"A VPN is a generic term that describes any combination of technologies that can be used to secure a connection through an otherwise unsecured or untrusted network."

Virtual private network (VPN) is a network that uses a public telecommunication infrastructure, such as the Internet, to provide remote offices or individual users with secure access to their organization's network. A virtual private network can be contrasted with an expensive system of owned or leased lines that can only be used by one organization.

A VPN enables you to send data between two computers across a shared or public inter network in a manner that emulates the properties of a point-to-point private link. The act of configuring and creating a virtual private network is known as virtual private networking.

Packets that are intercepted on the shared or public network are indecipherable without the encryption keys. The portion of the connection in which the private data is encapsulated is known as the tunnel. The portion of the connection in which the private data is encrypted is known as the virtual private network (VPN) connection.

Two kinds of Virtual Private Networking in banking:

• Site to site VPN

• Remote Access VPN

Let's talk about it in detail a little later. VPNs provide a more active form of security by either encrypting or encapsulating data for transmission through an unsecured network. These two types of security-encryption and encapsulation form the foundation of virtual private networking. However, both encryption and encapsulation are generic terms that describe a function that can be performed by a myriad of specific technologies. To add to the confusion, these two sets of technologies can be combined in different implementation topologies. Thus, VPNs can vary widely from vendor to vendor.

You can opt for two types of VPN, Remote access vpn and site to site vpn. In case of a remote access vpn, their staff is regularly working in locations outside the office. Use pcs at home, to connect onto office network over dial up phone/isd lines or over broad band too. While a site to site vpn offers secure connection between locations across the open internet. By doing this, companies can save a great deal of money. As they make use of domestic broadband rather than leased lines which is expensive.