IT Transformation in Finance: Banks Need SDN to Succeed
The banking and financial sector is currently experiencing many IT dilemmas, including those stemming from banks’ changing relationships with their customers. The days of customers coming to brick-and-mortar locations during regular business hours are all but over. Today, customers demand banks and their services be available at all times, and financial institutions are going to need radical IT transformation to meet these expectations.
Banks Face Mobility Challenges
Banks must now support all mobile devices customers use, not just the bank’s proprietary terminals. Mobile devices will continue to be a moving target as technology advances, creating a headache for administrators of fixed networks.
Software-defined networking (SDN) will play a big role in the banking industry’s impending IT transformation. SDN can be configured to meet both a bank’s current and future needs. SDN also allows banks to mix up which parts of their systems are handled on-premises (perhaps with extra security) and which can go out to the cloud.
SDN Implementation Steps
While SDN may seem appealing to banks, few will be able to revamp their infrastructure in one fell swoop. Instead, they will have to take their time and incrementally move toward a software-defined network.
There are three basic steps to SDN adoption that banks must take into account. The first is to strategize and design a solution to improve workload placement flexibility and network agility. Third-party network services providers can help here, but organizations must analyze what is expected of their networks if they want to design an efficient SDN solution. During this process, banks need to answer the following questions from a business perspective:
- What do financial customers want?
- What will the network deliver to them?
- Where will the data come from?
Once paths have been plotted, the second step is to come up with a way to consolidate and virtualize the bank’s networks, as this will give it the scalability necessary to reduce costs. The network’s scalability will also be a primary factor in ensuring agility — as demand load changes, the network will allow change to meet it.
Last, banks will want to use analytics to automate and dynamically optimize the network, as this will enhance the user experience and support the business model. Analytics will provide a window into how operations are actually functioning and what can be changed to make processes work more efficiently. If the company doesn’t have the necessary in-house talent to maintain these tools, it makes sense to use an outside operator to maintain the network.
Using IT Transformation to Move Ahead
If recent trends are any indication, financial services are going to be increasingly delivered through digital means in the years to come. As new ways of doing business emerge and new technologies take their toll on bank infrastructures, legacy networks will have to be replaced because they are costly to maintain and often prevent newer technologies from being adopted. Bank executives need to enthusiastically support this transition to SDN and understand that it will be vital to maintaining relevance in the changing financial industry.