By Alissa Lovens
To grow successfully, the wealth management industry has historically relied on word-of-mouth and long-standing client relationships built from intimate face-to-face interactions. In today’s fast-changing digital world, financial advisors must compete not only with their competitors, but also against the vast amounts of information and investing options available to customers on the internet.
Financial advisors must overcome this challenge to embrace digital transformation in their practices while maintaining the high-touch relationships they depend on.
Financial companies strive for closer and more frequent contact with their clients and prospects and can only do so by being flexible in how and where they can interact. Technologically, wealth managers and financial advisors need the ability to securely connect to customers through all channels and across all geographies.
With such wide-ranging requirements, how can a wealth management company leverage technology to build a foundation that’s fast, secure and global?
Simplify Network Complexity with SD-WAN
In the historical model, financial advisors erected physical branch locations in remote areas to provide services to more customers. In the digital age, the question centers around how to efficiently connect these locations to provide the best experience for all customers, anywhere. SD-WAN, a specific application of software-defined networking technology applied to WAN connections, enables both network integration and centralized control. It improves network flexibility by enabling fast turn-up of new branch sites, and it does so at a cost-effective price; it eliminates the need for expensive private connections to each location. By using software instead of costly hardware, wealth managers can link scattered branch locations to the company’s private corporate network, at scale.
SD-WAN also allows financial firms to prioritize critical applications—think of viewing or updating a customer account over other traffic, like music streaming or live video—to ensure the highest levels of customer service in every branch location. SD-WAN technology enables anyone (a telecommuter, headquarters employee or remote branch customer) to access the same corporate network securely, all while delivering the best experience for the customer or prospect.
Research suggests failure to implement an SD-WAN solution in the financial services industry results in a competitive disadvantage. Between 2017 and 2025, the SD-WAN compound annual growth rate is projected to exceed 50 percent with a target market valuation above $34 billion. The banking, insurance and financial sectors will account for the bulk of this SD-WAN market share given the need to adapt their branch offices and customer service model to the “always on and ever available” digital world.
Move Applications to the Cloud to Reduce Operating Expenses
In addition to SD-WAN, leveraging a public cloud solution can help financial companies address the growing need for access to applications from anywhere at any time.
We are seeing a rise in adoption of cloud-based applications as financial firms become more confident in, and aware of, the security and benefits of the cloud. A cloud or hybrid-cloud strategy enables a firm to gravitate from a capital expense model, with its heavy emphasis on costly physical infrastructures, like data centers and servers, to a more flexible and inexpensive operating expense approach. A recent Gartner survey of senior finance executives found that 36 percent of financial enterprises will use the cloud to support more than half of their transactional systems of record by 2020.
Note that SD-WAN and cloud solutions can also work together: The former supports the latter by smartly routing data traffic to critical cloud-based applications. For example, the SD-WAN can be programmed to automatically prioritize the best available user path to the cloud, significantly improving load times or latency compared to a network administrator manually performing that task.
However, according to Gartner analysts, both SD-WAN and cloud solutions remain too complex for many financial services’ IT decision-makers. To stay ahead of the digital transformation, you must learn how implementing either or both of these technologies will propel your business ahead of the competition.
Leverage Technology to Reap Its Benefits
Financial advisors and wealth managers can derive many benefits by implementing SD-WAN and cloud-based solutions. Among others, here are the three top reasons.
- Cost savings: When financial firms leverage SD-WAN or cloud-based applications, data center operations can be outsourced or consolidated, thus reducing expensive capital expenses, such as space, power and equipment. SD-WAN allows firms to “bring your own access” with local internet or broadband providers instead of private, high-bandwidth network connections that can be costly to some remote locations. Plus, financial firms can spread service costs over time on a per-use basis instead of paying upfront for space and equipment that much of the time is underutilized. With a public cloud provider, economies of scale can be leveraged to improve cost efficiency and reduce network administration.
- Improved user experience: With both solutions leveraging geographically diverse data centers and infrastructure, network availability increases while latency or application response time decreases.
Applications must be up and running when customers want to access them, whether in person with an advisor, through a mobile app or at their desktop or laptop computer. SD-WAN increases availability, security and failover options in a firm’s network. This allows for improved business continuity planning so a fiber cut or outage in one region won’t take down the entire network. - Enhanced security: Walk into any financial branch office and note that many advisors are now using tablets or mobile devices to conduct business. Customers access their accounts the same way and from wherever they happen to be at the time. To meet this mobile culture, SD-WAN offers protection from distributed denial-of-service attacks on a financial firm’s wireless and broadband network to ensure the highest levels of security across the entire corporate network.
Private, dedicated connectivity to a public cloud provider reduces many of the performance and security concerns associated with public internet environments. Data transfer happens securely without exposure to service attacks and network hijackings. Public internet congestion, with its slow response times and possible data losses, are also avoided. Enhanced network reliability, lowered infrastructure costs and increased bandwidth capacity accompany this solution.
Technological advances have sparked a digital transformation in the financial services sector. Advisors, professionals and IT decision-makers in the industry can no longer afford to ignore network improvements and security requirements; their long-term viability depends on it. So, now’s the time to take a look at SD-WAN and public cloud solutions to continue providing best-in-class service for the future generation.
Alissa Lovens leads Zayo Group’s global marketing strategy for the company’s finance and professional services sector. Alissa comes to Zayo with more than seven years of experience in the financial services industry.
