As banking facilities expand and the exponential growth of technology continues, edge computing provides the banking sector with the capability of addressing and managing distributed segments. It offers institutions a significant gain in terms of latency while reducing the costs associated with sending information to the closest nodes for processing needs. That shift achieves faster speeds because the structure moves the computing power away from centralized networks that can sometimes process massive traffic.
The total count of Internet of Things devices is expanding rapidly. There were 7 billion connected to the web in 2018, but that number skyrocketed to 26.66 billion in 2019. Security Today reports that 127 new connections happen every second. That means the banking sector must target mobility as a strategic priority right now. With 5G capabilities coming online, the push toward using edge computing has never been more significant than it is right for the banking industry.
Edge computing is the only way to mitigate the challenges that this increase in data creates. Although it seems like a frightening proposition at first for the industry, transitioning to this technology is an organic process that many institutions are already undertaking.
The Banking Sector Has a Long History with Edge Computing
Although this technology has not always been referred to as edge computing, the banking sector has had a long history of using this approach to manage data. The stand-up branches, ATMs, and earliest mobile apps all incorporated elements of it to process information. Reducing the expenses associated with site maintenance will become the crucial factor that drives more holistic solutions for the future of the industry. Managing a global fleet of IoT devices is a much different scenario than a local branch of automated teller machines.
Consumers have needed access to remote banking systems since the 1990s when the Internet first became available to the average household. It started a race to incorporate better infrastructure to support new ideas while adapting to the ever-changing needs of the customer. Instead of going to a local branch to check balances or pay a bill, institutions have made created online alternatives for those who bring their own device to the banking process.
According to Deltec Bank, Bahamas – “Edge computing gives the banking sector an ability to process vast amounts of information from outside data centers while reducing latency and improving consumer-facing solutions. It enables a customer to access the entire banking system remotely, including loan applications, creditworthiness determinations, and even fraud detection.”
Edge Computing Brings the Banking Sector Closer to Customers
Automation through artificial intelligence and machine learning help the banking sector operate more efficiently. These technologies handle the routine queries that customers have regarding their account status, and some institutions even use them to evaluate applications for products or services.
Edge computing gives the banking sector access to even more tools that the IoT supports. It enables the industry to use robotics and computer vision to provide positive and direct impacts to the end-user. That approach works to enhance the existing experiences of the consumer, such as in-bank offerings, while it also helps individuals to see options that they may not have yet considered. This advantage is particularly beneficial for investments because it can rapidly process advanced analytics to provide better predictions of market behaviors.
When the banking sector focuses on the data generated by IoT devices, it can unlock proactive opportunities to provide a complete range of services with a customized approach to each customer. As each institution transforms its business model to incorporate edge computing as an essential component of its infrastructure, an increased need to adopt distributed data models will develop.
Edge Computing Provides Three Disruptive Opportunities
Speed is the primary advantage that edge computing provides since the information has less relevance when it requires more time to process it. Milliseconds matter in the banking sector because it is such an ultra-competitive space for consumer funds. Edge computing also provides the industry with three disruption opportunities that can help to create new touchpoints that can expand revenues at individual institutions.
1. Greater Individual Intelligence
Edge computing allows individual institutions to improve consumer experiences by tailoring every interaction to a specific goal. It can rapidly analyze previous behaviors and decisions by giving power to artificial intelligence installations, promoting simultaneous customization for every customer who requires services at any given time. This advantage allows banks to anticipate the needs of individuals and families instead of reacting to questions or concerns.
2. Backhaul Avoidance
This portion of the telecommunications network for the banking sector involves the intermediate links that exist between the backbone network and the smaller subnetworks that exist at the edge. It’s the obligation to carry packets to and from the primary spine of the setup. Although modern technology allows data to process at impressive speeds, the banks that can avoid the need to move outside of the edge can operate with less latency more consistently. Spectrum deficits have been an issue since 2012, which means the agencies that haven’t considered this approach are already in a disadvantageous position.
3. CI/CD into Multi-Tenant Environments
Continuous integration and continuous delivery allow developers in the banking sector to integrate their coding to promote faster integration of new systems. It also encourages a set of best practices that speed up the lifecycle of industry-related products, allowing consumers to have access to innovative ideas more often. Edge computing provides enough bandwidth to automate these processes to encourage more productivity and responsiveness, creating a platform that improves product quality exponentially.
Then there is the idea of scalability that edge computing provides. Although this concept seems to be at odds with the advantage of latency reduction, IoT devices can get deployed along with their data management tools at the edge of individual implantation instead of waiting on the coordinated efforts of others. It provides instantaneous capabilities to detect, analyze, and make profitable decisions for banks of all sizes.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.