MPLS VPN Revamps ICBC R&D Network: Decentralization, Cost Savings, and Scalability

1. Network Optimization Effect

China Industrial and Commercial Bank (ICBC) Software Development Center, the bank’s largest direct unit, covers application development, new‑technology research, technical management, service support, production operations, and talent training. Recent network architecture optimization introduced MPLS VPN, marking a shift to a decentralized R&D network that lowers cost, improves efficiency, and empowers innovative development.

2. MPLS VPN Background

MPLS VPN combines the flexibility of IP routing with the simplicity of ATM label switching, adding a connection‑oriented control layer to a connectionless IP network. It builds a virtual private network over an ISP’s backbone, offering reliable performance, scalability, rich features, and enterprise‑grade security. It is ideal for inter‑connecting branch offices and excels in traffic engineering to resolve congestion.

The MPLS VPN service model consists of three components:

CE (Customer Edge): edge device that connects the user network to the provider, maintains private routes and passes them to the PE.

PE (Provider Edge): provider’s edge device that connects to CE and exchanges private routes.

P (Provider): backbone equipment that forwards labels.

The peer‑to‑peer model allows the provider to forward traffic between user sites without user‑level involvement, simplifying expansion and management; adding a new site only requires updating edge device configurations.

3. Network Optimization Pain Points

Since its establishment in 1996, the center has built a star‑topology network with a core hub in Zhuhai and edge sites in Shanghai, Chengdu, and Hangzhou. All inter‑site traffic traverses the Zhuhai core, leading to several issues:

Non‑optimal routing paths between development departments and data centers; optimal routing should be point‑to‑point, not via multiple unrelated regions.

Zhuhai hub creates a global single‑point‑of‑failure risk for the seven development units and two data centers.

Concentrated bandwidth pressure on the Zhuhai hub.

Scalability bottlenecks; adding new development units would repeat sub‑optimal paths and increase hub bandwidth load.

4. Network Optimization Practice

Starting in 2020, the center conducted industry research and technology validation, selecting MPLS VPN. After nearly two years of effort, the technology was deployed in early 2022, delivering the following benefits:

Decentralization: No single core node; any development unit’s network issue does not affect others.

Cost Reduction: Eliminated dedicated WAN links to data centers, leveraging intra‑city connections in Shanghai and Beijing for backup routes, improving speed and lowering operating expenses.

Optimal Paths: MPLS VPN creates virtual private channels with optimal routes across the provider’s backbone, removing the need for core‑node relays.

Scalability: New development units or sites can be integrated by simply publishing routing policies, without adding equipment or dedicated lines for existing sites.

5. Outlook

The center will continue to focus on fintech innovation, intensify research in information‑technology infrastructure, share results, and help all bank branches improve technology management and infrastructure robustness. Ongoing research, pilots, and promotion of valuable financial IT solutions will support the nation’s goal of an autonomous, digitally transformed financial system.