WAN (Wide Area Network) optimization is an important part of enterprise network strategy for financial institutions. Community banks and credit unions utilize their WAN’s to transmit data to and from their branches and carry out daily functions regardless of location. The WAN is often comprised of public networks, such as the telephone system, leased lines, or satellites. Effectively managing your bank’s WAN consists of monitoring both the on-premise communication equipment (routers, layer 3 switches, firewalls, etc) and the circuits that carry the communication; however, this monitoring can be costly and complex. Let’s discuss some different options that today’s community financial institutions have to manage their WAN.

Option #1: WAN Management via the Carrier

Banks often use telecom carriers to provide network management for their WANs. Most telecom carriers offer an option that includes a router for termination of MPLS circuits, Internet access circuits, etc.

Banks use this option because it is the most economical approach to managing their WAN; however, expect minimal support. Carriers typically design simplified support tools to fight fires by focusing on managing the up/down status of the circuits. This reactionary type model offers minimum maintenance. The telecom carriers wait until they are notified of an issue, most frequently by the end user who, themselves, are only aware when they begin experiencing poor performance or downtime.

In most cases these tools simply aren’t sophisticated enough to allow for deep inspection of traffic patterns or usage. Even for administrators with enough expertise to keep WAN administration an internal function, these tools should be supplemented to allow for more proactive monitoring. Layering 3rd party software or services on top of the basic telecom-provided greatly enhances this approach to monitoring.

Pros: Least expensive option
Cons: Minimal support, supplemental 3rd party tools needed

Tip: Carrier-provided WAN management will focus primarily on WAN circuit status – they position themselves in this manner to limit their involvement concerning the overall functionality of your WAN. NOC’s (Network Operations Centers) are not profit centers within the carriers – most telecom NOC’s run “lean and mean.”

Option #2: WAN Management via Core Providers

Core providers also provide a network management option for your bank’s WAN. Most banks that use this strategy like the convenience of using a single provider for both core processing and WAN connectivity. All connections are seamlessly connected back to the core provider, and, depending on the vendor and purchased options, these connections may be more closely monitored by the core provider’s NOC. This option provides a single point of contact as well as a single bill for your bank’s solution.

Expect to pay a premium for convenience. Core providers do not own the underlying infrastructure used to deliver the WAN circuits. Core providers typically use a single large national partner (e.g., AT&T, Verizon, etc.) to offer WAN connectivity services. Those underlying carriers have a profit margin to make, and that is stacked on top of the margin that core providers will take. Taken together, these factors make bundling through your core provider the most expensive way to manage your bank’s WAN.

Beyond the extra cost there is often another area that can prove to be problematic for your financial institution if you allow your core to provide your WAN. Core providers can be very limited in the flexibility of the WAN technology that they provide. Most bankers are familiar with the rigid standards required by core providers when you are running out of their service bureau. In much the same way, core providers tend to be very limiting on routing configurations. These restrictions are perhaps most visible to an average FI when they move to implement a BCP/DR strategy. Most cores will not allow the protocols required to have Internet and network server connectivity automatically re-routed in the event of an outage.

Pros: Single bill, single point of contact
Cons: Most expensive option, limited carrier choice, limited flexibility

Tip: Convenience offered by WAN management from core providers comes at a steep cost.

Option #3: WAN Management via a Managed Services Provider (MSP)

Many banks opt to use 3rd party MSP’s to manage their WAN connections. Many telecom carriers offer unmanaged circuits (i.e., they offer a circuit-only option that does not include a managed router). Under this approach, unmanaged loops are terminated on equipment that is bank-owned or provided by an MSP. The MSP manages the overall solution to varying degrees, based on the vendor and product.

Unlike the core providers, MSP’s typically have multiple arrangements with national carriers and will often offer more options for WAN connectivity. This flexibility typically translates into lower cost to the bank than their core provider can offer.

Another benefit offered by this approach is that you assign the proper roles and responsibilities to the appropriate parties. Carriers specialize in ensuring the simple up/down status of circuits and this management model allows them to focus on this one important responsibility. Similarly, MSP’s are responsible for the overall health and management of the WAN solution.

Pros: Best support, competitive pricing, multiple carrier options
Cons: Multiple bills, multiple contacts

Tip: MSP’s typically offer a wider variety of management tools and better reporting on WAN usage.

Engineering Best Practice/Conclusion

There are many choices when it comes to managing your bank’s network. While only management can decide which option is the best fit for your financial institution’s needs, a specialized MSP offers the most comprehensive set of services at a competitive price. While not the cheapest option available, a MSP may be the most cost-effective option by ensuring that your WAN properly fits your business needs. Such specialized 3rd party vendors can also offer the expertise necessary to help your bank explore more advanced networking, such as ensuring high availability and implementing disaster recovery fail-over scenarios for both core processor and Internet connectivity.

Don’t Go IT Alone!

It seems like IT budgets shrink every year, and IT staff members must often focus on other priority projects. The right vendor to help you seize control over your WAN should offer an experienced staff that can guide you through the process of designing a WAN infrastructure. Don’t accept a one-size-fits-all solution, and seek out a vendor that will listen to your concerns in order to help implement a management strategy that meets your requirements. WAN connectivity presents a significant recurring business expense, and a solid WAN management partner can help you get the most out of this investment.



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