How resilient is the digital backbone of modern banking? Since the start of the year, several banks have suffered a period of unplanned tech and systems outages, with major repercussions not only for the banks themselves, but also their customers. For instance, over 1 million customers were impacted following the major outage suffered by several UK high street banks on the last Friday of February – pay day for many of those individuals. Eileen Haggerty, Area Vice President, Product & Solutions at NETSCOUT, discusses how banks may avoid the high price of downtime.
A web of disruption
Due to the interconnected nature of the global economy, these issues can also have a domino effect on other industries. For instance, an outage that immobilises financial institutions’ payment processing systems can prevent retailers from processing sales, manufacturers purchasing raw materials and services collecting fees.
Sadly, this type of disruption happens more than anyone would like to admit. Banks around the world have faced issues with their web and mobile apps in recent times. This list includes financial institutions affected by external forces like the global CrowdStrike outage, which prevented customers from accessing online banking services. It also includes companies that – through one internal issue or another – struggle to quickly resolve technical problems affecting the customer experience.
It’s not just online banking and consumer-facing apps that financial institutions must manage. Their IT teams also have to oversee and maintain the underlying infrastructure on which all of their other services run. This intricate web of systems only grows more complex each year as banks embrace more applications and services delivered via Software-as-a-Service (SaaS) and multi-cloud hosting.
There are obvious advantages to this type of Digital Transformation, but this complexity can also make identifying root causes challenging when problems arise. Solving these issues demands that IT teams shift toward leveraging advanced network observability tools and analytics to identify and resolve problems before they escalate.
Avoiding the high price of downtime
Limited visibility across applications and the broader network infrastructure – including data centres, contact centres, cloud hosting environments and remote locations like branch offices and ATM machines – prevents IT teams from knowing where to focus their efforts when a performance issue strikes.
Is there a network issue? Is a connected third-party application or database unavailable? Are issues localised to a particular region? Without end-to-end visibility across the network, it’s hard to understand which of these issues (or others) may be affecting performance, and identifying root causes can feel like searching for a needle in a haystack.
At the same time, every minute counts when customers can’t access their funds, process payments or perform any of the necessary functions they expect to be available at all times – be it a mobile app, an online customer portal or a local ATM machine. In the long run, as customers switch to banks with more reliable services and applications, a physical cost is associated with performance problems in the form of fewer loyal customers and decreased deposits. There is an additional opportunity cost that can come from prospective customers going elsewhere due to the onslaught of social media posts they saw that damaged the bank’s reputation further.
It’s also worth noting that financial institutions face higher regulatory scrutiny, with growing security and resilience requirements. For example, new laws like the EU’s Digital Operational Resilience Act (DORA), which imposes fines of up to 2% of a firm’s total annual worldwide turnover if financial institutions fail to meet compliance requirements, underscore the growing regulatory pressure banks face to strengthen digital infrastructure and operational resilience.
Advanced network observability
To have the chance to prevent or at least minimise the impact of the next IT failure, banks must consider deep packet inspection – a form of advanced network monitoring that allows IT teams to analyse real-time data flow across applications and connected infrastructure. Deep packet inspection combined with synthetic testing, which involves automatically and routinely simulating real user actions (even when users are at rest), ensures banks IT teams can understand both real-world traffic patterns and trend utilisation to reveal conditions that may lead to an outage.
Many banks already employ these forms of advanced network monitoring, though not at scale. Expanding visibility across their broader network infrastructure and remote locations allows for more proactive management of potential performance issues, enabling financial IT teams to spot changes in trended activity that might identify weak points before they escalate into bigger issues, establishing smoother, more reliable service for customers.
Strengthening visibility is the backbone of a strong operational posture for banks. For example, with enhanced visibility, financial institutions can ensure that as an issue occurs, they are immediately notified via internal systems. This gives their IT teams time to address issues – even if it’s in the middle of the night – and resolve them quickly, ideally before customers and employees are impacted.
Nevertheless, while it’s more important than ever for banks to strengthen their IT infrastructure, they must first ensure foundational systems, processes, and safeguards are in place. If financial institutions rush deployments or fail to properly test their systems, they still run the risk of suffering a major outage.
Ultimately, for banks, maintaining customer satisfaction and ensuring operational resilience in equal measure is key. Most people wouldn’t keep a gym membership if the machines were frequently out of order. In the same way, many customers appreciate the convenience offered by their bank’s mobile application, online services and distributed ATMs, and if it breaks down regularly or is hard to use, they’ll start looking for another bank.
It doesn’t matter how many systems need maintenance, how complex the underlying infrastructure has become, or whose fault it was that things broke down in the first place. All that matters is that banks can move quickly to identify emerging issues and pinpoint the precise cause of the problem so they can get valuable information to the right team or vendor to help them restore service fast when an outage or major performance issue strikes. That starts with more effective and proactive network observability across the organisation.
