Secure Edge Computing Spurs Innovation for Banks & Financial Firms

Natalie Parra-Novosad
Marketing Manager

IoT devices and edge computing for banks

When we think of the Internet of Things changing our lives, we often think about smart watches, smart homes and smart cars, but IoT devices are also changing banking, manufacturing and heavy industry too. The IoT and edge computing are changing the way the banking industry does business, making everyday banking, trade and wealth management more transparent, accessible and efficient for customers.

Wearables with Pay Applications

Smart watches, such as Apple watch and Fitbit, have started integrating pay apps into their devices, such as FitPay. Banks have also begun to develop their own apps for smart watches, such as Barclays’ bPay.

Internet-Connected Vehicles

Banks and financial services firms are working on wealth management and payment apps for smart cars that enable passengers to pay for gas, pass through car washes, pay for tolls and review wealth management portfolios all via internet-connected vehicles. Idea Bank from Poland has taken a novel approach by creating mobile ATMs – cars that collect deposits and dispense money to businesses or individuals. Bank patrons only have to request the car via mobile app – similar to requesting an Uber – and the car arrives in minutes. IdeaBank’s system makes it safer and more convenient for customers to make deposits, and they have seen customers making larger deposits. Mobile ATM’s now account for 20% of their cash transactions.

Blockchain, IoT and Smart Contracts

Blockchain technology is already providing companies and banks involved in trade deals with efficiency gains. A process that once relied on sharing extensive documentation – contracts, letters of credit, bills of lading and certificates of origin — can now be organized and viewed through collaborative platforms. Contracts terms can be verified by all using blockchain ledgers. By placing internet-connected sensors on shipments, all parties involved in a trade deal know where shipped goods are at all times. The first successful global trade transaction using blockchain and IoT took place in 2016 between the Commonwealth Bank of Australia, Wells Fargo, and Brighann Cotton and involved a shipment of cotton from Texas to Qingdao, China. By the end of 2017, ten global banks were participating in “smart trade.”

Banking via Voice Assistant

Some banks have started offering their customers the option of using a voice-activated digital assistant to conduct routine banking tasks, such as checking their balances or making payments. For example, U.S. Bank was one of the first to develop an Amazon Echo skill, enabling customers to check their account balances simply by asking Alexa. Other banks, such as Barclays and Santander, have started using voice recognition to detect their customers’ voices on the phone. Now their customers do not have to provide all their account information every time they contact customer service.

Secure & Reliable Networks Are a Must

Banking that relies on IoT devices relies on networks. To take advantage of IoT technologies, bank networks must be as secure and reliable as possible. IoT devices themselves are difficult to secure. Keeping up with security updates and key management for IoT devices with diverse communications standards can be a costly endeavor for most companies. It’s because of this that researchers have recommended a security agent at the network edge, such as a router or base station, be installed near users to process security algorithms and encrypt data to and from IoT devices.

For the level of security that is necessary for banking applications, advanced cryptographic algorithms are required. These compute-heavy operations are unrealistic for resource-constrained IoT devices. By using security agents that cannot trace the identity of each IoT device (for privacy reasons), but can simplify key management, authenticate diverse devices and perform attribute-based encryption, banks can securely serve customers using smart devices.

The Rise of Edge Data Centers

As banks and other finance firms rely more on IoT and edge technologies, there’s a growing need to store and process data in edge data center deployments that are closer to users.  This means having multiple smaller edge deployments in population centers around the country rather than having one or two large corporate data centers. Because they are closer to users, edge data centers allow data to be processed closer to the source, resulting in low-latency, low-cost network transport. Edge data centers can also provide the same network redundancy and redundant power and cooling of a large corporate facility with the added bonus of carrier diversity and direct connectivity to the cloud.

Learn about our edge data centers in Austin and Houston, TX.