The UK financial services industry is facing new initiatives in the online banking space with companies being forced to meet aggressive Internet-based transaction guidelines in early 2008. Michael Sandison, Client Director – Financial Services Corporate Accounts at THUS explains the implications Faster Payments will have on network infrastructures, and discusses ways in which banks can ensure they meet the stipulations of the initiative.
Bandwidth for online transactions
The Faster Payments scheme is due to come into force in May 2008 and will call for banks to introduce same-day clearing of Internet and telephone banking credits and standing orders. With transactions requiring immediate and automatic processing, completing almost in real-time, banks need to move towards a stable and reliable network infrastructure able to cope with such a demand on bandwidth resources.
As well as ensuring there is sufficient bandwidth for the necessary speed of service, banks must be able to handle inevitable surges in traffic, as large volumes of customers access online accounts simultaneously. Serving as a warning to the financial sector, Northern Rock recently experienced a collapse in their banking portal as negative media attention resulted in an unprecedented demand for its online services.
Data retention requirements
Placing further pressure on the industry is the arrival of the Markets in Financial Instruments Directive (MiFID), in force since 1 November 2007. This European legislation will allow companies to provide services across borders and establish branches in other European states. The directive is subsequently intended to unify and cement process for safe and reliable data management and storage in the sector.
THUS sees this as an additional driver for the adoption of greater bandwidth, as investment companies labour to deliver the required record retention. Indeed, both competitive and legislative demands have led to Gigabit Ethernet quickly becoming the default access technology across the industry.
As the UK’s first operator to have rolled-out a next-generation network (NGN), THUS is well placed to discuss the challenges facing UK banks today, as well as outlining ways in which IT provision can help the industry meet the current legislative requirements. Committed to servicing a wide range of financial customers, THUS has a dedicated and experienced team, specifically focussed on the financial services sector.