Introduction to LAN
LAN stands for Local Area Network. It is a network that connects computers and other devices within a limited geographical area such as a bank branch, office building, school, or home. In banking, LAN plays a very important role because all computers inside a branch are connected through LAN to share data, printers, servers, and internet.
A simple definition:
A LAN is a network that connects multiple computers and devices within a small geographical area to share information and resources.
Characteristics of LAN
LAN has the following important features:
- Covers small geographical area (within one building or campus).
- High data transfer speed (generally 100 Mbps to 1 Gbps or more).
- Low cost compared to WAN.
- Privately owned and managed.
- High security compared to wide area networks.
- Low latency (fast communication).
In banks, a LAN connects:
- Teller terminals
- Branch server
- ATM machine (internal network)
- Printers
- Biometric devices
- CCTV systems
Components of LAN
To understand LAN properly for exam, you must know its basic components.
1. Computers (Nodes)
Each computer connected to the LAN is called a node. In a bank branch, each employee’s desktop is a node.
2. Network Interface Card (NIC)
NIC is installed in every computer. It allows the computer to connect to the network. It has a unique MAC address (Media Access Control address).
3. Switch
A switch connects multiple devices in a LAN. It transfers data to the correct device using MAC address. It is more intelligent than a hub.
4. Hub (Old Technology)
Hub connects devices but sends data to all connected devices. It is not secure and is rarely used now.
5. Router
Router connects one network to another network. For example:
- Branch LAN to Head Office WAN
- LAN to Internet
6. Cables
- Twisted pair cables (most common – Ethernet cable)
- Fiber optic cables (used for high speed)
7. Wireless Access Point
Used in wireless LAN (Wi-Fi). It allows devices to connect without cable.
Types of LAN
LAN can be classified in different ways:
1. Wired LAN
Uses physical cables (Ethernet cables).
More secure and stable.
Used mostly in banks.
2. Wireless LAN (WLAN)
Uses Wi-Fi technology.
Flexible but slightly less secure than wired LAN.
3. Client-Server LAN
In this type:
- One central server controls the network.
- All computers (clients) request services from server.
This is most common in banking system.
4. Peer-to-Peer LAN
All computers are equal.
No central server.
Used in small networks.
LAN Topologies
Topology means the physical or logical arrangement of network devices.
1. Bus Topology
- All computers connected to a single main cable.
- Cheap but if main cable fails, entire network fails.
2. Star Topology (Most Common)
- All devices connected to a central switch or hub.
- If one cable fails, only one device is affected.
- Used in most bank branches.
3. Ring Topology
- Devices connected in circular form.
- Data travels in one direction.
- If one node fails, network may be affected.
4. Mesh Topology
- Each device connected to multiple devices.
- Very reliable but expensive.
- Used in high security networks.
Remember:
Star topology is most widely used in LAN.
Advantages of LAN
LAN provides many benefits, especially in banking:
- Resource sharing (printer, scanner, server)
- File sharing between employees
- Centralized data storage
- Easy backup
- Fast communication
- Reduced cost
- Better coordination
In banks, Core Banking System (CBS) runs through LAN at branch level.
Disadvantages of LAN
- Initial setup cost
- Need for maintenance
- Virus can spread quickly
- Server failure affects entire network
LAN vs MAN vs WAN
| Feature | LAN | MAN | WAN |
|---|---|---|---|
| Full Form | Local Area Network | Metropolitan Area Network | Wide Area Network |
| Coverage | Small area | City | Country/World |
| Speed | High | Medium | Lower than LAN |
| Cost | Low | Medium | High |
| Example | Bank Branch Network | City Cable Network | Internet |
In banking:
- Branch network = LAN
- Bank’s nationwide network = WAN
- Internet = WAN
LAN in Banking System
LAN is very important in banks. It is used for:
- Connecting teller counters
- Accessing Core Banking Server
- Printing passbooks
- Cheque clearing
- ATM monitoring
- CCTV surveillance
- Email communication
Without LAN, branch operations cannot function smoothly.
Security in LAN
Security concepts are important.
Security measures in LAN include:
- Firewall
- Antivirus
- Access control
- User authentication
- Encryption
- VLAN (Virtual LAN)
- Network monitoring
In banks, LAN is protected by:
- Strong passwords
- Biometric authentication
- Data encryption
Conclusion
LAN (Local Area Network) is the backbone of branch-level banking operations. It connects all systems within a limited area and ensures fast, secure, and reliable communication.