As more and more applications move from your premises to the cloud, bank IT and operations managers are placing greater focus on their WAN communication infrastructure. This is a shift from traditional views of the data communication network as a largely inconsequential but necessary utility, in the much same vein as your water or light bill. With this portion of the network increasingly becoming the lynchpin to performing day-to-day operations bankers are focusing on improving their understanding of this network segment and the many options the market provides.

Better understanding the basics of Datacom technology empowers you to make better choices for your financial institution and potentially see gains in performance, price, or both. To kick off this education, we would like to start with the most common question that bankers ask about data communications: “Help me understand what today’s telecom technology is and where the trends are going.” To answer this request, we will briefly describe how the industry has evolved over the past few years, and we will touch on the different types of circuits available for banks and credit unions.

T1’s = Tried and True (but a Little Dated)

T1s dominated the bank WAN market for nearly a decade before newer options starting become more prevalent over the past few years. Often, T1’s were the only available option in more rural areas, so institutions in these areas made due with slower speeds or higher costs for their WAN links. Despite their widespread use, T1’s provided only modest speeds, but carriers could bond multiple T1 circuits to achieve up to 10 Mbps. T1’s were an established technology, but soon became outdated with the emergence of cable modem and Ethernet fiber access, which often offered 10x the speed at a greatly reduced cost.

What Drove WAN Access Technology? Need for Speed

Banking applications became more robust, feature-rich, and data hungry, driving ever-increasing WAN speed requirements. Additionally, new cloud-based applications depend upon fast and reliable data exchange. User experience for these applications is highly contingent upon WAN speed and quality. Fast, reliable networks act as the underlying infrastructure required to deliver a satisfying user experience for today’s highly online and mobile banking consumers. In these cases the communications infrastructure is foundational, not unlike the steel girders underpinning a skyscraper. Choosing the appropriate technology for your WAN has become more important than ever, and T1’s are likely no longer the only game in town. Next, we will look at two more modern WAN technology solutions that might be available to your bank.

Today’s High Speed Options for Banks
Cable Modem vs. Ethernet Fiber

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Cable Modems (Coax)

Cable modem solutions currently dominate the small business market where businesses have a relatively small number of concurrent network users. Cable modems are a mass-consumed product, but can be a good fit for some bank WAN needs.

Use Cases:

  • Ideal for backup Internet connectivity (business continuity)
  • Good fit for locations with no fiber access or locations where fiber build-out costs are prohibitive
  • Often used for 5 users or less (micro-businesses, which is where cable modems dominate the market)

Pros

  • Cable Modems are the “Why Not?” product – they offer the most bang for your buck for download speed – 50 Mbps download for less than $200 per month? Why not?
  • Least expensive technology used for delivering high broadband speeds — up to 150 Mbps Down/20 Mbps Up
  • Asymmetrical by nature – a lot more download speed than upload speed
  • Designed for mass consumption, focused on downloading data

Cons

  • Do not present Service Level Availability (SLAs) - Frequent outages are typical
  • Require an overlaying secure communication element, such as a VPN
  • When outages occur, cable modem companies are notorious for their lack of customer service
  • Not reliable enough transport for many emerging bank applications – which demand speed + high SLA levels
  • Cable modem networks are copper-based, and have all the problems associated with degradation of this physical medium over time
  • Cable modem networks are shared and oversubscribed by nature and often will not consistently, if ever, produce the download/upload speeds advertised
  • Cable companies don’t compete against each other – Their footprints don’t overlap – cable company choice is dictated by where your bank is located and the provider in the area

Ethernet Fiber

Ethernet fiber is the new T1 for banks. Most banks consider it as the preferred option to satisfy their need for fast, reliable transport.

Use Cases:

  • Ideal for primary WAN connectivity (MPLS and Dedicated Internet Access)

Pros:

  • Will offer much higher SLA levels (great for emerging bank applications)
  • New physical fiber plant – not as many problems with new physical media
  • Private and dedicated - not oversubscribed
  • Speeds of up to 10 Gbps
  • Offer great flexibility and scalability – more bandwidth is a phone call away and only requires configuration changes
  • Fiber companies compete against each other – presenting multiple carrier options and competitive pricing

Cons:

  • More expensive than cable modems – you get what you pay for
  • Typical installation intervals are 90 days or more
  • Bank geographic location can limit options – fiber isn’t everywhere

Engineering Best Practice / Conclusion

Consider Ethernet fiber as the preferred access technology for your bank’s WAN. The fast, reliable transport offered by Ethernet fiber will provide the infrastructure necessary for a quality user experience for the emerging applications that will drive business-critical bank applications in the future. Fiber’s limiting factors may be cost and/or availability. While the cost per Mb may be cheaper than T1’s in some cases, this technology is not available at the lower connectivity speeds; therefore, upgrading to Ethernet Fiber may constitute an increase in the overall communications budget. Additionally, the geographic availability of fiber is rather unpredictable, although providers are installing fiber infrastructure at a torrid pace. T1’s and cable modems remain viable options if fiber isn’t a fit for or even available to your institution. As with any technology, to maximize your investment in your communication infrastructure, you need to have a plan of where your communication needs are going.

Don’t Go It Alone!

IT budgets are shrinking, and IT staff is focused on other priority projects. The right IT service provider for your institution should employ seasoned WAN and telecom engineers that will guide you throughout the process of designing a WAN strategy that meets your specific requirements. There are many choices for your communications infrastructure – partnering with a trusted technology service provider can ensure you get the right solution for your bank’s unique technology needs.




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