By Mike Hicks, Principal Solutions Analyst, Cisco ThousandEyes
From online banking to banking apps and wireless transfers, many customers prefer the digital experience to traditional branch interactions. In fact, a recent survey revealed that a mere 8% of UK customers use only a branch to manage their money. For all its advantages, though, such as convenience and speed, compared to an in-person visit to the local branch office, financial transactions over digital channels are susceptible to the risks of outages, downtime, and other disruptions that prevent customers from completing time-sensitive, and many times critical, transactions. We see it in the news all the time; just over a month ago major banking apps were hit with IT issues on payday affecting customers’ access to cash all over the country.
Every bank and credit union is keenly aware of what its customers think, and closely monitor the impact of any potential disruptions to digital banking systems. The challenge, though, which applies to not just financial transactions but all modern digital services, is that digital experiences today are powered by a digital supply chain that spans across owned and unowned networks, including external cloud platforms and SaaS applications. From application to user, the delivery of the digital experience is dependent on the performance of environments that sit outside of Financial Institutions’ control, yet they’re ultimately responsible for the quality and the resilience of the applications and services they deliver to customers.
Regulators are also paying attention. In the EU, new regulations such as the Digital Operational Resilience Act (DORA) have been introduced to address third-party dependency risks. Under DORA, to ensure resilience in the face of disruption, financial institutions will be held responsible for the resilience of all their information and communication technology (ICT) components, dependencies, and suppliers related to the services they provide. This includes an expectation on these institutions regarding the management, testing, and reporting of ICT issues.
For any financial institution seeking to serve their customers online, the question of how to achieve resilience not only for the systems they own, but for the third-party suppliers they rely on, has come to the forefront.
The search for stability
There’s a fine line between a digital scenario that merely inconveniences users or damages the relationship. Consumers today have complex relationships with banks and credit unions – relationships plural, as many customers bank with more than one institution.
Last year’s mass computer crash, which impacted multiple banks, served as an example of how a system failure in a third-party provider impacted banks’ own digital systems. But when it comes to accessibility, customers don’t differentiate between provider responsibility and it’s precisely this kind of scenario that has serious implications for customer loyalty and engagement. Whether it is online banking, stock trading, or payment processing, every minute of downtime puts brand perception and loyalty at risk and ultimately risks eroding customer trust.
Confidence in a digitised banking system is drawn from its stability, yet we can see some brittleness in the system as it stands. A stable experience, delivered over time, will likely paint the digital age of banking an uneventful one. For it to be uneventful, new levels of overview are required that span across the entire digital supply chain that powers customers’ digital experience, including performance, stability, and capacity to handle adverse conditions.
An uneventful future
What’s important now is that the inconveniences of the age of digital banking – the downtime, the unavailability of digital systems – are minimised. For banks and credit unions, that means having visibility across all digital processes and transactional systems from start to finish, including all the ways in which services are interconnected. Digital systems often break in obtuse ways. While not every scenario can be tested and planned for, constantly understanding the weakest link and having the opportunity to address it internally, or the evidence to flag it as an issue with an external technology supplier – brings banks and credit unions a long way towards having resilient systems that perform well for customers, and that helps tech teams identify an issue or degradation as it starts to occur.
In 2025, no banking customer will tolerate service outages. In the case of operations within the EU, regulations will not permit a lack of resilience, including in third-party dependencies. But adopting ways to achieve digital resilience isn’t impossible and the best thing of all, customers will love you for it too.
