Submarine cables are the backbone of just about every communication network today. In fact, over 99% of all transoceanic data is sent via submarine cables – and current growth trends in internet traffic show no signs of letting up. When submarine cables were initially developed they were heralded as a technology miracle.
Today, with the growing dependence on constant connectivity, the reliability of subsea systems has never been more crucial. That’s especially true when it comes to industries that require high-bandwidth applications such as the financial sector. But why does this sector demand such bandwidth, how do subsea systems help, and why is network innovation required?
Customer expectations depend on resilient connections
Banking is a globalized industry – 24 hours a day, seven days a week, transactions are always taking place, and therefore always require support. People expect to be able to access their financial information by phone, email, online, via mobile apps – and even via the latest voice recognition services such as Amazon Echo or Apple Siri. Any disruption to that access can cause a range of frustrations and problems, from diminished customer loyalty through to – in the most extreme cases – regulatory penalties.
In fact, a recent McKinsey survey reports that Asia Pacific (APAC) banking customers prefer digital platforms for simple, routine actions such as checking their balance, peer-to-peer transfers, or bill payments, while still using the physical branch for transactions they consider complex. In addition, a recent survey of institutional investors across the APAC and Australia region found a general expectation that the use of artificial intelligence (AI) will become widespread in investment banking over the next two to five years.
Keeping up with these market pressures and customer demands are one of the biggest challenges the financial sector faces today. And meeting customer needs would not be possible without a robust, scalable and reliable underlying telecom network.
From bank to data center to customer and beyond, superior connections are a business-critical feature. This is even more important in APAC given that customers in the region are the most likely in the world to log-on to their bank via a mobile app according to App Annie, an app network and insights company.
Bandwidth demands strain existing networks
Financial services connections rely on the infrastructure of submarine networks. While satellites and terrestrial networks are the most visible networking cogs, the fact is, submarine cables carry the majority of global internet traffic between land masses, whether through connecting island nations or by sending data across oceans.
With growing internet traffic demand pressure to maintain bandwidth availability is felt keenly by all network providers. This, in turn, will make the role of subsea cables even more important. Because it is so intensive to lay new fiber, technology innovations are needed for existing networks to keep up with traffic demands.
Traditionally, submarine fiber cable has allowed for multiple 10G channels to be placed closely together as they travel along the fiber core. However, this approach has been stretched to the limits by today’s traffic-heavy habits such as video streaming and online gaming. Furthermore, as customers across sectors – including financial services – increasingly demand digital services, pressure on network providers to guarantee availability has inevitably increased.
That pressure calls for a technology-driven solution for submarine cable operators to support financial transactions’ increased, and fluctuating, traffic. Without the connectivity, it will be impossible to offer the services that customers demand.
Increase capacity of the same networks
Specific network solutions that address this demand take advantage of both the network fiber’s C-band, or ‘conventional band’ which runs multiple 10G channels, and the fiber’s L-band. Vendors with extensive L-band terrestrial network history and experience have taken their existing knowledge and real-world field experience, to adapt their Submarine Line Termination Equipment (SLTE) to support L-band in addition to C-band. Opening up L-band in the same optical fiber as C-band doubles the amount of information operators can support on a single submarine cable.
Ultimately, as the financial services sector across APAC moves toward digital disruption, the internet backbone of submarine networks will house the traffic to make it happen. As networks are already stretched to their limit, L-band capabilities are a key innovation for keeping up with the demand for digital services in this region.
Rick Seeto is vice president and general manager of APJ at Ciena