Today’s finance customers are not comparing their experience between banks or insurance companies; instead, they’re measuring customer experience to Amazon, Southwest Airlines, Apple, and Disney, as well as fintech and insurtech companies. Because of this change in consumer behavior, financial services companies must find a way to move at Silicon Valley speeds while maintaining the financial services perfection that is demanded by customers, regulators, and shareholders.
- The rapid adoption of digital banking will continue to empower customers (78% of bank customers would bank with a tech firm; 38% would like their bank to help with major purchases like sending relevant information in real time; 87% will use their branches in the future – and want human interaction, Accenture Research)
- A ‘push’ towards digital interaction will continue (71% of insurance customers are willing to purchase at least some products via digital channels; over 40% are likely to switch to another insurance provider over the next 12 months, Accenture Research)
The challenge, then, for banks and insurance companies is to transform digitally while delivering a consistent, amazing customer experience across these channels. As financial services providers transform digitally via the cloud, mobility, and IoT (PAYGO insurance, Alexa-based home banking, chatbot support, and so on), websites need to be available and have instant page load and transaction times. Mobile apps similarly need to be stable, super-fast, and reliable. In-office claims or transactions systems can’t afford to be down or slow and leave customers waiting. Call center agents, who will be increasingly relied upon to confirm transactions, process claims, or respond to technical issues, also need stable, reliable systems with fast response times. And underpinning all consumer touchpoints is a myriad of digital marketing systems working in real time to track, analyze, and act on consumer behaviors.
Traditional application performance management has been the “go-to” tool for financial services for monitoring performance, availability, and end-user experience of software applications – its ability to discover, trace, and diagnose user requests with code-level visibility throughout your service infrastructure is unrivaled. Application performance management tools work when the service infrastructure lies inside your IT’s periphery, typically your data center; however, as bankers and insurers move their digital services to the cloud, traditional application performance monitoring breaks down. Hence, according to Forbes, “While current monitoring tools typically rely on application performance monitoring, these metrics aren’t dynamic or granular enough to provide line-of-business value…to understand software issues experienced by end users.”
To help IT dev and ops leaders stay ahead, I’ve created five actionable tips to guide dev and ops leaders in retooling their application performance monitoring for digital banking and insurance.
1. Bulk up on enterprise-grade API monitoring
In Forbes’s How APIs Help The Financial Industry Keep Up With Apple, “APIs will take center stage because of their crucial role in addressing the needs of financial services companies” to accelerate digital business transformation and promote rapid product development. While Forrester analyst Peter Wannemacher said, “Financial services providers have been relatively slow to recognize and act on APIs as an opportunity to transform their businesses,” bankers and insurers are moving quickly with APIs as a key enabler to innovate new services to delight customers.
The challenge for IT ops leaders is that APIs in financial services are increasingly used for customer-critical services like mobile banking and digital insurance, whereby APIs are embedded as a core part of the digital design often requiring real-time orchestration of a complex host of elements including fintech and insurtech collaboration, third-party data aggregators, mobile service providers, social media, and so on. As Forbes Contributor Dan Woods points out, financial service providers need an “enterprise-grade API management – the kind that can power digital transformation and drive business – that goes beyond an API gateway, and supports an ecosystem of digital collaboration.”
This means your code-level application performance management tooling will need to be complemented to handle such enterprise-grade API monitoring that gives a 360-degree perspective of the processes that make up the application to effectively validate, detect, and identify performance issues before they can disrupt your end users’ experiences widespread. Enterprise-grade API monitoring keeps track of crucial processes – both backend (affecting your database) and frontend (affecting the end-user). This means retooling your traditional application performance monitoring for digital transformation with the following five must-have capabilities for enterprise-grade API monitoring for banking and insurance:
2. Add network-centric SaaS monitoring
SaaS adoption is beginning to overtake apps and platforms residing on-premise. Forbes forecasts that “by 2018 the typical IT department will have the minority of their apps and platforms (40%) residing in on-premise systems.” For financial services, this means SaaS adoption will continue to expand beyond general purpose applications such as HR, marketing, and finance, but core banking and insurance process will follow the fintech and insurtech platform trend.
While SaaS provides speed to market and lower cost, it creates three challenges for IT ops leaders: First, moving to SaaS does not relieve you from owning the problem of poor performance and availability. Who do your users call when your Office 365 service is hindering employee productivity in your New York office, or your FinTech provider is slowing payments in specific regions? Second, over 90% of the delivery paths of SaaS services are beyond your data center and outside of your control. Third, unlike your on-premise in-house applications, with SaaS you do not have access to application code, rendering application performance monitoring inadequate in providing performance and availability insight.
Given the business-critical nature of your SaaS providers, would you bet the ranch that all you need is their SLAs? Think again. Application performance management worked well until services starting to move to the cloud and, in particular, SaaS. To effectively monitor SaaS, you’ll need to upgrade your application performance monitoring tool with the following top seven capabilities to give you complete visibility of your SaaS providers:
Further reading: Monitoring Wherever You Need it with OnPrem Agent; A Practical Guide to SLAs; Using Digital Experience Monitoring for Cloud Performance Management; Troubleshooting Network Protocols in a Complex Digital Environment
3. Integrate tag monitoring
Tag technology has exploded across financial services to boost innovation and customer experience with new digital marketing functions such as live chat, product recommendations or retargeting ads, collecting valuable customer behavior insight to drive revenue and customer experience goals. According to ChiefMartec.com, the number of digital marketing or “martech” solutions (which consume tags) grew 40% to 5,381 from 2016 to 2017 (5 years ago there were only 150 providers) with social media, email/marketing automation, content/SEO, and mobile marketing adoption leading the way. And the use of tags for digital marketing is amplified when you add in the customer-facing fintech and insurtech ecosystems to collect information about customer behaviors for marketing and customer experience purposes.
To stay ahead in your performance monitoring efforts, you’ll need to retool your application performance management to effectively monitor a wide range of tag executions including piggyback tags. Tag management systems like Tealium are designed to architect and manage tags; APM can complement this by providing the performance intelligence of tags to improve and/or preempt issues before impacting users widespread.
Here are six critical capabilities to add to your application performance monitoring system to monitor your tags:
4. Extend SLA management to third-party cloud-based services
With more applications and services moving to the cloud, the role of IT shifts from managing performance and availability, changing application performance monitoring to governance. Ensuring service level agreements (SLAs) are being met is important for both the consumer and provider of a SaaS service. SLAs provide the consumer with objective grading criteria and protection from poor service. The provider is able to set appropriate expectations regarding how the service will be judged and is incentivized to improve the quality of service. The 2017 State of SaaS Performance report conducted by Tech Target revealed that over 25% of survey respondents had incurred financial penalties for failing to meet SLAs. Monitoring your cloud providers can improve accountability, and help you potentially recoup costs if an SLA is breached.
Application performance management tools were engineered to monitor applications at the code level and where the service infrastructure is under a company’s control or data center – but they cannot provide the monitoring visibility required to effectively govern third-party services against service level agreements. Application performance monitoring needs to be extended with comprehensive SLA management capabilities that can handle virtually any kind of cloud-centric third-party service including tags, FinTech, InsurTech, APIs, Content Delivery Networks (CDNs), DNS providers, SaaS, and the list goes on. While having multiple vendors means more SLAs to manage, the benefits of less downtime far outweigh the consequences of sustained outages. SLAs provide value and protection to both the consumer and the vendor.
The framework outlined here can help consumers monitor and track the various service levels holding vendors accountable and potentially recouping costs. Here are 5 must-have capabilities to upgrade your application performance monitoring:
5. Integrate end-user experience monitoring
The growth of cloud and mobility has given financial service providers unlimited opportunity to rapidly innovate (and renovate) their businesses to outperform competitors and new entrants in delivering exceptional customer experiences, new products, and higher business productivity. In the context of application performance management, your consumer, internal user, and/or devices require the performance and availability of your applications and services to be fast and reliable, but watching your application code or infrastructure availability is useless when it comes to services that run over infrastructure outside your IT periphery. Moving parts like web objects, APIs, SaaS or browser code can severely degrade performance and availability. While back-end metrics like server, operating systems, and memory are useful when all is in your control, they’re essentially “blind” when it comes to providing you visibility and analytics of the end-user experience.
A Gartner survey of enterprise IT leaders concluded that end-user experience monitoring was the most critical dimension of application performance management. Of the respondents that cited application performance monitoring as either important or critical, 46% (the most) cited end-user experience monitoring as the most critical dimension of APM. And in Gartner’s “How to Start and IT Monitoring Initiative” report, their analysis advocates deploying monitoring technology that “can collect telemetry from the end-user perspective,” reversing the conventional wisdom of starting with hardware level, moving to application code and “up the stack.” This approach worked well until cloud and mobility took over (SaaS, APIs, network paths, microservices, etc), but today, building monitoring tools from the infrastructure and application code amounts to “chasing rabbits.” Thus, Gartner states, “it no longer makes sense to begin data collection efforts from a perspective that is unlikely to provide insight into the end-user experience.”
In terms of retooling your application code and infrastructure monitoring capabilities with end-user experience monitoring, here are five must-have capabilities:
This post was written by Yancy Oshita, with contributions by Robert Castley, Dawn Parzych, and Drit Suljoti.