The banking industry has changed. Today’s retail banks are actually in the customer service industry. This is due to the fact that there is very little differentiation in product offerings from one bank to another. A checking account, CD, and other account offerings are very similar from one retail bank to another. Banks instead strive to deliver the best experience possible for their customers to set themselves apart from the competition.
As a result of digital transformation, banks must ‘always be on,’ so customers can access their money anytime, anywhere. Any unexpected network downtime can be extremely costly not just for the branch location, but creating lasting implications for the organization as a whole.
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Any system outage or unplanned downtime can have costly impacts on your business, but when that outage is your network, the costs can be enormous. Network downtime is now costing over $7,900 per minute. Regardless of the size of your organization, an unnecessary $475,000 for an hour of downtime is a cost you don’t want to incur. This is just an average. The larger the organization, the higher the cost any downtime will be.
So why is the cost of network downtime for banks so high? Let’s explore some reasons.
Any time access
It all goes back to the fact that retail banks are actually in the customer service industry. When customers are unable to access their money, whether an online banking account, mobile app, ATM, or even at a branch, they’re going to be upset and be less likely to trust you in the future. Loss of trust due to the lack of access to their money means that customers are more likely to look at other banking options when it comes time to opening a new account, looking for a loan, etc. This all leads to lost revenue for the bank, based on fewer banking products being sold.
Brand reputation is another factor playing into the high cost of downtime in the banking industry. Retail banks like HSBC, Wells Fargo, and TD Bank are some of the most recognizable brands in the consumer market. And you know what else they all have in common? In 2018 they all were victims of highly publicized cyber attacks which led to network downtime and lack of access to banking platforms. Any time a company is in the news for being the victim of a cyberattack, it creates a PR nightmare, causing damage to the brand’s reputation and likely lost shareholder value.
Large, Disparate Networks
Retail banks have large networks due to the geographic distance between different branch locations and the core data center. Banks often rely on IP/MPLS networks to connect branch locations to the data center, with significant branches aggregating traffic from smaller, less significant branches. This can make it difficult to pinpoint where an attack or network issue occurs. Smaller branch locations are also less likely to have the latest security tools and updates than the data center, which makes them more likely to be the source of the network issue. Lack of visibility into these individual networks at the branch locations makes it hard to troubleshoot and resolve issues that caused the network downtime.
It’s often the intangible costs associated with network downtime that are most costly, damage to the brand, lost productivity, and any resulting changes in the business can be hard to calculate. But the first step towards avoiding network downtime starts with building a resilient network with bypass, failsafe technology, and redundancy to ensure your inline security tools are effectively protecting your network.