Your legacy MPLS might be holding you back: why banking is better with SD-WAN

The banking sector has always been hyper-competitive, but in recent years that challenge has been amplified. Traditional institutions are in an ongoing battle with digital upstarts and fintech innovators to retain and gain market share. In simple terms, traditional banks have recognized that their services and customer experiences must be elevated, to satisfy increased expectations and demand. As a result, network performance has become a key competitive differentiator.

Banks and financial institutions are under growing pressure to transfer vast amounts of data in a rapid yet cost-effective manner. Multi-protocol label switching (MPLS) has been a mainstay of financial technology for more than 20 years, valued for its security features, low latency, low loss of data, and reduced error in data. Provided these networks have the proper bandwidth, they perform well for point-to-point connections such as branch to private data center.

However, it can be slow to deploy, and updates need to be carefully managed by the MPLS provider. Increased use of SD-WAN is a real consideration for banks, in situations where a public network can fill the needs of a given function.

In many cases, banks and financial organizations are finding that their costly and complex legacy MPLS is holding their business back. Older MPLS networks can hamper an enterprise’s need to modernize, as they find it hard to effectively manage application performance; with SD-WAN the prioritization of applications is more automated. Further, these legacy solutions cannot easily manage the increased amount of traffic on the network driven by users and apps outside of the data center. In a business where critical information is in constant flux, having the flexibility and control to preserve vast amounts of data and being able to access them instantly is necessary.

Many banks still rely on legacy MPLS networks to connect their branches to the main office. This can lead to network problems during mergers, restructuring, expansion and acquisition. And yet, there are still compelling reasons for financial institutions to handle some tasks over the private network of an MPLS.

The Cloud changes the game 

Cloud connectivity is also attractively affordable to banks in both time and money spent on innovation. As financial institutions rapidly adopt a cloud-first strategy, the IT landscape has been changing. Enabling secure access to applications wherever employees may be is a significant priority. With cloud access and integrated security, financial institutions can improve performance, reduce costs and protect critical assets. SD-WAN can help banks ensure application performance while adapting to changing conditions — with minimal manual intervention.

Reports of MPLS’s demise have been circulating for almost a decade, yet many IT decision makers are reluctant to abandon their investment in that technology. However, many forward-thinking financial technology leaders are embracing a hybrid SD-WAN model which allows private networks, such as MPLS, to co-exist with a more enveloping connectivity design.

According to BizTech, “Between offering easy, reliable network management, improving network performance, strengthening network security and enabling hybrid cloud success, SD-WAN is an essential solution for banks.”

SD-WAN offers banks greater administrative control of a wider network, with the ability to incorporate point-to-point, multi-point, and full-mesh topologies, instead of MPLS’s more linear chain. MPLS offers a single type of network connection, but SD-WAN can route traffic over multiple types of connections for better redundancy. Consequently, just in monthly bandwidth charges, SD-WAN offers significant cost savings over MPLS. Additionally, SD-WAN can use the backup circuit as a normal part of operation, providing more efficiency. This means that all the bandwidth an institution purchases can be used efficiently.

Banks can also extend their SD-WAN service to quickly add new sites and off-network locations and rapidly upgrade bandwidth. This can be accomplished with no changes necessary to the existing infrastructure or network, meaning that banks can activate branch offices and add services quicker and cost efficiently. Additionally, because SD-WAN has integrated security features, it may be safer to use than MPLS.

The advantages of hybrid SD-WAN

Hybrid SD-WAN is a digital transformation tool that allows for the advantages of SD-WAN without forsaking the reliability of existing MPLS systems. Banks see Hybrid SD-WAN as a way to tap into the power of the cloud without having to abandon private network connections they know and use every day. Further, a hybrid SD-WAN allows banks to migrate their network at their own pace, without needing to completely rip and replace their entire network at once. 

Hybrid SD-WAN is designed to allow for the continuation of MPLS systems for transmitting specific types of data but also incorporating internet-based WAN solutions like VPNs (Virtual Private Networks) in those cases where they make the most operational sense, like remote work and client support. Some sites can be connected to both MPLS and Internet, using Internet access where it makes sense for some traffic, and MPLS for other usage. Hybrid SD-WAN delivers the high performance of private networking where needed  between locations, and then the agility and efficiency of SD-WAN and local internet branch connectivity where desired.

Spectrum Enterprise can help

Your customers want anytime, anywhere access to their accounts. While the increase in financial services technology helps meet this demand, it also produces more data. Seamlessly gather, store, manage and analyze this data with high-bandwidth SD-WAN solutions that are both reliable and secure. As your technology partner, we will deliver network and connectivity services that will allow your team to connect with customers anywhere, anytime, even after business hours.