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Opportunity Issue 104

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Opportunity magazine is a niche business-to-business publication that explores various investment opportunities within Southern Africa’s economic sectors. The publication is endorsed by the South African Chamber of Commerce and Industry (SACCI).

Banks find new growth in

Banks find new growth in next generation networks Kevin Odudoh, Executive Head of BFSI Sector at Vodacom Business, outlines what to expect when migrating from MPLS to SD-WAN. If you are a large bank with multiple points of presence across the country, continent or even globally, you need to be able to leverage the best technologies available to remain agile, competitive and future fit. In addition, an increasing number of employees are choosing to work remotely, and more BFSI (Banking, Financial Services and Insurance) customers are opting for digital channels, putting pressure on BFSI organisations to move their internal and customer-facing applications to the cloud. This increases the demand on networks to deliver reliable and secure services from anywhere, using any available transport medium, whether it’s dedicated leased lines, open Internet or GSM-based access services like 4G and 5G. However, many BFSI organisations are still running pure Multiprotocol Label Switching (MPLS) technology to connect their branches, offices and data centres, which is also proving too costly. The solution One of the ways to modernise your network is by leveraging a Software Defined Wide Area Network (SD-WAN). According to Gartner, “Vodafone identified as a Leader in the 2022 Gartner Magic Quadrant for Network Services, Global”: • By 2025, 65% of enterprises will have implemented SD-WANs, compared with approximately 45% in 2021. • By 2025, 40% of all enterprise locations will use Internet access as their only WAN transport, compared with less than 20% in 2021. Kevin Odudoh, Executive Head of BFSI Sector at Vodacom Business, has an MBA in Global Business, Entrepreneurship and Innovation from IE Business School, Madrid, and a BSc Degree in Mathematics and Statistics from the University of Nairobi. Prior to joining Vodacom Business, he worked in national, regional and global sales leadership roles, most recently as Global Account Manager, responsible for the global business relationship between Vodafone Business and the largest financial-services clients in Africa and the Middle East. Migrating to a SD-WAN, a next generation network, which is the backbone for many of today's most important technologies, can help BFSI organisations to use the Cloud more effectively, manage businesscritical traffic more efficiently across a network and enhance cybersecurity all the way from the end users and clients to the cloud. “Choosing the right SD-WAN technology is critical when transitioning from a pure MPLS network. Factors to consider include your cloud strategy, business applications, geographic presence, employee profiles and customer experience,” says Kevin. “Data and Security are also key considerations, because how you collect and leverage data, and which security processes and tools you have or are willing to invest in, will influence the SD-WAN technology you choose,” he adds.

SD-WAN TECHNOLOGY _________________ Migrating from MPLS to SD-WAN is becoming a no-brainer ________________ Deployment and transition Any transformation project has inherent risks. “Scope, cost and time are constraints that need to be carefully understood and managed to ensure quality delivery. Usually, a controlled pilot can help to identify risks and mitigation plans, and even assist in choosing between technology alternatives before a scaled roll-out,” says Kevin. “From experience, however, this is the easier part. Often, the hard part is ensuring seamless contracting and transition between service providers. This is especially true if there are several supplier contracts across the networking stack, including routers, switches, firewall and access links across multiple territories. To ensure speed to value with minimal scope creep, choosing the right provider with experience in delivering large-scale network-transformation projects is key,” explains Kevin. Juggling a multitude of regional contracts is common in multinational banks with global operations, where each country invariably has its own budgetary constraints, challenges and demands. The one commonality is that a multinational's head office often desires to source a service (like SD-WAN) from a single supplier and be able to provide the same user experience across all its branches. “For highly dispersed multinational banks, SD-WAN is ideal, affording a single view across the entirety of their network,” adds Kevin. The benefits By opting for one service provider, customers benefit from volume pricing. Furthermore – and crucial for banks with a large physical footprint – they can have the reassurance that comes from working with a Tier 1 operator. Vodacom was the first service provider in Africa to achieve the prestigious MEF 3.0 SD-WAN certification, which confirms that its services comply with the highest industry standards for performance, assurance and agility. Legacy networks “work” so to speak but are not optimised for future-ready businesses. One of the best features of an SD- WAN deployment is the fact that it uses any existing broadband infrastructure and does not require the ripping and replacement of legacy systems. The rationale for migrating to next-generation networks is as clear as it is compelling – SD-WAN networks are a significantly better fit strategically for Cloud services, IoT, digital twins and unified communications. It is particularly relevant for well-established global banks who were traditionally bound to an expensive legacy access infrastructure for their wide area networks. In contrast, nextgeneration SD-WAN networks open them up to utilising low-cost Internet connectivity. Disruption to business continuity need not be a concern. Banks can have a hybrid setup, maintaining some of their legacy MPLS wide-area networks, while moving branches individually to SD-WAN. Depending on their transformation roadmap, banks could adopt a phase-in phase-out approach, running a hybrid network with legacy MPLS VPN in some branches and SD-WAN in others, and then migrate those branches that are still on the legacy networks over time. Futureproofed for the digital era Beyond modernising their infrastructure and availing themselves of the cutting-edge technology, the underlying reason behind migrating from legacy networks to a Software Defined Network is that it affords BFSI organisations greater agility and the ability to open up new revenue streams. In recent years, banks have been pressured to diversify their offerings to remain competitive in response to mobile players like Apple and Google moving into banking and fintechs such as Chime capturing market share. However, for a bank to expand into other verticals without jeopardising its core business requires a greater degree of agility, which is ultimately what next-generation networks offer. For banks, time is of the essence. In 2021, the EY NextWave Global Consumer Banking Survey urged incumbent banks around the world to “act with urgency to protect their advantages, which are under direct attack by these new providers.“ It added that banks must also “build new business models capable of satisfying today’s consumer needs and evolve and scale to meet future needs and market developments.“ This is exactly what Vodacom Business can enable for banks today. By migrating to SD-WAN, banks are future-proofed and ideally positioned to take advantage of a nimble network. They can use big data, along with machine learning and artificial intelligence, to refine their processes and better cater to their customers' needs and thus remain relevant. | 3

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