Global economic instability has led to turbulent waters and balancing the books these days is a tough job to say the least. The traditional advice on how organizations should behave in a turbulent economic environment is to do everything possible to cut departmental costs and ride out the storm. However, paying little attention to further investment in core banking technology is the riskier proposition.
Arguably, banking infrastructure plays the most central role in delivering critical services when the pressure is high. When the COVID-19 pandemic hit, banks quickly deployed back-end technologies to be able to provide customers with the quick financial assistance needed to keep people alive and the economy afloat. Faced with the onset of another Great Recession, an entire DevOps movement rallied as the operations and software development communities expressed concern about serious dysfunction in the industry.
A more recent development that serves as a great illustration of today’s potential is intelligent automation. Almost every organization in one way or another is currently engaged in efforts to eliminate rote work in favor of tasks that lead to higher results. It doesn’t take a business degree to understand that speeding up processes and streamlining costs improves bottom-line growth.
Speed of self-service, flexibility
Self-service has historically been seen as a pure cost-cutting measure that often comes at the expense of a poorer user experience. This attitude is no longer valid. Numerous studies have proven that customers and banking professionals increasingly prefer the speed and flexibility that self-service allows.
Take, for example, the ability to ensure corporate technology strategies meet challenging regulatory, compliance and customer service requirements. Speed is so important and fundamental to business that all institutions feel pressured to build, deploy and manage their software faster. Approaches popular in the cloud today, such as APIs, managed services, and serverless computing, exist to increase this speed. Third-party microservices serve to significantly increase the speed of software development.
Inefficiencies in monitoring and troubleshooting, although sometimes imperceptible at first, can backfire. The cost of an unplanned stay can be quite expensive. Technology and research consultancy Gartner estimates that, on average, downtime can cost a financial institution more than $9,000 per minute of downtime.
Automated observability
Smarter technology solutions lead to competitive advantage, especially in an increasingly complex regulatory environment. The real cost of ignoring higher standards and changing regulatory requirements is not just fines and penalties. Penalties for non-compliance pale in comparison to the actual damage caused by real business disruption and lost productivity.
The trend towards automated observability – the ability of technology teams to have autonomous self-service – is the key that will allow banks to successfully deal with waves of volatility. A clean and modern enterprise architecture changes the pace at which financial institutions do business, as it can be up and running in hours, not months.
Having a flexible and resilient infrastructure changes the speed and accuracy with which the entire enterprise can respond. Every aspect of a best-in-class cloud model, from the deployment of new software to the processing of customer and user data, can be automated, remain fully traceable, and reduce the human capital costs required to maintain it.
Infrastructure automation
Full-stack observability, automated in real-time across applications, storage, services, network and compute, could be what prevents a future global economic crisis. For a growing number of institutions, infrastructure automation is at the top of the list for transformative technologies. The reason: Infrastructure as a Service (IaaS) lowers costs, mitigates IT complexity, and makes organizations more efficient—all important factors to consider when fighting for survival.
Economic downturns are not new and will continue to come and go. However, taking a proactive stance is the leading edge to better earnings. Financial institutions that prepare for low points with the right technology can better position themselves competitively and future-proof their businesses.
The most viable institutions will invest in digital transformation projects designed to help businesses get back on track faster than ever before. The laggards will be those with developers who are hampered by the need to keep testing and debugging. Ultimately, the industry players with the greatest commitment to transformation at their core will capture market share and thrive for sure.
Headache or opportunity?
Looking to technology departments for instant solutions can be seen as a headache or an opportunity. Financial institutions that view the current uncertain environment as an asset to digital innovation rather than a hindrance will have the final say on how organizations can be more agile, insight-driven and productive in the long term.
This time, it will be the deployment of visible infrastructure automation that will shape the next wave of leaders that will fundamentally move the financial services industry forward.
Rob Brueckmann is Vice President of Engineering at Brace Software Inc., where he and his team are responsible for building the company’s proprietary platform full stack.
Digital transformation too risky during a recession? Not so fast
