It is undeniable that banking is changing. Customers now are just as likely to initiate a transaction or check a balance from their smartphone or laptop as they are to do so at a physical branch, and banks currently are in the process of making the adjustment to this new landscape.
As we noted last week, branch banking is not going away. But it must evolve so it can synergize with newer, digital forms of bank interaction. A recent white paper by Alcatel-Lucent (News - Alert), The Brank Bank of the Future, suggests five ways that financial institutions can lay the foundation for bank branches that better harmonize with their online financial services. These include moving to a private cloud infrastructure, using an open private cloud framework, leveraging a software-defined WAN, building out a private WAN backbone, and better taking advantage of data center interconnect (DCI).
The move to a private cloud infrastructure is important for several reasons, according to Alcatel-Lucent. First, branches need to deliver better customer service via improved product offerings, and using a private cloud reduces time to market because services can be provisioned more quickly. It also helps create an omnichannel customer experience and lays the foundation for better data storage. From a regulatory perspective, it also enables improved data controls.
Moving branch banking to the future also requires an open private cloud framework.
“To drive their business forward and improve customer experience, banks need to be able to adopt a best-of- breed approach to communications technology,” noted the Alcatel-Lucent white paper. “Basically, this means that instead of being locked-in to one vendor’s solutions, they should be able to choose the best voice, video, collaboration or other communication function for their business.”
An open private cloud framework helps remove departmental silos, and both improve training through better collaboration and betters customer service by enabling branches to have all the information they need to best service customers. Branch and online banking are no longer separate.
A third adjustment banks need to make is adopting a software-defined WAN. A software-defined WAN reduces provisioning time and cuts down on errors since it no longer is a manual process. It also introduces flexibility and nimbleness, and lowers costs. A software-defined WAN can enable banks to set up temporary branches easily and also move beyond legacy systems that don’t integrate as easily with online financial services.
Similarly, bank branches of the future will deal with an increasingly large amount of data and will benefit from a private WAN backbone. A private backbone improves security, performance and both resiliency and reliability.
“A strong private WAN backbone can enable mission-critical IP networking services and meet the 99.999 percent reliability objectives that are a necessity for banks,” noted Alcatel-Lucent. “Business continuity can be maintained even in the case of a regional disaster by seamlessly switching among redundant WAN resources and paths.”
Finally, DCI will play an important role in branch banking of the future.
“DCI makes using this data easier by removing the requirement that the data be stored in the same place as the analytics tools, according to the Alcatel-Lucent paper, and source performance data can be consolidated from multiple data centers and then analyzed. The result is more powerful and flexible analytics.
These five adjustments can help bank branches adjust and stay relevant in the face of changing customer and large enterprise needs. The technology and a blueprint are out there. It just remains to be seen how long it will take for banks to fully understand the direction of things to come.
Edited by Kyle Piscioniere