By Jeff Sieracki, Senior Director, Product Management, Lumen Technologies

Remember when banking used to be done only in a building? Savvy financial institutions are shaking the walls of the bricks and mortar that use to put them in a box. They are scaling, modernizing, rethinking and reworking both where and how financial services can be and will be delivered and consumed.

These businesses are on the forefront of a new transactional future. What far-sighted leaders are grappling with is how to get to that future without being slowed down by “the blur” created by all that transactional data. The blur is a fuzziness that seeps through a business, making every decision point and opportunity less sharp and harder to discern. And one of the biggest creators of the blur is the glut of data that cannot effectively be utilized and acted upon in more traditional computing architectures.

Competitive banks have set their sights on a hybrid computing architecture to fight the blur and clear the way to make customer-winning moves.  Adding edge computing offers a better, faster, sharper user experience. Edge also brings the bonus of tackling a huge banking concern — more robust security.

Designing the Perfect Hybrid Architecture for Today’s Financial Institutions: Extending the Cloud with Edge Computing

Eight out of 10 U.S. IT decision makers said they want a hybrid ecosystem and a single management tool for all their cloud, on-premises and edge environments.

Bank customers generate volumes of transactions every day. These transactions translate into data about their spending habits, location, preferences and more. Until recently, most data made its way to the cloud or an on-premises data center. However, most points of interaction in an organization are at the edge where data and consumers reside.

Hybrid architecture that combines cloud and edge infrastructure allows enterprises to deploy certain applications closer to where digital interactions are taking place, while also leveraging the public cloud and its resources.

A Closer Look: Understanding Cloud Computing vs. The Edge

Edge computing is an innovative way to deliver apps through a combination of distributed computing, high-performance networking, automated security and open orchestration for latency-sensitive, bandwidth-intensive applications.

It’s especially appealing because it goes wherever the user’s data or customers need it and it enables change across industries by allowing data to be processed locally in real-time. Processing data closer to its source tends to be less expensive, more reliable, more secure, faster and highly scalable.

Strategic investment in technology will separate future-forward financial institutions and prepare them for the next wave of banking

Traditional banks are shifting to keep up with an app-centric financial landscape. Local branches in particular are taking advantage of new technologies to stay competitive.

Mobile banking has changed customers’ relationships with finance, ushering in a new era of financial experience, both in-person and online. The days of going to the local bank branch to interact with a teller is a behavior of the past. Smartphones, the rise of embedded finance and the speed of day-to-day activities have changed the way customers prefer, and even expect, to bank.

Many new players and non-banks are also investing in banking-as-a-service (BaaS), forcing financial companies to re-think their role and suite of services. Banks and their branches are in a period of transformation, re-learning their users’ modern needs.

Differentiated, customized experiences that compete with banking-as-a-service will be key to long-term success. To move forward, investment in hybrid network infrastructures with edge computing that can accommodate these high-bandwidth, digital experiences will be crucial to usher in an era of improved banking ecosystems.

Market Drivers and the Hybrid Value Proposition  

We are entering a  4th Industrial Revolution where keeping up with data solutions is even more critical. Most enterprises deploying edge computing are highly focused on creating a scalable business model. Not only that, nearly one in three U.S. IT decision makers expect more than 50% of their organizations’ network to be on the edge within the next five years.

Recent changes in the standardization of financial products, increased capital ratios, company sizes and competition are all contributing to a shift in banking. Customers are looking for refined digital experiences that compete with mobile-only banks, banking-as-a-service and the convenience of embedded financial services offered by retailers, car manufacturers and numerous others.

Banking regulations combined with changing customer behavior are driving the market for a financial transformation towards adopting the edge. However, making large-scale organizational change requires sophisticated networks to ensure customization, security and proper data management.

Extending the cloud with edge computing offers the benefits banks need to stay in the game

With more than 75,000 bank branches in the United States, it’s time for a dialed-in, user-focused transformation. Banks can leverage thoughtful automation and virtualization to reduce the cost of branch separation as many exist in silos. With enterprise cloud and the edge on board, banks can create digital experiences that today’s customers demand. The thoughtful implementation of new technological infrastructures is a worthwhile investment for most traditional banks.

A younger demographic that relies less on the physical bank presence, but is accustomed to 24/7 customer service, is changing the way banks operate. This generation sees digital assets no differently from traditional assets. Digital interaction is their comfort space.

The cloud revolution, SaaS-driven outsourcing, automation and data analytics are all signals for banks to invest in future-proofing their networks in order to build a sophisticated ecosystem as a way to stay competitive.