It seems like digital transformation is a ‘one step forward, two steps back’ affair for Australia’s beleaguered banking sector. Recently an infrastructure upgrade gone wrong for the Commonwealth Bank of Australia prevented customers from accessing their accounts for almost half a day. Similar major outages in the past have proven to erode precious customer trust, and led many to shut their accounts and take their business elsewhere.
This is the double-edged sword dilemma of Australia’s banks. Ignore digital transformation and you’ll be ousted by digital competitors and fintech operators, but transform too fast and you may face significant risk and failure. What should IT teams do help banks maintain digital services that are efficient, dependable, and less prone to error? And at the same time, how best should banks navigate risky digital change and avoid lagging?
Why Do Banks Struggle to Go Digital?
Before they lead digital transformation, IT pros should understand the dual factors influencing most decisions in banking: risk and reliability. Both are well and present in modern banks, from the stable and reliable on-prem hybrid infrastructure powering operations to the still widespread use of COBOL due to its proven track record and regulatory compliance investment. The value of legacy infrastructure lies in its low-risk familiarity. When even simple software updates risk crippling modern banking operations, you can appreciate the hesitation to relinquish control and replace systems that work.
Banks also tend to see their IT teams more as implementors, instead of innovators. Due to tight margins and ambitious financial goals, bank IT teams are incentivised to deliver solutions delivering decent levels of service—but at the lowest possible cost. Proposed upgrades also must toe the line of compliance, reliability, and security, which tends to put a dampener on the more exciting but unproven emerging digital technologies.
All of this doesn’t mean banks are averse to digital change—on the contrary. But any proposed digital change must tick the boxes of risk, reliability and most importantly cost. IT pros can chart a clearer, safer, and more efficient path to digitisation, to reinvigorate a bank’s hybrid infrastructure and prepares it for the future.
App Performance Management (APM): The Key to Digital Banking?
The greatest challenge—and opportunity—facing banks is their inability to retain visibility over volumes of data zipping about their networks. Under the sleek and shiny UIs of most banking portals or mobile apps is a sprawling mesh of legacy on-prem hardware, virtual machines, and application stacks. This complex web doesn’t just impact the performance of banking services and applications; it also makes pinpointing issues harder. And when things cascade—as they always do—IT teams race against time to peel back the many layers of the system, in a desperate attempt to find the root causes of multiple issues.
Modern APM solutions do away with much of this guesswork. Today’s digital banking services increasingly rely on a modular approach of third-party services operation in sync, and solutions like APM will be essential in keeping tabs over this disparate ecosystem. Linking new cloud-native components with a bank’s digital layer via APM allows IT to tap into real-time data streams—like transaction tracing and service logs—along with traditional network monitoring tools to bolster their monitoring capabilities.
Issues on the application layer can quickly be traced and isolated through user and device profiles and resolved before they cascade to other areas of the network. This allows banks to guarantee service uptimes and efficiency—and allows consistent enforcement of security and compliance policy throughout the network.
Adopting New Digital Sensibilities
The decision to use modern solutions like APM to bolster legacy systems should inspire similar endeavours. A growing number of IT pros are looking to ‘containerise’ everything including COBOL to create an updated and cost-effective framework for custom applications. Some are even swapping on-prem mainframes in favour of cloud-based managed platforms like Microsoft Azure, which boasts flexible compute power to run processor-heavy workloads. This allows IT to gradually digitise small areas of a bank, without resounding impacts to overall operations.
But it’s not all about adaptation. As they continue to digitise, hardware and network limitations will gradually become less of a concern. This presents banks with the perfect opportunity to reinvent the user experience of their applications and systems. And this isn’t just mean a redesign of UI/UX; banks must work with IT to revamp the many ‘workarounds’ or ‘hacks’ that were early experiments in to delivering modernized banking services atop legacy infrastructure. These quick fixes tend to be inefficient, unpredictable, and are at odds with the need to deliver a smooth, quick, and stable banking experience for customers.
Australia’s banks have a rich history and the tools and solutions they need to bring effective and long-lasting digital transformation—not just software upgrades or hardware swaps. With the help of their IT experts, they can certainly modernize legacy foundations, implement deeper and more effective monitoring, and focus on growing their business. The method and means are there. The question then is: will Australia’s banks give digital transformation another go?