Australia’s banks search for clarity in their complex digital operations

Australia’s banks search for clarity in their complex digital operations

By Rafi Katanasho, APAC Chief Technology Officer at Dynatrace


Australia’s financial sector is undergoing a significant restructure, as generational change marks not only a shift in wealth but also drives significant changes in the day-to-day banking needs of customers.

Caught in the crossroads of serving an older generation as well as a digitally savvy younger population, and facing increased competition from modern fintechs, banks are responding in different ways.

Some are looking at a hybrid model that integrates digital experiences into traditional physical branches. Others are undergoing a full-scale digital transition: progressively closing regional branch networks, and attempting to shift customers to online or app-based service delivery channels.

Growing customer preferences for digital banking have driven an eight-fold increase in technology investment since 2005, up from $3.5 billion to $28.5 billion, according to the Australian Banking Association.

While digital banking platforms and channels are now preferred by the majority of customers and represent an efficient way to interact with banking services, the frontend experience tends to mask considerable complexity in the backend.

As customer expectations rise and new features and financial products are added on a rolling basis, the number of technical components – systems, microservices, APIs and so on – used to power this ever-evolving digital banking experience continues to increase in complexity.

It has reached a point that many organisations—particularly more established banks—are building these services on a technology stack spanning many cloud platforms, as well as legacy on-premises systems.

More than half (54%) of financial services businesses that responded to a recent Dynatrace survey predict these systems will become more complex in the next 12 months.

That added complexity spells potential trouble for banks.

With more ‘moving parts’, there are more potential points of failure in digital banking environments that need to be carefully observed and managed to ensure services are resilient and that any degradations or problem scenarios can be quickly detected, triaged and remediated – before a customer-facing impact is able to occur.

Taking away valuable innovation time

To stay on top of the performance and resilience of digital banking systems, operational and security teams need new ways to sift through the explosion of data that all these technical components are producing.

The rise of dynamic cloud-native technology stacks has unleashed a flood of data that teams are struggling to contain. The data has clear value in providing the insights that modern digital banks need to drive smarter decisions and better business outcomes. However, cloud environments generate data at such volume and velocity that most technology leaders consider it impossible for teams to cost-effectively capture and analyse it using outdated practices and fragmented monitoring tools.

This is having several impacts.

In Australia, 94% of technology leaders see multicloud complexity as making it more difficult to deliver an outstanding front-facing customer experience. According to the same research, some 77% of technology leaders also say the time their teams spend maintaining monitoring tools and preparing data for analysis is stealing away valuable time from innovation.

The point at which complexity weighs negatively on the ability for banks to perform digital service delivery, to continue to innovate those experiences and to meet evolving customer needs, is a clear signal that something needs to change. A different approach to getting a handle on complexity is required.

Unifying observability

On average, Australian organisations – banks included – utilise nine different observability or monitoring tools to manage their applications, infrastructure, and user experience. This fragmented approach leaves teams struggling to access the answers they need to accelerate innovation and optimise digital services effectively. Some 85% of technology leaders say the number of tools, platforms, dashboards, and applications they rely on adds to the complexity of managing a multicloud environment.

To address this, 80% of Australian organisations are currently using or planning to adopt a unified platform for observability and security data within the next 12 months.

Observability enables teams to measure a system’s state based on the data it generates. A unified observability approach takes it a step further, enabling teams to monitor and secure their full stack on an AI-powered data platform. It presents data in intuitive, user-friendly ways to enable data gathering, analysis, and collaboration, while reducing mean time to repair (MTTR) issues and boosting application performance and availability.

One banking executive recently likened to the approach to “having a centralised eye” across their burgeoning digital operations. Having too much siloed data and systems made it “incredibly difficult to stitch it all together” to gain a composite picture of operations. “You can’t do that if you don’t have that centralised eye [that unified observability provides].”

As digital transformation continues to dominate as a key priority in Australia’s financial sector, banks must seek out new ways to continue to build and maintain a competitive edge. Unified observability offers them a way to stay on top of the complexity of current digital operations, while freeing up time to continue developing future experiences.