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Why the network matters in the banking sector

24 September 2013  |  4716 views  |  0

As a result of a series of high profile service outages, core banking systems are now under more scrutiny than ever before. The RBS incident last summer was just one in a list of outages that impacted banks’ customers, which is now causing both industry watchers and regulators to ask serious questions about how reliable and robust the infrastructures that underpin the banking sector really are. 

 

Recent research revealed that many data centres are still based on 20-year-old technologies, to the point that they are being stretched to their limits because they were never designed for today’s always-on, multi-platform, application-intensive environment. Online trading platforms and consumer banking systems are now the norm, and mobile payment systems are becoming increasingly popular. However, the underlying infrastructure has not kept pace with innovation in frontline operational banking, leading to increasing pressure being placed on already overstretched back-end infrastructure.

 

To further complicate matters, banking is an international business with information being shared across multiple borders, and shared applications and platforms being stored in an environment where even a few seconds’ delay can have significant financial implications. For trading to be profitable in a highly competitive, highly computerised sector, traders rely on getting instant access to information, data and services. Ensuring security, privacy, data protection and maintaining regulatory requirements are met across different financial sectors, markets and geographies place banks’ core technology and data centre networks firmly at the heart of their operations and commercial viability.

 

However, a reliance on outdated network designs and technologies is leading to problems that are increasingly coming to light in the public domain. Overly complex networks make the deployment of new applications and service updates challenging, slow and often high-risk, and the cost of maintaining the networks takes up a significant proportion of banks’ IT budgets.  Combined with infrastructure failures that can take a considerable amount of time to identify and resolve, these issues are increasingly hitting customer satisfaction, creating demand for compensation and attracting the undesirable attentions of regulators. Uptake of online and mobile banking has ensured finance never sleeps with consumers refusing to tolerate outages or limited access to services. With severe financial penalties imposed by regulators and potential losses amounting to significant sums, the need for financial organisations to ensure that their networks can support current and future demands is paramount.

 

A new approach to data centre networking is needed, enabling financial organisations to adopt a highly virtualised, resilient and flexible infrastructure. With an infrastructure that combines the right physical and virtual networking elements, management of the infrastructure is simplified, the network can be made more reliable, and deployment of new applications and services can be “on-demand” as required by commercial and competitive demand.

 

A fabric network design overcomes many of the inherent weaknesses found in legacy systems. With more automation and more efficient connectivity, fabric networks provide the ideal foundation on which to deploy virtualised solutions, which will become increasingly key to managing, maintaining and utilising IT assets effectively without impacting day to day operations.

 

This “on-demand” data centre of the future will enable banks to flexibly manage data flow and traffic, and re-route and divert it in real-time, whenever and wherever they need to. Business analytics and system diagnostics can be run in real-time delivering significant commercial benefits.

 

And critically banks will be free to concentrate on delivering innovative new services to keep their customers, shareholders and the regulators satisfied.

 

TagsMobile & onlineRisk & regulation

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