Data and edge – ‘Da-edge’, to be a new phenomenon in the banking industry

By Nilesh Gupta, Head of CloudFirst & Edge Services, 3i Infotech

The digital payment space across the world has witnessed a steady transformation since March 2020. The lockdown period in major countries witnessed significant limitation in spending among consumers with the physical currency and forced them to use digital wallets and online mode of payments. Businesses and consumers including me found alternative payment methods choosing digital over cash payments and safer procurement methods with e-commerce from groceries to luxury items. When more than half of the world went online, so did the growth of data on the edge. To be more precise – intelligent data could empower these digital wallet companies, financial institutions and banks to know more about you and me with the power of Artificial Intelligence and big data built together.

The digital footprint, that includes all the trail of data consumers leave behind while using the online mode for spending is easily accessible to these companies, with them keeping a close tab on our when, what, how, where etc. Also, with this same data, banks suggest and take informed decisions on our behalf as to where our next investment should be, renew our insurance based on last purchase and if possible, suggest a better premium, offer more discount on our favorite restaurant the next time we visit etc. With respect to banking industry, data and edge are going to be a new phenomenon in the making. If I had the liberty to coin a new word, I would call it ‘Da-edge’ (pronounced as: the-edge).

In the banking industry, edge services will be an important component for mission-critical infrastructure that will be even more powerful when combined with AI, cloud, and 5G. With Covid-19, customer experience had a new benchmark and it essentially kept technology and business model compete with each other. Though the banking sector is invested heavily in legacy infrastructure for reasons we all know best, yet the industry is known for being an early adopter of next-gen technologies including cloud, Artificial Intelligence, Machine Learning, blockchain and more. Many of the banks are now moving out of their legacy infrastructure to tap the new phenomenon and provide a better customer experience every day.

With the ability to put infrastructure and applications at the edge, banks can speed up their real-time alerts by processing their data at the edge and creating a genuinely on-demand customer experience. Let’s imagine you are at an offline store buying a shoe, at the payment counter you don’t want to enter your passcode, but instead use the banking app on your smartphone which then becomes your swiping machine and with just your good-looking selfie, the payment is done. This means AI-based real-time video analytics needs to be executed to connect to your bank, make an informed decision to approve the payment based on validation of the selfie (by choice or forced) and account balance to pay the store. The combination of edge computing and cloud will help banks utilize these distributed systems by processing data on the edge location and sending relevant data to the cloud to be processed and saved.

Imagine the death by legacy infrastructure, which will happen if banks do not move away from propriety and legacy applications that run on hardware which cannot scale to match today’s customer experience and demand. IDC predicts that 80% of banks in India will run trade finance and treasury workloads as SaaS or on PaaS architectures. Banks should look at moving to cloud as an opportunity to upgrade their technology and continue to serve its customers. Cloud and edge technology enable banks to adopt a new paradigm for delivering creative channels, reducing time to market of new offerings, satisfying customer expectations, and complying with country specific regulatory compliance at a cheaper cost. Today, there are better security solutions in place that protect bank’s customer data proactively. Whether the data is in cloud, at the edge or in-transit, SASE (Secure Access Service Edge) based solutions help to provide an end-to-end security solution on cloud with centralized visibility across banking hybrid landscape that provide administrators with better monitoring abilities and management.

Cloud and edge computing could offer a lot of potential for banking institutions in different ways that have not been fully addressed yet. Many industry experts have already mentioned in the recent past that digital transformation has taken an acceleration and we have achieved many years of transformation in just few months. Cloud computing could produce unprecedented customer experience and will be the first step in the right direction, by enabling new ways of interacting with customers while strengthening their own brand. Speed has become paramount to securing a competitive advantage on cloud within the banking industry to maximize the profits.