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The Evolution of VoIP

As Voice over Internet Protocol technology matures, banks increasingly are adopting VoIP solutions to cut costs, improve efficiency and enhance customer service.

First Century estimates that the conversion will pay for itself in three years, largely as a result of canceling its PBX lease and teleconferencing service. According to Farmer, one of the big savings comes from employee moves, adds and changes. "It's a pretty big savings for us," he says. For one thing, the bank no longer has to schedule a work order and pay a technician to reprogram lines, which could cost $70 an hour or more, Farmer explains. Now, when employees switch offices, they simply plug their phones into an outlet and they are linked into the data network instantly. Their calls are routed to the phone at their new location and no IT intervention is necessary.

Farmer says VoIP technology also makes employees more efficient. They don't have to fumble through phone books looking for internal phone numbers, as the company directory is available through the phone, and everyone operates on a single area code. Phones display callers' numbers and users only have to dial a four-digit extension to reach colleagues. Additionally, it's easier to send voice mail blasts to employees, and tellers can access current rate sheets for products such as loans and mortgages on their phones' displays.

Bank 10's Delphia points out that VoIP also improves customer service. If a customer calls a branch looking for an employee who's in another branch, the call simply can be transferred - the caller doesn't have to hang up and dial a different number, he notes.

Busy Signals

Though banks can benefit from VoIP deployments, there still are obstacles to adoption, notes Frederic Veron, managing director at BearingPoint, a New York-based consulting firm. "There's a fear of change," he says. "It's a new way of doing things, and some firms are slower to adapt to change."

Bank 10's Delphia relates that staff "had to learn different ways of doing things." That meant providing training sessions on how the new phone system worked. It was a learning process, he continues, but, "As we started adding other banks, it went smoother as it went on."

Existing telecom agreements also slow adoption, according to Cisco's Bright. Many banks have long-term contracts with telcos for their PBX systems, he explains. "Many of them have [VoIP] in their plans but aren't ready to execute until those contracts get closer to term."

When it comes to rolling out the technology, First Century's Farmer advises banks to "make sure the quality of service is there." Test and tinker with the solutions until you find the right one, he suggests.

Delphia agrees, noting that VoIP "is not something that you plug in and it works right away - it's something you have to go in and tweak and work with."

Going forward, the application possibilities for converged data and voice systems could turn VoIP-based phones into computers of sorts. Farmer says First Century is eyeing the use of XML (extensible markup language) directly on IP-based phones to access core customer IDs, for example, which staff then could use to build a closer relationship with clients.

And, "You're going to see a lot of video adoption," Cisco's Bright adds. "Once you're up and running with VoIP and everything is established and people are comfortable with how it works ... the next natural step is to move from voice to voice plus video," he says.



Fighting Back Against Threats to Voice Over IP

As voice over IP services grow in popularity, the potential for viruses, worms and other security threats aimed at the technology also will grow. A group of security and networking vendors, research universities and a government agency has formed the VoIP Security Alliance ( to uncover and fight those security risks.

"VoIP inherits the traditional cyberthreats that data networks face today, and it faces additional threats because of the nature of voice communications," says VoIP Security Alliance chairman David Endler, who is the director of digital vaccine at TippingPoint Technologies, the security arm of networking vendor 3Com Corp. "In the next year or two we will see more VoIP-specific attacks."

The group intends to provide free testing tools and testing methodologies, list best VoIP security practices for service providers and businesses, and set up a Web site and mailing lists to keep members and other interested parties up to date on VoIP security developments.

Other charter members include Alcatel, Enterasys, the National Institute of Standards and Technology, Southern Methodist University and Symantec.

-Paul Travis, InformationWeek

Courtesy of InformationWeek.

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