How banks can provide the best digital client experience with a modernized network

U.S. banks closed a record number of branches in 2020 and 2021, seeking to cut costs and meet customer demands to digitally access financial services. According to Bauer Financial, the United States lost more than 3,000 bank branches in the 12-month period ending March 31, 2022. Banks of all sizes are seeking digital means to better serve the needs of their customers, as branch traffic remains sluggish, in comparison to pre-2020 levels. 

Banking customers are migrating towards digital services. According to the Statista Research Department, an estimated 197 million bank customers were using digital services in March 2021, and the number of digital banking users in the country is forecasted to reach almost 217 million by 2025. That firm predicts that, by 2025, 80.4% of the US population will be digital banking users. 

Although banks are indeed proving they can get by with fewer branches, their digital offerings have to be spot-on, and these offerings can be most efficiently delivered over managed networks. 

For example, relieved of network and cybersecurity responsibility, IT staff could more productively spend their time consulting on improving customer experience in the bank’s remaining branches.  According to the Financial Brand, “Banks and credit unions increasingly are adopting radically redesigned facilities, with smaller footprints, advanced technology that enables not only self-service, but a personalized experience, and much more highly trained staff filling very different roles.”

Some banks are engaging in direct banking — digital alternatives to traditional retail banks. In the J.D. Power 2022 U.S. Direct Banking Satisfaction Study, Paul McAdam, senior director of banking and payments intelligence at J.D. Power, states that “Today, 27% of banking customers in America use an online-only bank.”

Regardless of banks’ decisions regarding digital banking, branches or direct banking, we can all agree it's a brave new world for the financial services industry.  As such, it behooves banks to reconsider the technology they rely on to conduct their business every day.  It could be that the network infrastructure that worked perfectly up until a few years ago may not be able to satisfy the bandwidth-hungry applications and services that drive the banking world today. 

What banks must do to compete in a digital-first world

The ever-increasing use of digital banking has seen a corresponding reduction in foot traffic in branches — between 35% to 50% at most financial institutions over the past five years, according to bank research and consulting firm Bancography.

The banking industry is at a crossroads now and should be increasingly focused on improving digital services. Forward-looking banks are adopting cloud-based applications to gain efficiencies and introduce new digital services faster. Yet, many banks continue to rely on on-premises systems to safeguard users’ data. The challenge here is that legacy core IT systems can consume more administrative resources and incur increasing ongoing maintenance costs.

Need to modernize and upgrade

As banks offer more digital services and applications to compete with Fintech disruptors, legacy MPLS network infrastructures need to be modernized and optimized to support multiple services and traffic types without impacting performance to users and customers. 

To ensure flexibility, a bank’s network should be delivering employees across your organization secure, high-performing access to cloud applications. A network that supports traffic prioritization can route applications based on business intent, to meet complex routing requirements while optimizing performance across all endpoints, whether in the office or on the road. 

Older networks often struggle to allow for this level of flexibility or may not enable sufficient cloud access, whereas a modern network infrastructure delivers the secure access your teams need to do their best work, regardless of their worksite. Ultra-high-speed data managed networks are available today, that protect a bank’s critical applications from intrusions and make it possible to automatically apply the latest security policies everywhere.

Can your legacy network securely handle today’s bandwidth demands?

Keep in mind that a bank’s network should serve double duty, improving the user experience for both employees and customers. It’s business-critical that a network facilitates better interactions with customers through superior functionality, easily navigable and frequently updated websites, and if needed, customer portals. 

Banks must adhere to stringent regulatory requirements, especially as more sensitive data moves between branches, HQs, mobile users and external cloud environments. All these requirements, and the increase in traffic they create, highlight the need for increased bandwidth capacity.

Banks should consider moving away from legacy MPLS in favor of hybrid WAN to handle larger branch data volumes, backups, local internet access and efficient traffic routing between private data centers and the cloud. This can also help with branch and virtual office consolidations and simplify IT management.

Many financial institutions are now seeking partners that can offer a viewpoint on SD-WAN transition. Some organizations are turning to fully-managed SD-WANs, as deploying and managing the underlying WAN infrastructure can be time-consuming for overextended enterprise IT departments. This has the advantage of engaging one vendor to manage the SLAs, be the single point of contact across the network, coordinate updates, provide security updates proactively to respond to evolving cyber threats, and free up your IT staff to work on business-critical initiatives.

How Spectrum Enterprise can help

For banks seeking to improve their digital and mobile banking options, connectivity demands continue to grow. And so do the expectations of your employees and customers. Don’t just meet expectations, exceed them. Our solutions deliver layers of protection, with built-in redundancy, to prevent attacks and protect your traffic. We have the infrastructure and expertise you need so you can focus less on security and more on business growth. Ongoing partnerships with industry leaders, like Fortinet, Cisco and Netscout, enable us to apply the best security solutions and processes that fit your needs and reduce the burden on your IT staff.

Learn more about how we can help your bank through your network modernization journey.