By Johan Ottosson, VP Strategy at Telia Carrier, looks at current opinions in the banking and finance sector on corporate WANs and new ways of doing things.
The banking and financial services industries have fully embraced the digital revolution. They rely on their ability to make transactions safely —at speed and at scale — and they want cutting-edge solutions that maximise efficiency and minimise carbon footprint. However, recent global research from Telia Carrier on the evolution of the corporate WAN and cloud, reveals dissatisfaction with current WAN providers and uncertainty about better solutions. Put simply, leaders in the banking and financial services industries know what they want, but they face significant challenges as they try to develop the corporate WAN for the 2020s.
Our research looked at the evolution of the corporate WAN and cloud adoption in four of the world’s biggest markets — the US, the UK, Germany and France. The research, based on a survey of senior decision-makers, reveals dissatisfaction with current WAN providers and uncertainty about better solutions from key stakeholders. Broadly, the conclusion was that leaders in the banking and financial services industries know what they want but not necessarily how to achieve it.
The digital opportunity
In the world of banking and financial services, leveraging the public Internet and enabling cloud-based services dominate the WAN landscape (93% and 96% respectively in our survey). Industry leaders rely heavily on connectivity – both for their core processes and new digital customer interaction – and are hungry for new tools that improve speed and efficiency, but are also mindful of environmental concerns, with significant numbers associating good technology with green technology. Institutions understand the importance of evolving their technology, and can see how transforming their corporate WANs can have a positive impact on the business:
- 85% in the banking industry and 90% in financial services want more automation to enhance their network services and connectivity experience
- Network visibility plays an important role in managing reliability and the end-customer experience. 46% in banking and 39% in financial services make use of application programming interfaces (APIs) to gain real-time visibility of their WAN performance
- 41% say a corporate WAN outage would have a high impact on their businesses, so appreciate the significance of building in resilience, and working with the right providers
- Significant numbers associate good technology with green technology: 28% of banks and a sizeable 44% of financial services companies say they only shortlist companies with a strong commitment to environmental responsibility.
Getting over the challenges
In today’s world, banks and financial services institutes need the bandwidth, scalability and network footprint to adapt to changes in traffic volumes as they grow and expand across diverse geographies. They also need bandwidth flexibility during spikes in traffic, optimal levels of data security throughout the ecosystem of providers, low latency that minimises lag and delay, and a combination of self-provisioning tools and personalised, human-touch service and support. That is a lot of things to try and get right!
For too many, however, this is a WAN ideal that is out of reach.
The problem stems partly from the legacy of a different era, where connectivity needs where equal to a static, internal-facing WAN, and the supplier base mainly limited to incumbent telco providers. Internet connectivity – equal to the local ISP – was a minor concern with limited applicability for the WAN. This tendency to think of the public Internet as a commodity that doesn’t vary significantly in quality seems to persist – 48% of those surveyed in banks, and 63% in Financial Services firms believed this – but this couldn’t be further from the truth. This outdated view, and the lack of knowledge of alternative providers, can mean that leaders are not always making informed decisions about their network development strategies. As a potential option more in line with today’s requirements, the global Tier 1 network providers of 2021 have long outpaced the old Postal Telegraph and Telecommunications (PTT) of 20 years ago, and offer direct, high-bandwidth connectivity to the Internet and cloud but are often overlooked.
Speed, bandwidth and consistency are not the only factors either. Security and customer experience matter immensely for any business, but understandably banking and financial services are particularly sensitive to both. Here, a worrying 41% of banks and 38% of financial services companies say simple problems take providers too long to resolve with their existing provider. Often, this is not just about the level of technical resource available, but where it sits in the network. In an Internet-centric network, the further down the supply chain, and away from the backbone that a network provider sits, the more likely it is to suffer congestion, and the more complicated it can be to discover a root cause and get it fixed.
The biggest pain point for respondents was security, which is so critical to banks and financial services companies (33% and 20% respectively highlighted this). Yet, despite attacks such as BGP hijacks (also known as route or IP hijacks), affecting large brands, many companies are unaware of how to keep traffic safe in an Internet-based delivery model. Whether it is ensuring customer data remains protected in transit or having the resilience to defend against DDoS attacks designed to try and taking financial institutions offline – a network provider should be the first point of defence for its customers.
Banking and financial services industries may need to review their IT strategies and look more deeply into the infrastructure underpinning their mission-critical networks. Top-ranked Tier 1 backbone networks can promise high bandwidth and low latency and, thanks to their close relationships to the tech companies that have built their business on the Internet, also explore transformative tools and technologies. But there are questions that should be asked of every network provider to evaluate for your connectivity needs, and these broadly fit into five areas:
- Scalability and reach – Does it have the capacity, footprint and peering ecosystem to adapt to rapid changes in the volume of data traffic, regardless of where or for which digital service?
- Reliability – Is the supplier able to resolve issues quickly, or better yet, prevent them from happening by re-routing traffic easily to avoid congestion and service outages?
- Security – Can it keep customer and business-critical data safe; does it offer the right mix of public Internet and private connectivity, with full network control, down to the fibre layer? How will it help keep your Internet-facing attack surfaces shielded?
- Innovation – Is it a leader in fibre optics, APIs, SD-WAN and other emerging technologies?
- Sustainability – Does it have a good track record on sustainability; does it deploy new technology in the most environmentally responsible way; do its data centres prioritise green energy?
The banking and financial services sectors rely on their ability to make transactions safely —at speed and at scale – so strong corporate networks are core to the business model. Corporate network providers are mission critical partners, so the choice of network provider has a critical role to play in any brands future, especially in an increasingly digitalised world.
Building a scorecard for each supplier around each of the key areas outlined above can help in making more informed choices that will be aligned with your connectivity goals. For banks and financial services organisations that really want to create the networks that will transform their businesses, whilst controlling costs and reducing their carbon footprint, it will be essential to review their network strategies for the next three to five years. Network providers can be strategic partners supporting growth and innovation — the trick is choosing one that is aligned with your needs.