How Technology Solves Threats to Banking in 2020

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There’s no denying the challenges posed this year to financial institutions by the global pandemic. But wait; there’s more. According to Global Banking & Finance Review, the other biggest threats to banking in 2020 are: BigTech, the emergence of challenger banks, the digitalization of banks, and global deregulation. To this list we’ll add the demand for customer-centric, fast delivery of all bank services. And, of course, the overarching need for security.

Big Tech and Customer Expectations

Big tech firms know how to deliver a seamless customer experience; most banks are still figuring that out. In his Banking CIO Outlook article Tech’s Lesson: Meet Consumer Banking Expectations Every Step of the Way, Flagstar Bank SVP & CIO Rich Fusinski talks about the importance of delivering technology flawlessly. Consumers, now used to the instant gratification of Instagram, Amazon and other big tech leaders, expect their bank technology to work just as easily. “If technology doesn’t work, they’re unforgiving.”

Fusinski says that while larger banks can disproportionately invest in technology, smaller banks need to focus on how they deliver technology. While resource constraints may require tradeoffs when it comes to bells and whistles, they still need a product that is easy to use, visually appealing and most important: reliable. Outages must be minimized. Fusinski emphasizes the need for a solid, high-availability strategy and the right partners to support stability.

Leveraging the Cloud for Fast Delivery of Bank Services

Technology can also help banks gain efficiencies. Core banking in the cloud is one such technology. While regulators used to frown on any tech not exquisitely controlled on-premises, they are now open to cloud solutions that include the right level of security and controls. In fact, for smaller banks, the cloud may be more secure and stable than what in-house capabilities can deliver.

In his article Cloud Solutions in the Financial Sector: A Technological and Cultural Shift, authors Alex Petros, Director of Finance at First Republic Bank, and Lubomir Lubomirov, CIO at Open Technology Solutions, talk about cloud adoption in banking and the culture shift required for successful migration to more secure, scalable and cost-effective platforms. They point out that cloud technology “has the potential to steer an entire industry towards a new delivery paradigm.”

Security

Banking security in 2020 will be impacted by political and social forces, technological and legislative. Mobile channel and the move towards open banking are two specific areas of risk Mark Crichton cites in his Information Age article Four ways banking security will change in 2020. Mobile banking will overtake phone and desktop banking due to its convenience and the preferences of Millennials and Gen Z. Fraudsters looking to penetrate those systems pose threats to banking. Also, hackers will exploit open banking applications that allow third parties to obtain and use customer data from banks. On the one hand, it’s great for customers to enjoy a seamless and fully integrated digital banking experience. But that opens them up to potential personal data breaches. Higher levels of security will be needed by banks and third-party providers.

Secure, Resilient Network Technology

At the core of these challenges and opportunities is the network that connects it all. Online and mobile banking, cloud-based applications, ATMs, 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 provide more bandwidth than ever and while providing enhanced security and resilience.

Case Study

Points West Community Bank has 17 locations in the southwest United States. Prior to upgrading to additional ISP services and Ecessa SD-WAN, their network was costly, inefficient and often unreliable. And it was single-threaded, meaning if a carrier had an outage, several branches at a time lost connection to the headquarters datacenter. Desktop sessions dropped, cutting off access to critical applications. Kenan Luptak, CTO of Points West, led the effort to upgrade their network with multiple fiber and broadband connections and Ecessa units to manage it all. Since the upgrade, their Citrix traffic running teller and loan processing applications has never failed, even when an ISP connection has been lost. The improvements in reliability and performance are felt throughout the organization. IT is getting calls of gratitude, instead of complaints.

“Gaining the increased bandwidth and redundancy with dual lines at each location was well worth the effort. Upgrading the network infrastructure to SD-WAN gives us greater resiliency and allows us to move to cloud-based SaaS applications like telephony.”

Kenan Luptak, Points West CTO

You can read the Points West Community Bank case study here.

Contact us to learn more about how Ecessa can help you create a solid, high-availability network, meet your data security goals, and minimize threats to banking.