Why has SD-WAN adoption in the financial services lagged, and what’s changing?

Although SD-WAN use in other industries has grown exponentially in the past four years, the technology’s adoption among the banking and financial services (B&FS) industry has historically lagged. Despite the benefits of SD-WAN providing an easy way for enterprises to manage and optimise traffic across hybrid networks, several barriers have stood in the way for firms in the financial sector until recently.

  • Security

    The vast volumes of sensitive financial and personal data held by B&FS firms, and the consequences of compromising that data, mean that data security and compliance are paramount.

  • Regulation & compliance

    FS firms must contend with strict regulation of financial data, affecting where and how that data can be stored and transferred. Having control and confidence over that data is of critical importance.

  • Return on investment

    Because of the strict security requirements imposed on B&FS firms, additional investment into specialised security hardware was often required in adopting earlier SD WAN technologies, making business cases harder to justify.

  • Corporate trust

    Historically, confidence in SD-WAN amongst B&FS has been low, given previous reliance on dedicated infrastructure and equipment.

However, one defining trend is turning the tide – cloud adoption.

Applications and data moving to the cloud have accelerated in all industries post-pandemic, but particularly in B&FS, where firms have found that for cost saving, business continuity, agility, fintech growth and ESG progress, the move makes sense. A recent survey by Publicis Sapient showed that most retail and commercial banks aim to triple their cloud services by 2025 and migrate more client-facing applications and data to the cloud1.

Given the growing importance of cloud adoption, it makes sense that many B&FS firms are turning to SD WAN as the foundation of their network. SD WAN provides a way for firms to adapt to the complex challenges of migration to the cloud while presenting a cost-saving opportunity in the face of shrinking capex budgets.

To learn more about how the growth of cloud drives SD WAN adoption and why it makes sense for B&FS firms, you can download the whitepaper directly from our resources page.

  1. Publicis Sapient Future of cloud in Banking report. (Future of Cloud in Banking Report (publicissapient.com) – the statement is under introduction.

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