* Federal law called Check 21 could force banks to upgrade
A federal law could force banks and other financial institutions to accelerate application traffic over their WAN links. And that could create an opportunity for traffic management vendors.
Check 21, which became effective last week, is a law designed to enable banks to handle more checks electronically to make check processing faster and more efficient. Today banks physically move paper checks from the banks in which they are deposited to the banks at which they will be paid. The transfer can be time-consuming and costly.
As part of being Check 21-compliant, a bank must be able to send and receive messages; deal with exceptions that occur in the process; send and receive checks; and return check images back to customers. These steps could require network and bandwidth resources that some smaller financial institutions or regional banks lack.
According to acceleration vendor Expand Networks, small to medium-size banks with slow connections will require a significant increase in the strength of their WANs, due to the high number of image replacement documents, which could congest a WAN pipe and cause slow applications and delays in customer service.
With each image file consuming 12K bit/sec or more of bandwidth, Check 21 requirements could cause service delivery problems for banks working to transfer imaging applications.
“The IRDs, image-replacement documents, which banks will send across the network are much larger than the typical data files; slow networked banks will need to make the WAN more reliable to amplify the performance of applications,” says Pedro Colaço, vice president of marketing at Expand Networks.
Expand, along with competitors such as Peribit, Packeteer and Riverbed, could capitalize on the law, which would force banks to electronically transfer more data over their WAN links.
