Network Innovation of the World’s Oldest Bank

Headquartered in Siena, Italy, Monte dei Paschi (MPS) bank was founded in 1472, boasting a history of over 500 years. As the oldest bank in the world, how can MPS maintain vitality in the new financial reform? The answer is building an application-oriented, reliable, and flexible network for the bank’s financial services.

Networks Become Strategic Assets of Banks in a Connected World

Businesses Are Still Constrained by Physically Isolated Intranet and Extranet in the Customer-Centric Era

MPS introduced a variety of financial information systems long ago to develop a multiservice, innovative business model. However, due to the bank’s strict network isolation requirements in the earlier phase, these information systems and data sources were deployed on the production and office networks. Emerging services and business models drive the production network to closely collaborate with the office network, thus blurring the border between the two networks. Transformation from an “account-centric” business model to a “customer-centric” business model demands a brand new network architecture that allows physical convergence. In addition, financial data and user information must be secured through logical isolation, and differentiated management must be provided for different services to ensure high network quality for high priority services.

Ubiquitous, High-Speed Access Is the Top Priority for Transforming Branch Services

In the new financial ear, business competition in the financial market is particularly fierce. The emergence of Internet finance has created a far-reaching impact on the market pattern and business models. Financial institutions have put forth a wide variety of services, such as Virtual Teller Machines (VTMs), unattended branches, and digital multimedia. These new services have been deployed or will be deployed by banks to build an omni-channel marketing service system.

Bandwidth demands the MPS bank’s of branches have been developing at a rate of 15 percent on a yearly basis. At some branches, old network devices and egress links must be replaced to support new bandwidth-consuming services. When new self-service branches need to be deployed in outer suburbs or a self-service branch needs to be relocated, deployment of fixed lines will take even 30 days. Consequently, flexible self-service branch deployment and rapid service provisioning cannot be implemented.

Ever-Growing Service Complexity and Poor Management Efficiency

The business transformation has resulted in complex changes in financial networks. Specifically, the numbers of branches and service types keep increasing, with multimedia services holding an increasing percentage among all types of services. How to manage a huge branch network while making it running stably, how to improve network utilization efficiency, and how to provide high quality services for business departments have become key network management issues of MPS.

Huawei Helps MPS Achieve a Significant Network Innovation

All-Around Reliability Design Ensures Service Continuity

Reliability is always the focus of banks and a top challenge to the IT Department of MPS. After deeply analyzing the business scale of each one of the bank’s branches, Huawei provided an end-to-end, flexible reliability design solution for MPS. Regarding off-premise, self-service branches and ATMs in which services are usually of only a few types, Huawei’s solution uses two uplinks with each uplink connecting to devices at different sites of a telecom carrier to provide link redundancy. Regarding small- and medium-sized branches, Huawei’s solution uses dual-host backup and virtualizes two routers into a single router which is dual-homed to different Provider Edge (PE) devices on a carrier’s Multiprotocol Label Switching (MPLS) network. With regard to 50 large branches, Huawei’s solution adopts MPLS Virtual Private Network (VPN) and E1 private lines on the basis of dual-host backup, transmitting key services through pipelines like the E1 private lines.

In addition, a huge volume of businesses is processed at a large branch. Customers come from different sectors, most of whom are VIP users. Therefore, network reliability is extremely important for MPS. Accordingly, key components such as power modules, fans, and main control boards must work in redundancy mode. In this manner, Huawei has delivered a top notch, full-scale reliability solution which achieves high reliability at multiple layers (hardware, link, network, and service layers) to the bank.

Physical Convergence and Logical Isolation for Intranet and Extranet Achieve Refined Traffic Scheduling Through HQoS

Network convergence is not simply combining the intranet and extranet as a single network. To converge the intranet and extranet, logical isolation of the two networks and quality requirements of different services must be taken into full consideration. Traditional Quality of Service (QoS) can only differentiate services but not users, and as a result cannot isolate the bank’s intranet from its extranet.

To help MPS address this problem, Huawei recommends Hierarchical Quality of Service (HQoS) for network isolation. First, Huawei’s solution identifies the bank’s network based on Layer 2 identifiers, and divides the entire network into virtual networks while differentiating the intranet from the extranet. Each virtual network has guaranteed bandwidth and can share the maximum bandwidth of physical interfaces. Additionally, each virtual network can perform QoS management independently from others to configure customized traffic scheduling policies for different services. For example, IP phone service traffic over the office network can be preferentially forwarded, and bandwidth can be guaranteed for multimedia marketing system and videoconferencing services. Specific services are differentiated on the basis of virtual network division, and hierarchical traffic scheduling enables refined QoS guarantee.

High-Performance Network Platform and Flexible Service Expansion

To build a brand new, ubiquitous, and high-speed network for MPS, Huawei leverages its AR G3 series access routers which use a multi-core, high-performance forwarding architecture and a low-latency network platform, meeting the bank’s service growth demands over the next three to five years. Huawei also recommended its AR3260 and AR2240 to adapt to multiservice and rapid traffic growth at large branches. SRUs of the AR3260 and AR2240 can be replaced in the future to improve the performance by over seven times, which maximizes the bank’s live network investment protection.

The decrease of entity marketing channels results in a sharp increase in the number of self-service branches. Huawei’s AR G3 Wireless Access Solution makes flexible deployment of self-service branches a reality. Self-service branches can flexibly connect to the bank’s headquarters data center through LTE/3G/2G networks. At new sites, one month of new service provisioning time is shortened to only one hour. The LTE network that features large bandwidth and low latency enables delivery of multimedia services such as VTMs. By leveraging a multi-APN solution, services of different priorities can be transmitted through different logical channels. In addition, network standards are adaptive so that a ubiquitous access platform is provided for MPS. This platform frees MPS from network constraints, helping the bank easily access the network anywhere, anytime, build self-service branches in any area, and quickly provision new services.

Awareness of Network Status and Service Details

Quality improvement of any service relies on precise measurements of the status of network and application performance. Taking advantage of the built-in Network Quality Analyzer (NQA) of Huawei’s AR G3 series routers, the IT Department of MPS can monitor the basic service performance, including connectivity, latency, and jitter, of over 3,000 small branches.

Regarding 50 large regional headquarters and branches, Huawei’s AR G3 series adopts NetStream, Huawei’s leading traffic statistics collection technology, to output traffic statistics compatible with Cisco’s NetFlow protocol. Based on flexible, detailed traffic statistics and analytics, the bank’s IT Department is able to detect bandwidth and network quality of key services, such as credit and loan, liquidation, voice, and video services. Moreover, the IT Department can easily monitor the service status and quickly locate faults through customized filtering and control of alarms on devices.

Shifting from a “Transaction Accounting-Centric” Business Model to a “Marketing Service-Centric” Business Model

MPS’ next-generation network platform has laid a solid foundation for construction of innovative branches. Now a large number of new services are being provisioned. The network platform supports the bank’s transformation from a “transaction accounting-centric” business model to a “marketing service-centric” business model, helping the bank build a brand new marketing service system throughout Italy.

In the near future, the bank’s branches will neither be subject to business hours nor need many account areas or product pamphlet shelves. Instead, the bank will be capable of offering all-weather, smart, self-help services in a 24/7 manner. Moreover, the bank will offer video interactions with remote customer service staff as well as various multimedia displays.