While competition among South Africa’s four leading banks is fierce, FNB has successfully managed to keep bank charges down while offering improved services and unmatched connectivity—keeping it ahead of the game. Its success strategy has involved a partnership with DFA, owner of South Africa’s largest open-access high speed fibre network.
Future proofing the network
Access to high speed fibre connectivity was a fairly new concept for the local market in 2007, and there were a limited number of providers able to meet FNB’s needs. To overcome this issue the bank registered as an ISP and acquired an Electronic Communications Network Service (ECNS) license, which allowed it to establish its own fibre network.
The bank then partnered with DFA to leverage its fibre infrastructure to connect its major campuses in the Johannesburg CBD, Selby, Randburg, Sandton and Fairlands via a high-speed network. On the back of this successful initiative, FNB expanded its fibre connectivity to its data recovery site in Pretoria.
With the partnership having expanded its extensive fibre network, FNB now has 10 times more bandwidth available and reduced its telecommunications bill significantly. These cost savings have been passed on to its customers, who are experiencing significant benefits typically unheard of in the banking arena.
The initial investment in the fibre network was substantial, but the bank has, over the past six years, seen significant cost saving benefits. According to Andy Boden, senior network architect at Connect First Telecoms (Pty) Ltd, FNB’s network arm, “It was cheaper for us to light up our own fibre network using DFA’s open access fibre and infrastructure, than to continue using the existing telecommunications model we had relied on to deliver bandwidth and make phone calls.”
The bank was able to see significant savings as part of its switch to a high-speed fibre network, and used this to fund the second phase of its fibre network. The bank has already started to connect every single branch via its fibre network in an effort to further reduce its costs and improve its customer service offering.
The fibre advantage
Over the years the bank has increased its bandwidth from two 1Gbps lines to four 10Gbps links. This gave it a significant connectivity boost, improving its service offering to clients. By partnering with DFA, FNB enjoys 99.98% uptime just on the passive network alone.
By using a fibre network, FNB has reduced its latency, which typically impacts on the speed of the service delivered to the customer. This is particularly true for ATM transactions that need to be written and queried across various databases before money is released to the consumer. For this purpose, the bank relies primarily on fibre connectivity with a satellite backup, which results in a latency of 600 milliseconds for a satellite based connection, compared to the 20 milliseconds offered by fibre.
With the low latency of its fibre and because it is a registered ISP, FNB managed to negotiate deals with other ISPs and telecommunications providers, eliminating the need for a traditional voice service. The bank now relies on Voice Over IP (VoIP) for all calls leaving its network, while its agreements with the mobile telecommunications providers allows for reduced interconnection fees, which brings down the cost of its outgoing calls.
Freedom to innovate
The bank believes that the more it can offer its customers outside of traditional banking services, the more value they bring to their lives. In addition, giving customers free bandwidth coupled with award-winning apps and online banking solutions makes banking with FNB simple and affordable and ultimately improves the customer’s overall banking experience.
According to Boden, “The desire to roll out fibre-based broadband connectivity across the entire business was dreamed up over eight years ago. At the time DFA was a small company that believed in our vision and worked with us to bring it to fruition. Today FNB is winning local and global awards, and it is primarily based on the technology solutions that we have developed, while the investment we have made into our own fibre network enables us to deliver our innovations seamlessly.”
Driven by the desire to improve its customer service, FNB has invested in its fibre network to bring more value to its customers. It is on the back of this successful venture that the bank is able to continue innovating and offering better services and more appealing offerings over and above the standard. It is an investment that keeps it a step ahead of the competition.
