Edge computing enhances data processing efficiency by bringing computation and data storage closer to the source of data generation, rather than relying on a centralized cloud. This proximity reduces latency and enables faster processing of data, which is crucial for applications requiring real-time analysis, such as IoT devices. By processing data at the edge, businesses can minimize bandwidth usage and improve responsiveness, allowing for better user experiences. Additionally, edge computing supports data privacy by keeping sensitive information closer to the source and limiting unnecessary data transfers to central servers, thus enhancing security.