FinTech Innovation: Banking Needs Better Networking




This article has been authored by Kurtis Lindqvist, Chief Marketing Officer, The London Internet Exchange (LINX)

A simpler and more efficient networking model can drive down costs and give the Financial Services community greater control over their networks

Too often networking is overlooked when developing digital strategies in the Financial Services sector. While new technologies like Artificial Intelligence (AI) and blockchain capture headlines, innovative networking models give financial institutions the ability to deliver new levels of user experience for their applications and services while gaining greater control over who they connect with.

While the FinTech hype-cycle will play out over and over with different technologies,
networking remains fundamental to innovation. New technologies are only as good as the networks that connect them.

The challenge is to find new ways to simplify networking and maximise its potential within an organisation, especially when CIOs are under pressure to innovate. 77% of Financial Institutions will increase internal efforts to innovate, according to PriceWaterHouse Coopers “Global FinTech Report”, while Internet traffic continues to show double digit growth across their networks.

They need a networking model that can deliver simplicity, efficiency, security and control.
One of the best ways to maximise the potential of networking in a Financial Institution is
through exchanging Internet traffic at an Internet exchange point. Organisations with large
and growing volumes of Internet traffic can connect directly to an ecosystem of potential
networks and choose what organisations they interconnect, or peer with, to deliver their
traffic.

To explain the concept, it is like booking 10 taxis to drop off 10 people at different
destinations compared to connecting to a central hub like Paddington station and securely dropping them all off at the same time. It is a classic ‘hub and spoke’ model that is making a big impact for Financial Service organisations as they adopt new applications and services. Peering is faster and more efficient than managing a range of networking relationships with the freedom to control who an organisation peers with and delivers their Internet traffic. Peering at a large exchange in London, Europe’s premier hub for Financial Services, gives organisations immediate access to new peering partners, increased choice and the ability to keep traffic local.

When peering, they can securely route their traffic via different routes and solve performance issues. This delivers greater redundancy and manages risk for the organisation rather than relying on a single provider to deliver their traffic.

As downtime or poor performance directly impacts an organisation’s bottom line, they can proactively manage their peering relationships to deliver consistency and reliability. This is essential when adopting new Cloud-based technologies where an optimised end user experience is critical.

Financial Services organisations can also benefit from faster connections when directly
exchanging traffic with a peering partner while reducing costs. By peering, they can freely
exchange traffic with partners, saving time and budget, which can be reinvested into other projects.

In this way, the larger the peering ecosystem the better. For example, the London Internet
Exchange (LINX) has over 880 networks from 80 different countries connected. It offers
peering partners a diverse and growing number of peering options. Over the last few years, LINX has seen an increase in members from Financial organisations joining. Financial Services organisations that choose to peer in London gain all of the cost benefits but they also benefit from a model that is built to support their digital strategies. They should explore peering as a way to support their digital futures and incorporate it into their planning processes.

Quality, performance and user experience are all essential to successfully adopting and
optimising new technologies and services. Peering is a simple thing that can support the
success of new initiatives and help to deliver greater FinTech innovation in an organisation. Financial Services organisations should reach out to peering exchanges and understand how easy it is to get started and see the results of peering. Growth in Cloud, real-time Collaboration tools, AI and blockchain will only increase traffic volumes and the organisations that adopt innovative networking models will be ready for an even more dynamic future in Financial Services. A conversation with an organisation like the London Internet Exchange is the first step to enabling innovation with better networking.

For more information on The London Internet Exchange please click here

 

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