Edge computing – providing a cutting edge customer experience in banking

In this age of data-driven banking that puts significant pressure on banks’ IT infrastructure to provide real-time analytics after meticulously examining large volumes of data created every hour, edge computing has emerged a lifesaver, enabling banks to realize their goal of enhancing the customer experience.

Edge computing – An introduction

Edge computing helps banks bring analytics closer to data rather than shifting data to a centralized data centre to conduct analytics. In traditional models, all data collected by banks and financial institutions is routed back to a centralized data centre for processing. This leads to latency and potential delays in customer servicing/providing contextual and real-time offerings. Around 10% of enterprise-generated data is created and processed outside a traditional centralized data centre or cloud, according to global research and advisory firm Gartner. It forecasts that this figure will reach 75% by 2025. International Data Corporation estimates that by 2022, over 40% of organizations’ cloud deployments will include edge computing.

Edge computing enables faster data processing locally, either on a device or on a local server, as opposed to transmitting to a centralized data center. This allows smart devices or banking applications to process data instantaneously, as and when they are created, eliminating any lag and enabling faster decision-making.

Edge computing also helps reduce the load on a network by processing data locally and transmitting only relevant information to a data center once a day for record-keeping. It is a cost-effective method and adds a layer of security, as the locally processed data does not need to be transmitted over a network for processing.

Use cases in banking and financial services

Banks have started experimenting with edge computing, coupled with 5G technology. Edge computing is helping banks bring analytics closer to customers. We list some use cases in banks and financial institutions below:

• Personalized customer offerings: As part of their cross-selling strategy, banks offer customers generic products as soon as they walk into a branch. The products may not be relevant, and chances of conversion may be few. However, using near-field communication (NFC) technology and data based on interactions with a customer and applying real-time analytics through edge computing, the bank can provide personalized offerings.
• Insights for insurance providers: Insurance companies are monitoring car condition and driving statistics to arrive at the insurance premium. With a device fitted in the car, insurance provider can monitor real-time data on a regular basis to arrive at suitable insurance premium or any road side assistance
• Fraud detection: Online banking accounts for most banking frauds. These frauds may occur at the transaction level or be deemed to be suspicious activity, based on payment frequency or profile changes. Real-time fraud detection is critical in terms of online transactions, for the purpose of taking timely action. Applications supporting this requires low latency and scalability. Using edge computing, banks can put in place a real-time fraud detection mechanism through real-time advanced analytics for each transaction.
• Real-time information for trading firms and hedge funds: In the case of trading firms and hedge funds, a lag of even a millisecond in providing an update on a particular stock or hedge fund information may have a substantial impact on business. Banks can use edge computing to set up infrastructure near stock exchanges in order to process data in real time and run complex algorithms.
  

  Banks’ adoption of edge computing

  Banks have already started working on use cases with a focus on adopting edge computing because of its benefits such as enabling faster decision-making, reducing costs, and providing speed, low latency, security and scalability. The Commonwealth Bank of Australia is exploring the adoption of edge computing to improve its customer experience. It believes it can improve the digital experience of its customers by using edge computing and 5G technology to optimize its network infrastructure. It will be interesting to see the wider adoption of edge computing by banks and financial institutions. NG COULD

  Banks today know that if they want to win on customer experience, they have to leverage powerful digital technologies to strengthen their overall customer experience to meet and even exceed customers’ increasing demands and expectations. Technologies like application programming interface (API), blockchain, and artificial intelligence (AI) are changing the industry and unlocking the potential for tailored customer experiences, hyper-personalization and supporting new business models.

But there’s a catch. Putting many of these technologies to use in real-time requires processing large amounts of data. The quantity of data involved means using a traditional hub-and-spoke server model and results in lengthy delays.

Enter “edge” computing. Instead of sending data across long routes, edge computing processes data closer to where it’s stored. This means faster processing and a smoother experience.

Edge computing is one of the most promising tech innovations in banking today and is rapidly becoming a mission-critical infrastructure. That’s because of edge computing’s potential to be combined with other technologies like AI, cloud, and 5G networking across many banking use cases. And here are the most exciting ones.

Unlocking immersive, personalized digital customer engagement opportunities

Banks can use edge computing to deploy transformative and highly personalized customer service experiences. These include virtual tellers, near-field communications, and facial recognition technologies permitting relevant rather than generic products to be offered to customers. For example, when a prospective customer walks into a branch, they could be offered a suitable home loan, car loan or saving plan for relevant life events—instantly.

Permit increased financial inclusion

Banking can be made more accessible and inclusive with technologies powered by edge computing and 5G networking. For instance, it can make experiences like video chat with a banker more immersive and faster. It can also accelerate home or personal loan applications.

AI-powered video analytics

AI, when combined with edge computing, can be leveraged to capture, analyze and extract critical insights for improving customer experiences. For instance, this could include looking at how customers use the physical space of a branch, or even look at customer sentiment by using facial expression analysis.

Lean and portable bank branches

With edge computing, banks can re-think retail branch formats and develop lean, portable, shared and white-label branches. These branches could be served remotely by tellers and use computer vision and edge analytics. They could make it possible to offer customized financial banking products and services to customers located anywhere, including at concerts, hospitals and sporting events.

Next-generation analytics for smarter decision making

Perhaps most important of all, edge computing can help banks understand their customers better than ever. Edge computing offers the next level in creating personalized products, offering targeted campaign messages and pushing relevant product content to customers in the branch by leveraging anonymized data using the mobile applications, near-field communications technology, and location services.

New technology has played a huge role in changing the banking industry in recent years. Tech like AI and APIs are helping banks improve customer experience. With edge computing, banks are now able to provide improved experience more efficiently than ever. The opportunities it presents to banks to exceed customer expectations could without doubt provide a competitive edge.