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High-Business Impact Outages Cost Financial Services and Insurance Sectors $2.2 Million Per Hour

Nearly half of respondents experience high-business-impact outages at least weekly

Artificial intelligence (AI) is core to observability practices, with some 41% of respondents reporting AI adoption as a core driver of observability, according to the State of Observability for Financial Services and Insurance report from New Relic.

"Financial services and insurance organizations are navigating a fast-moving digital landscape where reliability, security, and operational efficiency are non-negotiable," said New Relic Chief Technical Strategist Nic Benders. "These businesses grapple with frequent high-impact outages, complex tool sprawl, and mounting regulatory pressures, all while striving to deliver seamless digital experiences. The report's findings demonstrate how critical observability is in helping businesses reduce costly downtime, leveraging AI, and modernizing legacy systems to meet rising customer expectations while maintaining compliance. Observability is no longer just a technical practice; it is mission critical."

Financial modernization and AI adoption are key priorities

Financial modernization was highlighted as a top priority of the research, with institutions migrating to the cloud, investing in digital-native subsidiaries, and adopting cutting-edge technologies like AI.

Observability plays a significant role in these transformations, with 34% of respondents citing AI-assisted troubleshooting as crucial to improving observability practices.

Additionally, 42% reported ambitions to consolidate tools in the coming year to address challenges like tool sprawl and data silos.

Organizations in the financial services and insurance sectors are also ahead of other industries in cloud-native application development (36% adoption compared to 31% across all industries) and containerized workloads (28% versus 23% overall). These modern technology strategies, combined with robust observability solutions, empower businesses to remain agile and competitive in an increasingly digital-first world.

AI adoption also accelerates observability adoption, with respondents highlighting automatic root cause analysis (32%) and AI-assisted remediation actions (32%) as key opportunities to strengthen their practice.

Financial and reputational outage risks require intelligent observability

Despite advances in technology adoption, financial services and insurance organizations face significant hurdles, including frequent outages, fragmented data, and the rising costs of downtime. The report reveals that these companies experience high-business-impact outages more often than most industries, with nearly half (48%) reporting at least one such incident weekly. The median cost of downtime for these outages in this sector is $2.2 million per hour; 16% higher than the average across all industries.

Detecting and resolving outages remains a challenge, with the median mean time to detection (MTTD) at 42 minutes, and mean time to resolution (MTTR) at 58 minutes; both higher than industry-wide averages.

However, those leveraging full-stack observability experience faster detection and resolution times, underscoring its value in mitigating the financial and reputational risks of outages.

Tool consolidation creates value, as observability ensures strong ROI and system uptime

Nearly half (49%) of respondents preferred a single observability platform to simplify operations and extract greater value from investments. By consolidating tools, businesses can overcome common barriers like data silos and achieve end-to-end visibility across their tech stack.

Financial services and insurance organizations report significant return on investment (ROI) from their observability investments, with a median annual return of 297%. These tools enable companies to reduce downtime, increase operational efficiencies, and enhance customer experiences by ensuring systems remain fast, reliable, and secure.

Nearly half of respondents (49%) say observability improves system uptime, while 42% point to operational efficiency gains. In particular, practitioners see observability as a productivity booster, which helps them troubleshoot faster and manage complex infrastructures with less guesswork.

The Latest

IT organizations have historically measured success by how quickly they can respond when something goes wrong. The entire discipline of Incident Management has been optimized around mean time to resolution, first-response SLAs and ticket closure rates. But new research suggests that even though this is a well-executed playbook, it's no longer enough to retain customers ...

Production incidents rarely announce themselves as database problems. They appear as slow transactions, timeouts, rising response times, or an application struggling under a workload it previously handled. APM provides an essential starting point. It can identify a slow transaction path, highlight an affected service, and show that a database dependency is consuming more time than expected. But identifying the database as part of the problem is not the same as explaining what is happening inside it ...

Cloud teams are under constant pressure to reduce spend without slowing development or increasing operational risk. They are deploying autoscalers, rightsizing workloads, enforcing resource requests, reviewing utilization dashboards, and building FinOps processes around cloud-native environments. Yet the results often disappoint ...

Ask most IT leaders about their biggest concern with AI and you'll hear the same answer: hallucinations ... Today, however, the conversation has shifted ... As organizations move beyond chatbots and experiments, they are increasingly deploying AI agents that perform multi-step tasks. These systems retrieve documents, query databases, call APIs, generate reports, write code, and make recommendations. The issue is not whether the model can reason. The issue is whether the organization can see, verify, and govern the decisions being made along the way ...

While organizations want to take control of their telemetry, building telemetry pipelines from scratch can be a very daunting, complicated task, even when leveraging open-source standards like OpenTelemetry. It requires specialized knowledge across distributed systems, data engineering, and security. This fragmented approach across systems causes higher operational costs; it puts a strain on resources and reduces efficiency as teams have to work with different interfaces and processes ...

For decades, enterprise networks were designed around a simple assumption: work happened inside the office. Applications lived in centralized data centers, employees connected through internal infrastructure, and security focused on protecting the perimeter that surrounded everything ... But the way organizations operate today bears little resemblance to that environment. Cloud platforms host critical applications, employees connect from homes and airports as often as they do from offices, and partners collaborate through shared systems that exist far beyond corporate walls. In short, the corporate network no longer resembles the environment it was designed to protect ...

As an analyst who researches how IT organizations design, build, and operate their networks, I find that network data is a constant source of pain. Network teams struggle with data quality, fragmentation, authority, access, and trust. And these issues undermine everything they try to do. Here are the numbers: Only 45% of network teams are completely confident in the accuracy of their network source of truth, which documents the intent of their network ...

The 2026 Global Data Center Survey from Uptime Institute reveals an industry navigating workforce constraints, escalating outage expenses, even as rising costs remain the top concern for management teams ...

The next observability gap may not be in the code. It may be under the rack. That sounds strange until you think about how AI incidents actually feel in the middle of an investigation ... The application dashboard may be accurate. It may also be stopping at the wrong boundary. AI systems depend on software, but they also depend on a dense physical stack: racks, power paths, thermal margin, maintenance activity and, in many environments, liquid cooling. Those physical dependencies can change slowly before they look like a software incident ...

Certificate expiration is the rare outage you can see coming. Every TLS certificate carries the date it stops working, so the moment it will begin breaking connections is knowable in advance. That's what makes an expired certificate such a frustrating way to lose a service. What's changing now is how often that date comes around ...

High-Business Impact Outages Cost Financial Services and Insurance Sectors $2.2 Million Per Hour

Nearly half of respondents experience high-business-impact outages at least weekly

Artificial intelligence (AI) is core to observability practices, with some 41% of respondents reporting AI adoption as a core driver of observability, according to the State of Observability for Financial Services and Insurance report from New Relic.

"Financial services and insurance organizations are navigating a fast-moving digital landscape where reliability, security, and operational efficiency are non-negotiable," said New Relic Chief Technical Strategist Nic Benders. "These businesses grapple with frequent high-impact outages, complex tool sprawl, and mounting regulatory pressures, all while striving to deliver seamless digital experiences. The report's findings demonstrate how critical observability is in helping businesses reduce costly downtime, leveraging AI, and modernizing legacy systems to meet rising customer expectations while maintaining compliance. Observability is no longer just a technical practice; it is mission critical."

Financial modernization and AI adoption are key priorities

Financial modernization was highlighted as a top priority of the research, with institutions migrating to the cloud, investing in digital-native subsidiaries, and adopting cutting-edge technologies like AI.

Observability plays a significant role in these transformations, with 34% of respondents citing AI-assisted troubleshooting as crucial to improving observability practices.

Additionally, 42% reported ambitions to consolidate tools in the coming year to address challenges like tool sprawl and data silos.

Organizations in the financial services and insurance sectors are also ahead of other industries in cloud-native application development (36% adoption compared to 31% across all industries) and containerized workloads (28% versus 23% overall). These modern technology strategies, combined with robust observability solutions, empower businesses to remain agile and competitive in an increasingly digital-first world.

AI adoption also accelerates observability adoption, with respondents highlighting automatic root cause analysis (32%) and AI-assisted remediation actions (32%) as key opportunities to strengthen their practice.

Financial and reputational outage risks require intelligent observability

Despite advances in technology adoption, financial services and insurance organizations face significant hurdles, including frequent outages, fragmented data, and the rising costs of downtime. The report reveals that these companies experience high-business-impact outages more often than most industries, with nearly half (48%) reporting at least one such incident weekly. The median cost of downtime for these outages in this sector is $2.2 million per hour; 16% higher than the average across all industries.

Detecting and resolving outages remains a challenge, with the median mean time to detection (MTTD) at 42 minutes, and mean time to resolution (MTTR) at 58 minutes; both higher than industry-wide averages.

However, those leveraging full-stack observability experience faster detection and resolution times, underscoring its value in mitigating the financial and reputational risks of outages.

Tool consolidation creates value, as observability ensures strong ROI and system uptime

Nearly half (49%) of respondents preferred a single observability platform to simplify operations and extract greater value from investments. By consolidating tools, businesses can overcome common barriers like data silos and achieve end-to-end visibility across their tech stack.

Financial services and insurance organizations report significant return on investment (ROI) from their observability investments, with a median annual return of 297%. These tools enable companies to reduce downtime, increase operational efficiencies, and enhance customer experiences by ensuring systems remain fast, reliable, and secure.

Nearly half of respondents (49%) say observability improves system uptime, while 42% point to operational efficiency gains. In particular, practitioners see observability as a productivity booster, which helps them troubleshoot faster and manage complex infrastructures with less guesswork.

The Latest

IT organizations have historically measured success by how quickly they can respond when something goes wrong. The entire discipline of Incident Management has been optimized around mean time to resolution, first-response SLAs and ticket closure rates. But new research suggests that even though this is a well-executed playbook, it's no longer enough to retain customers ...

Production incidents rarely announce themselves as database problems. They appear as slow transactions, timeouts, rising response times, or an application struggling under a workload it previously handled. APM provides an essential starting point. It can identify a slow transaction path, highlight an affected service, and show that a database dependency is consuming more time than expected. But identifying the database as part of the problem is not the same as explaining what is happening inside it ...

Cloud teams are under constant pressure to reduce spend without slowing development or increasing operational risk. They are deploying autoscalers, rightsizing workloads, enforcing resource requests, reviewing utilization dashboards, and building FinOps processes around cloud-native environments. Yet the results often disappoint ...

Ask most IT leaders about their biggest concern with AI and you'll hear the same answer: hallucinations ... Today, however, the conversation has shifted ... As organizations move beyond chatbots and experiments, they are increasingly deploying AI agents that perform multi-step tasks. These systems retrieve documents, query databases, call APIs, generate reports, write code, and make recommendations. The issue is not whether the model can reason. The issue is whether the organization can see, verify, and govern the decisions being made along the way ...

While organizations want to take control of their telemetry, building telemetry pipelines from scratch can be a very daunting, complicated task, even when leveraging open-source standards like OpenTelemetry. It requires specialized knowledge across distributed systems, data engineering, and security. This fragmented approach across systems causes higher operational costs; it puts a strain on resources and reduces efficiency as teams have to work with different interfaces and processes ...

For decades, enterprise networks were designed around a simple assumption: work happened inside the office. Applications lived in centralized data centers, employees connected through internal infrastructure, and security focused on protecting the perimeter that surrounded everything ... But the way organizations operate today bears little resemblance to that environment. Cloud platforms host critical applications, employees connect from homes and airports as often as they do from offices, and partners collaborate through shared systems that exist far beyond corporate walls. In short, the corporate network no longer resembles the environment it was designed to protect ...

As an analyst who researches how IT organizations design, build, and operate their networks, I find that network data is a constant source of pain. Network teams struggle with data quality, fragmentation, authority, access, and trust. And these issues undermine everything they try to do. Here are the numbers: Only 45% of network teams are completely confident in the accuracy of their network source of truth, which documents the intent of their network ...

The 2026 Global Data Center Survey from Uptime Institute reveals an industry navigating workforce constraints, escalating outage expenses, even as rising costs remain the top concern for management teams ...

The next observability gap may not be in the code. It may be under the rack. That sounds strange until you think about how AI incidents actually feel in the middle of an investigation ... The application dashboard may be accurate. It may also be stopping at the wrong boundary. AI systems depend on software, but they also depend on a dense physical stack: racks, power paths, thermal margin, maintenance activity and, in many environments, liquid cooling. Those physical dependencies can change slowly before they look like a software incident ...

Certificate expiration is the rare outage you can see coming. Every TLS certificate carries the date it stops working, so the moment it will begin breaking connections is knowable in advance. That's what makes an expired certificate such a frustrating way to lose a service. What's changing now is how often that date comes around ...