Skip to content
All about finance. — All about business.

Financial sector grapples with outdated infrastructure, highlighting the immediate necessity for modernization

Financial Sector Faces Challenges with Outdated Network Infrastructure - 1&1 Versatel GmbH's findings revealed

,   and  Administrator
3 min read
Financial Services Sector Faces Challenges Due to Outdated Infrastructure - Immediate Upgrade...
Financial Services Sector Faces Challenges Due to Outdated Infrastructure - Immediate Upgrade Necessary

Financial sector grapples with outdated infrastructure, highlighting the immediate necessity for modernization

The financial sector, with its sensitive data and real-time transactions, requires stable and high-performing networks. A recent study by techconsult, 1&1 Versatel, and LANCOM Systems, titled "Future-Proof Networks for Business," has identified key challenges and solutions for modernizing outdated WAN architectures in the industry.

Challenges

The study highlights several challenges faced by financial institutions in updating their WAN infrastructure:

  1. Legacy Infrastructure and Integration Issues: Financial institutions struggle to integrate legacy systems with modern SD-WAN solutions, hindering agility and cloud adoption.
  2. Security Vulnerabilities: Outdated WANs often have misconfigurations and lack embedded zero-trust frameworks, increasing risks of breaches.
  3. Skills Shortage: There is a lack of in-house expertise to deploy and manage advanced WAN technologies effectively.
  4. Complexity and Scalability: Legacy WANs are often inflexible, costly, and unable to scale efficiently to support cloud-native applications and remote workforce demands.
  5. Compliance Pressure: Financial entities must meet strict regulatory requirements (e.g., GDPR, PCI DSS), which legacy WANs struggle to support without compromising innovation.

Solutions

The study proposes several solutions to overcome these challenges:

  1. Adoption of SD-WAN: Financial firms are modernizing WANs with SD-WAN, which offers scalable, flexible, and cloud-friendly network architectures that integrate security tightly.
  2. Embedding Zero-Trust Security: Incorporating zero-trust principles into WAN edges to mitigate cybersecurity risks.
  3. Managed and Professional Services: Leveraging vendor-managed solutions and expert support accelerates deployment and improves operational reliability.
  4. AI and Automation: Utilizing AI-driven traffic analytics and GenAI-powered tools enables dynamic routing optimization, predictive congestion management, and streamlined configuration.
  5. Consolidation of Network and Security Functions: Unified platforms (e.g., Fortinet Secure SD-WAN) reduce complexity while improving network performance and security compliance.
  6. Cloud-Native and Edge Integration: Modern WAN architectures support private 5G, edge computing, and pervasive cloud access to meet modern application needs.

Supporting Examples

The study provides examples of successful modernization efforts, such as Hanmi Bank’s infrastructure modernization with Lumen, demonstrating cost savings, better speed, and enhanced scalability using SD-WAN and managed services while maintaining stable, diversified network delivery. Zscaler’s Zero Trust Exchange platform offers a cloud-native security solution to replace legacy VPNs and MPLS, enabling secure cloud adoption without disrupting business-critical legacy systems.

The Shift Towards SD-WAN

The study underscores a strategic shift from static, legacy WANs towards intelligent, secure, and AI-driven SD-WAN architectures tailored to the financial sector’s unique demands for compliance, security, and digital transformation readiness. The Any-to-Any topology, which enables direct communication between all locations and is particularly suitable for real-time synchronization of financial data, is increasingly popular among financial institutions.

Hybrid approaches dominate the operation of SD-WAN in the financial sector, aiming to meet regulatory requirements and security standards. LANCOM Systems GmbH offers a comprehensive portfolio of secure, reliable, and future-proof network and security solutions for business and administration. 1&1 Versatel, a fiber specialist for business customers, is one of the leading telecommunications providers of data, internet, and voice services in Germany.

The study reveals that outdated technologies and the need for flexible remote workplaces are the biggest challenges for corporate networks in the financial sector. 57% of IT managers in finance face the challenge of modernizing outdated WAN technologies. The study found an average score of 2.71 on a scale of 1 = in-house operation to 5 = full managed service for hybrid approaches in the financial sector.

For more details, you can access the full study at this link. Frank Rosenberger, CEO of 1&1 Versatel, stated that modern network architectures are indispensable for successfully implementing digital business models in the financial sector.

[1] https://www.techconsult.de/studien/zukunftssichere-netzwerke-fuer-das-business/ [2] https://www.lancom-systems.com/en/ [3] https://www.1und1.de/unternehmen/ [4] https://www.lumen.com/ [5] https://www.zscaler.com/ [6] https://www.fortinet.com/products/secure-access-service-edge

  1. To address the challenges faced by the financial industry in adopting modern WAN architectures, such as legacy infrastructure issues and security vulnerabilities, the study recommends the adoption of SD-WAN combined with zero-trust security principles, managed services, and AI-driven automation.
  2. As financial institutions prioritize digital transformation and secure cloud adoption, they are increasingly turning to intelligent and AI-driven SD-WAN architectures, like Any-to-Any topologies, for their flexible, scalable, and compliant networking needs, in line with the strategic shift suggested by the study.

Read also:

    Related

    Latest