One of the biggest headlines in financial services (FSI) in 2023 was the string of service outages that afflicted some of Southeast Asia’s largest banks, with millions of payment and ATM transactions suspended. The widespread disruption to businesses and consumers was so significant that the Monetary Authority of Singapore (MAS) had to intervene, directing one affected bank to put on hold any non-essential changes to its IT systems and focus on building its technology resilience.
With consumers expecting a higher level of digital interaction and access to services, along with increased regulation and scrutiny from entities like MAS, FSI organisations are encountering unparalleled challenges as they strive to modernise software and expand digital infrastructure, all while ensuring optimal uptime, reliability, performance, customer experience, and innovation.
Visibility across increasingly complex tech stacks needed
FSI organisations tend to have more complex tech stacks and a breadth of integrations with middleware, cloud platform as a service (PaaS), and mainstream platforms. This complexity underscores the importance of gaining real-time visibility into every factor that could impact the customer experience.
It’s no surprise that organisations in the industry understand the business value of observability and are investing more in it, as New Relic’s recent State of Observability for Financial Services and Insurance report shows. Compared to other industries, financial services, and insurance organisations are 15% more likely to have achieved full-stack observability, with 38% having full-stack observability.
Observability provides real-time visibility into their infrastructure and software architecture, allowing organisations to create customer-centric services and meet today’s expectations for an optimal digital customer experience (DCX). An easy and reliable connection across any device is expected for day-to-day operations for all services, including selecting providers, quickly opening accounts, or even starting a procedure online that they intend to complete in person.
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Build customer trust by minimising downtime
As seen in the past year here in Singapore and around the region, high-business-impact outages such as the ones that affected our banks, while less frequent, tend to be more complex and therefore require more time and resources to resolve.
The same New Relic report found that FSI organisations experienced fewer high-business-impact outages than many others, with 30% reporting these outages at least once a week compared to the average 32% among all respondents. Furthermore, their time to detect a high-business-impact outage average was less than other industries.
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However, the stakes are higher. More than a third (35%) of financial services/insurance respondents said critical business app outages cost more than US$500,000 per hour—which was higher than average and third highest overall compared to other industries—and 22% estimated they cost their organisations more than US$1 million an hour.
With financial services and insurance organisations more likely to invest in full-stack observability, their ability to respond to and resolve high-business-impact outages increases compared to those who have not achieved full-stack observability. Banks have traditionally had strong resiliency in their systems and a relatively slow pace of change and software developments, which supports their ability to respond to and resolve high-business-impact outages.
Once an organisation can resolve and eliminate a large number of incidents with mature observability practices proactively, they’re usually left with the more complex and unpredictable ones that take longer to resolve, even if they could detect them early and understand them quickly.
Level up your DCX
FSI organisations today are increasingly focused on customer-centric services and providing an optimal DCX. The same report by New Relic found that FSI organisations more widely deployed capabilities that are critical to their backend and core banking systems operations such as infrastructure monitoring and application performance monitoring.
Mature observability practices will enable FSI organisations to provide visibility through all the different parts of the technology stack to help IT teams troubleshoot any issues that may be degrading the digital experience for their customers. Customers don’t care if it’s your software or a third party causing an issue—they simply suffer from a substandard experience. No matter the cause, the dissatisfaction generated by these disappointing experiences reflects poorly on the business and erodes trust.
Traditional FSI organisations will face the ultimate test in Southeast Asia in 2024, as they race to recover from last year’s outages, along with the erosion of customer trust and regulatory intervention. Maintaining a laser-sharp focus on providing a great digital customer experience is crucial for these organisations to bounce back and unlock potential for future growth. By arming engineering teams with end-to-end visibility across complicated tech stacks, organisations can deliver a reliable, seamless customer experience ahead of the competition.
Kris Day is the senior vice president and general Manager for Asia Pacific & Japan, at New Relic
