Published : 5 years ago, on 06/12/2019

By Mike Riley, Senior Director UK and Northern Europe, New Relic

With mobile banking, you can look after your financial affairs exactly when and where it suits you. Yet, the convenience of online services over traditional banking has been undermined by several system outages that lasted anything from a few hours to many days. And, the banks affected have not been small financial institutions but major banking brands like NatWest, Banco Sabadell’s UK arm TSB, Bank of America, and National Australia Bank.

The impact of these outages stems from how many more customers are choosing mobile and online banking over traditional ways of accessing their accounts. For example, the UK is well on course for mobile banking to eclipse branch banking with 71 percent of customers using mobile banking apps by 2024, while branch visits fall by 55 percent over the same period (Source: CACI 2019).

As mobile and online banking becomes the primary channel for personal money management, the burden is on banks to ensure their services are reliable and deliver a superior digital experience at all times with no interruptions.

When those systems do fail and lock out customers from their accounts the damage can be considerable. For example, the meltdown of the new IT systems at TSB cost the bank £330 million to fix (Source: TSB). There are also additional effects on a bank’s trustworthiness and brand reputation.

Political pressure for banks to do more to ensure these services remain online is growing in many countries. In October 2019, the hugely influential Parliamentary Committee of UK MPs, the House of Commons Treasury Select Committee, published a damning report on the failure of financial services firms to get to grips with the problem. The committee’s chair was especially cutting in his remarks saying: “The number of IT failures that have occurred in the financial services sector, including TSB, Visa and Barclays, and the harm caused to consumers is unacceptable … For too long, financial institutions issue hollow words after their systems have failed, which is of no help to customers left cashless and cut-off.” Similarly, Australia’s central bank has threatened to intervene if banks and payments providers don’t get on top of any glitches that plague their services.

Banks know they must improve their processes, but the reality is that these outages seem to spring up with little warning and can be difficult to rectify, making the challenges involved considerable.

Research, which we recently published, provided some insight into what is happening. Our global survey on how digital transformation has progressed across all industries also looked at the financial services sector. Of the hundred-plus IT professionals who said they work in financial services internationally, close to half (47 percent) said they agreed that their end users or customers tell them about a problem with their firm’s digital apps before the IT team knows about it. Almost the same number (46 percent) agree customers and end users tell them about a problem before the IT team knows how to fix it. And, of course, some customers will feel they should share their bad  experiences on social media channels.

What is striking is that this is not happening because the teams aren’t putting in the effort to check how their banking systems are performing for customers. Indeed, more than half of respondents said they had to work longer hours to observe and manage software performance correctly.

Financial services firms must deliver the best possible digital experiences to win and retain customers especially when some of those bigger names who have had problems with their online banking are competing against digital app only challenger banks. So, it is unsurprising that four out of five banking IT professionals say the rest of their business has higher expectations in how digital systems perform.

So, what’s the solution?

When running any digital service, application for mobile banking or any other service, it is critical that there is a real-time visibility of what the customer is experiencing and full detection of any possible system vulnerabilities. There are some key strategies that banks need to have in place to prevent and minimise the effects of service outages or other performance problems, for example:

• Analyse mobile and online banking in real-time: Bankers must have real-time analytics dashboards fully set-up and tested. These should be able to measure user satisfaction and key metrics so that teams have full visibility into the user experience as it happens. Real-time dashboards should track and alert teams to changes in customer experience across all channels, including mobile, tablet, web, in-branch and on ATMs.  This means that should there arise an issue with any part of the process, it can be dealt with straight away to avoid more serious knock-on effects.
• Monitor transactions from start to finish: Transactions can be subject to several errors threatening their completion. It is vital that banks consider synthetic monitoring that simulates the customer journey can also help IT teams understand the reasons for any faults ahead of the busy period, for example spikes in spending around Christmas.
• Continually test your mobile banking: Bankers can’t assume everything will keep working indefinitely, they must test, test and test again to make sure everything is working as it should. There are several testing options. Load testing can be used to simulate expected traffic volumes during peak periods to understand how systems will perform under pressure. Chaos engineering is another possibility – it’s a more advanced but increasingly popular test, which can improve complex technology architecture resilience. Don’t forget how the root causes of the TSB outage that affected 1.9 million people and lasted a month were how crucial testing wasn’t done.

Financial services firms are learning the lessons of these outages and making major strides to observe and understand digital customer experience more effectively.  This is vital as these services increasingly rely on new technologies and practices like cloud, micro-services, containers, serverless, DevOps, site reliability engineering (SRE), and more. While modern software is designed to increase velocity and reduce the friction of getting software from code to production, they also introduce greater complexity that can make it hard to see what’s happening to the end user of the service.

For banking IT teams, true observability is critical because of how it pulls in actionable data from the entire technology stack, providing not only the when and where of an issue, but—more importantly—the why. The latter is a critical element that teams need if they are  to respond quickly and resolve emergencies in modern software like those banking service outages that have shaken the industry so seriously in recent years.