focus on empowering the distributed channels instead of adding on to the capabilities of centralized systems.   

Technologies have a major role in all the advancements in the banking sector. Technologies such as artificial intelligence (AI) and API are improving banking services with the aim of enhancing the customer experience. However, the incorporation of technology also requires high processing speeds to generate real-time results. Edge Computing is a promising innovation that aims to address the above issue. Edge computing processes data closer to where it is created.

For banking institutions, edge computing means a significant gain in terms of latency and costs associated with sending the data to the central nodes for processing. Security is another aspect which is of prime importance in the banking sector. As edge computing enables data processing near to the source of where the data is created, it eliminates the need to transfer the data sets to the public cloud. Thus, the data sets are protected against the security risks involved with the transfer channels. Edge computing requires computing data in real-time, which is crucial for responsive data-driven decisions in the banking sector.

With technology and innovations disrupting traditional banking procedures, the incorporation of advanced devices and technology is imperative. The ease of scaling operations with the addition of new devices for the banking processes is another major benefit of edge computing. For instance, financial institutions are installing new systems and empowering their staffs with devices to assist the customers in a personalized way. According to a Gartner study, almost 75 percent of the enterprise-generated data will emerge and get processed outside the conventional data center or cloud. Banking institutions are increasingly moving towards Edge computing owing to the increase in the internet of things (IoT) devices and to meet the growing needs for technological enhancements. Howeve

r, edge computing will not eliminate the requirement of the centralized, more powerful processing nodes. Centralized nodes will still be needed, but there will be a significant reduction of loads on them.

Edge analytics applied to the data from the devices can offer a deep understanding of the customers’ expectations and needs. The exponential growth in the number of IoT devices further offers immense potential to the banking sector. Customer insights gained from IoT devices, such as via mobile apps, can be used to offer plans that suit the financial needs of the customers.

Edge computing promotes the use of applications such as computer vision, robotics, and ML that can not only enhance user experience but also allow the financial institutions to streamline their processes. The effectiveness and efficiency of ATMs, bank branches, and banking apps have benefitted greatly from edge computing. As a result, banks are increasingly trying to enhance the strengths of their peripheral services and equipping them with an increased processing capability.

Financial institutions realize that edge computing is one the most effective ways to ensure that the data reaches where it belongs in a faster and more reliable manner. With 5G technology set to transform the world, edge computing will play a major role in scaling the devices with emerging technology. While edge computing may seem a challenging proposition at present, further technological advancements will make it a natural fit for the banking institutions. 

See Also: Financial Tech Review