Banking institutions are at a challenging crossroad. As customer demand for digital banking continues to rise, they must be able to keep up with expectations. To do this, they need to deliver flawless digital user experience and performance for an indeterminate number of users at any time, across multiple, secure channels. Websites must be available with fast page load and transaction times. Similarly, mobile apps must be intuitive, stable, secure and fast. In-branch applications and systems can’t afford to leave customers waiting.

Also, each of these transactions must come with guaranteed security. Cybercriminals constantly target banking sites, and many financial services providers find themselves walking a delicate tightrope in maintaining user-friendliness and application performance while being secure. Accordingly, banks have traditionally wanted to keep their IT on-premises and have been cautious of public and hybrid cloud services. However, a new-found confidence in cloud computing within the banking sector is growing due to the improved level of security available today.

Financial Institutions Embracing Multi-Cloud Services

The financial sector is increasingly embracing multi-cloud services, citing efficiency and cost reduction, as well as improved security and keeping up with technological innovations. According to Martin Häring, Chief Marketing Officer at Finastra, there has been “a significant turnaround in banks’ attitudes to the use of cloud in financial services over the last few years – and there’s no doubt this is being driven in part by PSD2 [the European Union’s Payment Services Directive] and open banking.” Microsoft has seen robust cloud adoption in the financial services industry, with over 80% of the world’s top banks and over 85% of global banks using Azure.

Maintaining current levels of service during the migration can be challenging. In 2018, a poorly planned IT migration was derailed by a configuration error causing an outage at TSB Bank that left 2 million customers without banking access for over a week. This outage reportedly cost the company $431.5 million in lost revenue and SLA penalties, churn in excess of 80,000 customers, a 45% loss in market capitalization, and the CEO’s resignation.

The Need to Go Beyond Traditional APM

Within this context, financial institutions are reevaluating traditional monitoring practices as the cloud migration journey can be considerably eased by deploying the right monitoring solution. When operating systems were on-prem, banks relied primarily on on-prem application performance monitoring (APM) tools to check performance and availability. With the rise of external parties controlling components of digital architecture, however, traditional APM’s narrow-focus and the complexity associated with APM instrumentation is problematic. Increased IT complexity also makes it difficult to determine the exact source of problems with traditional APM. As the financial services industry evolves its strategies, financial institutions are beginning to see the value of advanced data analytics, enabling them to not only proactively identify issues and prevent outages but also identify opportunities for business growth and increased customer satisfaction. For all these reasons, banking leaders at the forefront of recent digital transformations are increasingly coming to embrace the principles and practices of digital experience monitoring. 

Three Groundbreaking Digital Banking Initiatives

Below are three financial institutions successfully implementing groundbreaking digital banking initiatives. All three require a monitoring strategy that goes beyond APM.

Bank of America Drives Digital Transformation with Mobile Banking

“We’re a technology company, wrapped around a great bank, and that’s going to be the future of what we do, and that’s because our customers demand it,” Brian Moynihan, CEO of Bank Of America, explained to the Consumer Bankers Association last August. Each year, Bank of America invests between $2.5 and $3 billion in coding. Don’t confuse this emphasis on code with that of an APM vendor, however. Bank of America’s “high-tech, high touch” mobile product line delivers modern banking experience to customers and breaks records year-over-year reaching 35.5 million users who made 1.38 mobile logins in Q4 2018, and whose mobile transactions accounted for 24% of all transactions in 2018.

This type of mobile, digital service requires the involvement of several third parties, such as cloud infrastructure and wireless providers to deliver the customer experience. Simply monitoring their own app code would not give Bank of America enough insight into what their mobile users are experiencing. A comprehensive monitoring solution beyond just APM, however, can provide end-to-end visibility into end user experience.

FIS Global Brings Transparency to Cloud SLAs

FIS Global is one of the leading providers of financial services technology and outsourcing services worldwide. Last year, FIS took a groundbreaking stance when it introduced a new service level agreement (SLA) for its cloud-based customers in North America. Clients of its cloud-based solutions will now receive financial credit for any service outage lasting longer than 15 minutes – as long as it was caused by FIS.

“Today, more than ever, financial institutions and their customers need their critical systems and applications to be constantly available,” said Bruce Lowthers, Chief Operating Officer of Integrated Financial Services at FIS. “This new agreement is a bold statement to our clients that FIS stands behind our ability to deliver nearly constant up time for the applications and services they need to run their businesses and connect with their customers.”

Developing a plan to monitor applications running on FIS’ cloud-based solutions will allow FIS customers to hold FIS Global (and other 3rd party vendors) accountable. Bringing together synthetics and RUM can help address issues with network latency or slow DNS response, for instance.

Today’s market houses many monitoring and observability tools, but not all come equally in terms of the number of vantage points necessary for monitoring in the cloud. This often leads to an over-dependence on end users to reveal a problem. Your vendors, such as FIS, need to be monitored from as many vantage points as possible. If they don’t meet the conditions outlined in the SLA, check the repercussions section, which may include fines. Sometimes, reimbursement takes the form of discounted or “free” service for a set period.

Santander Solves Abandoned Cart Problem

According to the Digital Banking Report, there is a very high abandonment rate for consumers who attempt to open a new account digitally. Within branches, there is a lower abandonment rate, but the complexity of the process, which is often heavily paper-intensive, leads to less time for the account manager to get to know the needs of the customer. Santander Bank, therefore, decided to do a complete overhaul of its new account opening architecture and software to make the process paperless and more efficient through reduced screens and clicks.

“Modernizing the account opening process has enhanced the Bank’s ability to serve our customers,” said Brian Diepold, Santander’s Director of Marketing Insights and Technology. “We’ve re-engineered the process to take as little as two minutes, which gives bankers more quality time with the customer instead of keeping them occupied inputting data.”

Just like the Bank of America example, this digital banking advancement from Santander requires multiple vendors, providers, and internal systems to achieve. Simple APM monitoring won’t give their teams enough insight into the end user experience.

How DEM Can Help the Financial Sector with Digital Transformation

Where DEM offers digital banking the most value is in proactive performance monitoring. Advanced synthetic tests simulate comprehensive user transactions and monitor performance and availability, ultimately ensuring real customer satisfaction and retention. This proactive monitoring of business-critical transactions captures performance data, which, when combined with real-user monitoring (RUM) data can provide financial organizations with vital customer journey data and digital experience insights, to better understand and ultimately serve their target clients.

As the banking sector increasingly embraces digital technology and transforms customer experience in a myriad of ways, the right monitoring tools are a necessity. As Forbes has highlighted, implementing effective monitoring can allow a company “to overcome key barriers to effective digital transformation”. A fundamental shift is required from current monitoring tools to overcome major visibility gaps.

The right holistic monitoring solution can aid banks in their digital transformation journeys in a variety of ways, including:

  • Providing customer journey analytics, which capture end-to-end performance data, allowing banks to ask better questions based on behavioral insights to improve customer experience. Complete visibility allows you to resolve issues more quickly and improve end user experience.
  • Synthetic monitoring can help in a variety of ways, for instance, by offering a line of sight into how real users will interact with a new app before it goes live or by simulating what happens when the app is introduced into new geographies, letting you find issues before customers do.
  • There are several monitoring strategies that will help with security, perhaps the most significant concern of financial services.
  • While developing your network performance monitoring plan, don’t forget, for instance, the FTP protocol, which is still frequently used in the banking sector to manage software downloads or transfer large files. Monitoring can help you confirm that FTP servers are able to accept connections, authenticate users correctly, and upload or download files.
  • Catchpoint offers the SSL monitor, in order to provide critical insights into the security configuration of your application. The SSL monitor lets you track several essential security features, including certificate validity, revocation and pinning, helping you protect your application from malicious attack.

If you’re looking to learn more about the history of digital transformation within the banking and financial services industry, Catchpoint has a book for that. Our ebook, The Importance of DEM in the Financial Services Industry, examines how technology has transformed the way customers interact with financial institutions and how DEM can help organizations keep up with expectations.

digital banking and financial services ebook