Technology News

Financial institutions can save over 50 per cent on networking operational costs

Financial institutions can achieve over 50 percent of TCO by moving away from do-it-yourself (DIY) network infrastructures and using shared managed extranet services, according to a newly-published whitepaper from an independent research firm that has been sponsored by BT. The research found that in the first year of implementation financial institutions can realise TCO savings of 51 percent, with year-on-year savings thereafter of 52 percent.

In the aftermath of the financial crisis, though many IT projects and investments have been brought to a standstill by the economic downturn, the appetite for technology investment amongst the financial community is still stronger than any other sector, with 36 percent of financial institutions spending money on faster, more reliable network technology to survive the recession (findings from a 'Road to Recovery' research report by BT Global Services published November 2009).

Yankee Group's research shows how the use of shared managed extranet services such as the BT Radianz Shared Market Infrastructure can help users stay ahead of technology obsolescence, speed up time-to-market, enhance risk management controls and network resilience while significantly reducing TCO.

Agatha Poon, Senior Analyst, Yankee Group, said, "As CIOs come to terms with rapid equipment depreciation, system supportability and surging maintenance costs, the time is ripe to evaluate various technology deployment models. CIOs must now turn to solutions that will scale with growth and enable business agility for performance at lower cost."

Using a notional New York-based financial services firm connected to a number of financial application services from the front office to the back office, the whitepaper shows that over a three-year period the annual TCO of a relatively small DIY network infrastructure could be brought down from over $1 million to nearer $500,000 using the BT Radianz Shared Market Infrastructure.

The TCO model developed by Yankee Group for the research project includes all management costs, equipment charges, maintenance fees, resilient connectivity and other related charges such as service-level agreements (SLAs) and reporting, allowing a true and complete comparison between a DIY approach and a shared managed extranet service such as the BT Radianz Shared Market Infrastructure.

Andy Nicholson, Vice Present Global Banking & Financial Markets, BT, said, "Across the front, middle and back office, CTOs and CIOs are looking for ways to create leaner, increasingly cost-efficient infrastructures without compromising their business models - in the electronic trading space, for example, network demands for bandwidth, reliability and security continue to escalate.