bankingciooutlook

Why Network Transformation is Key for Mobile Banking Strategies

By Christopher Bright, Managing Director for Financial Services, Verizon Enterprise Solutions

Christopher Bright, Managing Director for Financial Services, Verizon Enterprise Solutions

Similar to the disruption happening across the retail industry, where traditional retailers are pivoting to compete with ecommerce powerhouses, many financial institutions are facing the increasing need to invest in mobile banking strategies to retain and attract new customers who are now accustomed to taking a mobile-first approach in their daily lives and want to do the same when it comes to their banking. More often than not, consumers are transferring and managing their money digitally, making it do or die for banks to be able to accommodate the growing app economy that people now ‘bank’ on to speak.

Specifically, today’s digital consumers are increasingly turning to mobile devices for everything from making payments and managing their savings to applying for loans and even managing investments, and they’ve come to expect easy to use, secure mobile options for all of those functions. As consumers increasingly signal their preference for mobile channels, financial services institutions are realizing that they need to increase the speed, security, and convenience of their own offerings in order to keep up with demand and competition from newer, non-traditional competitors such as Venmo, Mint, Paypal, Google Wallet, LearnVest and more.

Ushering in Modern Day Banking with a High- Powered Network

To better accommodate customers, who now take for granted that they can rely on their smartphones to make many of the same financial transactions they used to make at bank branches, many financial institutions are adopting cloud-based applications and services to meet these expectations and provide services securely across locations and devices. This is even more important given that consumers aren’t the only ones relying on their smartphones for these services: many banks now provide employees with mobile tools, which allow them to efficiently look up customer information, approve loans, and manage account changes.

"Software-based architectures are helping banks create networks that are more flexible, agile and faster than ever before, ultimately bolstering their cloud-based and mobile services"

Unfortunately, one of the most critical success factors for achieving these capabilities is falling by the wayside: network transformation. A recent study found that without the proper network infrastructure in place to support cloud deployments, at least 50 percent of companies experience business-impacting performance issues that require extensive network redesign to address them.

This is because banks are increasingly relying on cloud services for mission-critical workloads–such as managing, transferring and keeping track of their customers’ money. However, factoring in the health of their network connectivity is critical for maintaining the speed, security and reliability needed to manage these growing volumes of sensitive data now being transmitted by banks on a daily basis.

Supporting Banking of the Future–Now

With more financial applications now hosted in the cloud, and with these cloud-based applications sitting outside the traditional internal network, a different, more optimal network model is required. Banking network infrastructure from even five years ago may not be up to the task of supporting how far technology has come since then.

To help financial institutions successfully integrate network transformation into their mobile-first strategies, many of our financial services customers are turning to software-defined networking (SDN) architectures such as software-defined wide area networks (SD-WAN). Software-based architectures are helping banks create networks that are more flexible, agile and faster than ever before, ultimately bolstering their cloud-based and mobile services, allowing consumers to have more seamless user experiences.

Whether it’s faster mobile payment transfers, reduced lag times for credit card applications or even support for new AR (Augmented Reality) and VR (Virtual Reality) applications, the implementation of SDN allows networks to automatically adjust during times of high traffic, so mobile banking capabilities won’t be compromised or crashed. Because these technologies are software-driven rather than hardware, the network can automatically adjust to different levels in volume. For example, a bank’s network can automatically adjust capacity to handle historically high-traffic periods such as the first five days of the month when mortgage and rent payments are typically transferred from consumers to financial institutions and property managers.

Software-defined networks can also better support increased network traffic within a branch, so that crucial capabilities such as wire transfers or account updates will remain online and won’t be compromised or delayed. When a boost in network speed or bandwidth is needed, banks no longer have to wait for a technician to make a service call to adjust network hardware which could take days or even weeks to schedule. Instead, that same intelligent automation built into the network software prioritizes the most important applications, helping prevent congestion and creating a more elastic and flexible network.

This intelligent automation also opens networks to being updated and improved through pushed software updates as needed, reducing the need for cumbersome hardware upgrades and allowing for the support of leading-edge applications. This flexible architecture also allows banks to respond to the latest malware threats and put in place robust security measures to help protect their customers’ personal banking information and corporate assets at the network level.

Integrating a Successful Network Transformation

Before beginning a network refresh with SDN, financial institutions should define their objectives and decide exactly what they want to achieve. This will allow banks to clearly articulate requirements to their IT teams and ensure alignment between the needs of the business and IT. It is important to make the right investment in network infrastructure now as, thanks to software-driven updates which happen efficiently, today’s networks will have more longevity than the network hardware of years and decades past.

Ultimately, a healthy and agile network vastly improves the functionality of the cloud-based technologies that support the mobile banking services which consumers and employees alike have come to rely on for their banking needs. Making the investment in network transformation is crucial for supporting this shift in how people now like to bank. Ushering in the bank of the future starts with putting the right network in place to support not only the technology of today, but the smart technology-driven applications that will exist in the future.