Edge Computing in Financial Services

It seems only yesterday everybody was rushing to join the cloud bandwagon. Now, with the impending arrival of 5G—responsible for igniting the Internet of Things (IoT)—companies are rethinking their IT frameworks once again.

Edge computing is poised to become the central technology for supporting data processing in the coming years. It will allow for smart objects to process their own data without it needing to sync back and forth with the cloud.

But, why edge computing?

The current volume of data created worldwide is expected to reach 41 zettabytes (a zettabyte equals around a billion terabytes) by the end of 2019. However, BBVA estimates this will be 10,000 times greater by 2025.

In layman’s terms: that’s a lot of cloud storage space.

When we talk about 5G and the IoT, we’re not only talking about robotic arms and smart homes. We’re talking automated cars and airplanes, producing 4 terabytes and 70 terabytes per hour respectively.

If we have to wait for this high amount of data to be processed by a cloud and sent back, these vehicles will not be able to respond and adjust fast enough.

From here stems the idea of processing data locally, within the smart object itself. The same rule applies to data being received at a local call center or through a bank branch.

Why upload everything to the cloud when you could process it first and then only transfer what’s necessary?

Understanding edge computing

Imagine the cloud as an actual cloud in the sky. Clouds are formed by the moisture around it. But what if, instead of letting the cloud absorb everything all the time—resulting in a storm, aka too much information, what if we placed boxes around it that capture data?

These boxes process data to ensure only what is truly necessary makes it into the cloud.

While IoT devices may appear more vulnerable to attacks than a robust, all-encompassing cloud, the mere division of information into smaller pockets makes it easier for cybersecurity teams to simply shut down one part of the system if there is ever an attack.

The benefits of edge computing

Think of what happens to a slow-loading website. Not only do search engines penalize it, but customers who do find the page end up exiting and never returning.

As we discussed before, edge computing makes local data processing possible, resulting in increased speed and lower latency.

Another way in which edge computing can benefit financial services is that it helps institutions comply with regulations. Not all data is international, and global access is harder to control when information is up on the cloud. To comply with regulations, customer data often cannot leave a certain country or region. With edge computing, companies can store information outside of the cloud but while still having it belong to the company’s data ecosystem.

When it comes to reducing costs, edge computing can help by limiting data expenditure on your network, which translates into less upkeep and resources.

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