Banking & Finance Compliance Challenges? SD-WAN Offers Solutions.

Keeping up with customer demands, shareholder expectations and emerging technologies can be challenging for any business. Add government regulations, such as demonstrating disaster recovery compliance to regulatory bodies, and an IT professional’s job gets that much harder.

Take banking and finance, for example, an industry layered with expectations and regulations – and opportunity. Deloitte’s 2020 Banking and Capital Markets Outlook recommends that banks invest in fixing basic issues arising from technical debt (the lack of legacy system modernization) and data quality issues before adding on more third party integrations and advanced technologies. 

Back to Technology Basics

Past underspending and layering new technology on top of old infrastructure has created many issues with technical debt. Legacy systems are among the biggest barriers to bank growth. Lack of rich data also prevents banks from receiving a full return on investment from new technologies. These areas in particular need to be addressed in a back-to-basics approach.

Banks are not only dealing with complex government regulations, but also  new digital competitors, disruptive technologies and soaring expectations from their customers. Key areas of consideration to enable long-term growth all involve investments in – and careful management of – technology. 

2020 could be the year of “build and migrate,” as banks continue to test approaches to core system modernization. Establishing a new, parallel, cloud-native core banking platform is gaining traction as a strategy. This is because it is less risky, reduces time-to-market, brings results, and allows core banking functions to be migrated over time.

Management of technology resources at most banks is challenging, involving a collection of new and legacy infrastructure, operating systems, platforms, software and tools. When it comes to technology management, modernizing core operating infrastructure is imperative. To achieve modernization in some functions, banks are relying more on the use of third-party resources to design, develop and manage technology solutions in the cloud. 

In 2022, North American banks are expected to spend nearly one-half of their total information technology (IT) budget on new technology, while European banks would spend about one-third. This will be in an effort to meet customer demands to make banking more open, transparent, real-time, intelligent, tailored, secure, seamless, and deeply integrated into consumers’ lives and institutional clients’ operations.

Banking and Security

Cyber risk is understandably a top concern for financial services risk managers. According to Deloitte, “The potential for cyber risk has been increasing with greater interconnectedness in the banking ecosystem, rapid adoption of new technologies, and continued reliance on legacy infrastructure designed for a different age.” The Gramm-Leach-Bliley Act, also known as the Financial Modernization Act of 1999, includes data security provisions to protect consumers’ personal financial information held by financial institutions. Other guidelines set forth by the Office of the Comptroller of the Currency (OCC) and the Federal Financial Institutions Examination Council (FFIEC) cover back-up and disaster recovery testing.  

At the core of these risks and opportunities is the network that connects it all. The operation of ATMs, online and mobile banking, cloud-based applications, data center functions and disaster recovery sites all hinge on robust, reliable and secure Wide Area Network (WAN) connections. To meet customer expectations and enable financial institutions to comply with government regulations, these networks must offer more bandwidth than ever, while maintaining security compliance.

Many banks previously relied on Multiprotocol Label Switching (MPLS) for secure site-to-site connections. For the bandwidth required today, adequate MPLS connections are often not available, or are cost prohibitive. Public broadband services solve the bandwidth issue but do not offer the same built-in security. That’s where Software-Defined Wide Area Networking (SD-WAN) fits in, establishing secure VPN connections across any service, from any provider.

Stearns Bank is a financial institution based in the Midwest, with branches in Minnesota, Florida and Arizona. The bank struggled with getting enough secure bandwidth, while demonstrating complete disaster recovery compliance.

“One of our data centers has limited options from a local telco. We were running on a bonded T1 at 3 MB and that wasn’t fast enough for even our day-to-day operations. Productivity was suffering because of speed,” said Jeff Nelson, Senior Network Infrastructure Engineer at Stearns Bank.

Stearns Bank needed to add bandwidth in a way that ensured safeguards to meet the needs of its customers and satisfy banking regulators. Advanced Communications Consulting (ACC), the primary consultants and telecom service brokers for Stearns Bank for WAN infrastructure and telephony, recommended Ecessa.  

“With Ecessa’s SD-WAN solution we’ve gone from 3 MB to 90 MB while remaining 100% in compliance,” said Nelson. The solution also helps Stearns Bank meet guidelines set forth by the OCC and FFIEC for back-up and disaster recovery testing. “Our data centers talk as if they’re in the same building. We can back-up in real-time, do disaster recovery testing and share databases between branches.”

Download the Stearns Bank case study below.

Download The Case Study

Contact us to learn how Ecessa can help you reach your organization’s data security and compliance goals.