The significance of blockchain in banking sectors has been rising like never before. It has the...
With the evolving and emerging technologies, banks are looking to provide superior, engaging, and great customer experience. There has been a wider adoption of digital and mobile banking technologies. In this age of data-driven banking, a significant amount of pressure is taken by Banks’ IT infrastructure, and in this, Edge Computing has emerged as a game-changer.
Edge computing is a distributed computing framework that brings enterprise applications closer to data sources like the Internet of Things (IoT) devices or local edge servers. It helps banks to bring analytics closer to data instead of shifting data to a centralized data center to conduct analytics.
The significance of this technology can be deduced by the fact that it allows faster data processing locally either on a device/on a local server instead of transmitting to a centralized data center. This permits smart devices or banking applications to process data instantly as and when they are created, removing latency and enabling faster decision making.
In traditional models, data collected by banks is routed back to a centralized data center for processing, thereby causing latency and potential delays in customer servicing and real-time offerings. With the adoption of EC in banking, this can be avoided.
It can also help in reducing the load on a network by processing data locally and transmitting only the relevant information to the data center once a day for record-keeping. It is a cost-effective method and it also adds a layer of security as well, as the locally processed data is not required to be transmitted over a network for processing.
Many banks have started experimenting with it, and it has helped banks bring analytics closer to customers.
Some of the use cases in banks and financial institutions are listed below:
Banks tend to offer generic products to customers when they walk into their branches. The products may not be relevant to those customers, and chances of conversion are less, but with near field communication technology and data based on interactions with a customer and by applying real-time analytics, banks can offer personalized offerings.
With many people onboarding, digital banking of late, banking frauds has also risen. These frauds can take place at the transaction level or be deemed to be suspicious activity depending upon payment frequency or profile changes. Therefore real-time fraud detection is essential so that timely action can be initiated. With this technology, banks can deploy a real-time fraud detection mechanism through real-time analytics for each transaction.
For trading firms and in the case of hedge funds, latency by even a millisecond in providing an update on a particular stock or hedge fund information can substantially impact the business. Banks can deploy EC technology to set up infrastructure near stock exchanges with a view to process data in real-time and run complex algorithms.
Insurance companies monitor car condition and driving statistics to decide insurance premium. The insurance providers can monitor real-time data with a device in the car that monitors it on a regular basis to come at the suitable insurance premium.
Banking can be made more accessible and inclusive with technologies such as this.
Customers, as well as banks, are set to benefit by it in the following ways:
As EC eliminates the need for sending customers personal information to the public cloud, the security concerns to the process of moving data are eliminated. As the data stays closer to its source, it reduces the chances of cyber attack penetration.
With this technology, data is able to be processed faster as it does not have to travel to and from a data center. This can help banks when they are required to make near-real-time decisions.
These days banks have increasingly relied on the internet of things to interface with their customers. Banking applications, ATMs, etc. require increased data processing capabilities. This technology provides space for many Internet of Things options with fewer data limits.
Innovation can be achieved when there are no security issues or when speed is not a matter of concern, and banks can implement the Internet of Things. This, along with EC potential cost benefits, can allow banks to implement new solutions.
Where there is no need for a data centre, costs required for the data centre and the costs as are necessary for sending data back and forth to data centres or the clouds are reduced.
Among all the advantages and benefits that this technology provides, it helps banks to understand their customers better, and this is what banks must focus on. It offers next-level personalized products and pushes relevant products to customers in the branch by leveraging anonymized data with near fields communication technology and location services.
New and emerging technologies have played a pivotal role in improving customer experience and meeting their demands and expectations in the banking sector. With this technology, banks are able to provide improved customer experience more efficiently than before. It provides banks with an opportunity not just to meet customer expectations but exceed it and thus has a competitive edge over others.
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