By Shannon Weyrick, VP research at NS1
When it comes to technology, the banking and finance community waits for someone else to make the first move. It’s one of the reasons why, despite being on every financial institution’s agenda, digital transformation has been so protracted. To be fair, there are serious challenges for an industry burdened by extensive regulations, and when it comes to finance, risk mitigation is often prioritised over technological advancement.
The delays in digital transformation also apply to the new generation internet protocol (IP) IPv6, which offers vastly improved performance, efficiency and increased security over the current generation IPv4, but is still too formidable a prospect for many.
Cisco has predicted that traffic on IPv6 would increase by 77% CAGR between 2017 and 2022, and the fact is that it is taking over from IPv4 by all other reasonable measures, including the number of users and the percentage of content. When IPv4 was introduced it had the capability of supporting 4.3 billion devices, and due to multiple factors, including the popularity of the cloud and 5G, that is no longer enough. Other industries are clearly taking note. As financial services organizations more aggressively take on digital transformation, now is the time to address the IPv6 conundrum.
The PwC Financial Services Technology 2020 and Beyond report stated that fintech trends, like peer-to-peer transactions, customer intelligence and cybersecurity defences rely on the rapid transmission and assimilation of data. It said today’s systems don’t have the scale or resilience that the future will require. If organisations are to have the flexibility that innovation requires, they will need to update their infrastructure to make it more agile and responsive.
This is why moving to IPv6 should be regarded as a critical component of the digital transformation projects that are currently underway in financial institutions.
High performance drives need for digital transformation
Today’s financial transactions rely on an internet that is fast, reliable and secure. Digital traffic crosses geographically distributed networks and is delivered through applications that people access using multiple devices while being protected by built-in authentication and privacy support. But the widespread nature of the internet causes latency that slows down the critical connections that customers demand from their online banking services. When it comes to customer experience, high performance and availability is everything and this is a key driver of digital transformation projects.
As digital transformation projects progress, organisations are considering cloud computing and looking at updating their current infrastructure, and as part of this planning, they also need to assess whether they will have the required internet address space. Relying on IPv4 up until now has been possible but delaying migration to IPv6 much longer will affect how financial organisations provision and deploy endpoint devices and applications.
Plan ahead for IPv6 migration
The reported complexities when it comes to integrating IPv6 almost always arise from a lack of planning. The best route to a successful deployment starts with detailed preparation by the network team in the organisation, and this includes allocating the hierarchical address structure for each part of the network, incorporating regions, data centres, and servers. Banks should think about the apps that their customers use, how they can support them and define the address space to make good use of traffic routing and policy definitions.
Assigning responsibility is essential and it certainly helps if the project has an advocate at the very top. Perhaps a CTO or CIO who is committed to seeing through the specification and implementation of IPv6, and who can evangelise its importance as part of the digital transformation plan. It will be down to them to propel the entire IT team through the various stages to make sure addressing mechanisms are clear.
One useful approach for IT teams to take when implementing IPv6 is to use foundational technologies like DNS, DHCP and IP Address Management (DDI). Removing complexity and making addressing as simple as possible should be a key goal, and these well-established solutions will help. DNS has its roots in connecting host names with the correct IP addresses, and has been significant for internet usability for years. IPAM and DHCP are responsible for organizing and provisioning IP addresses, key to administering DNS, and therefore critical for migration to IPv6. While host names will remain the same, websites will be transitioning to the new protocol and IPAM will mediate that process, tracking and managing address space and creating a smooth conversion to the new protocol.
Another option is to use software-defined DDI, which supports cloud-native infrastructure, allowing apps to be deployed near users, and will also support microservices environments. Greater performance and advanced internet and application traffic management are additional bonuses.
The tech teams should consider other tools too. Given that one of the deterrents to adopting IPv6 has been concerns for the network and security, there are significant advantages in using network management tools that establish the compatibility of applications and hardware and will help to alleviate infrastructure hurdles. Worries regarding security tend to be on whether servers will enable IPv6 by default while firewalls do not, so the use of tools designed to monitor security logs and configure firewalls will be vital to utilise during implementation.
It’s all too easy to ignore the looming problem of address space. The argument for the last twenty years has been that there is enough capacity to manage, but this is no longer the case. And the Covid pandemic raises the stakes because, as the world shifts to a digital-first approach, there will be more demand from customers for high performance, always-on, glitch free services. The finance industry needs to grasp the nettle and add IPv6 migration into its broader strategies around digital transformation. It cannot afford to be left behind.