Physical bank branches in the US could be extinct by 2034, according to a study funded by Self Financial Inc. While the permanence of physical banking is still up for debate, it's clear that digital banking is growing exponentially. In fact, 75.4% of Americans will use digital banking services by the end of 2021, and by 2025, this percentage will climb to an estimated 80.4%. Increasing digital transformation is even prompting some traditional financial institutions to proclaim themselves tech companies.
Many financial institutions are expanding online services to bolster their digital presence and keep pace with consumers' growing reliance on virtual banking. But the financial industry is still slow to deploy automation that will elevate their competitive advantage. According to Cornerstone Advisors, only 57% of banks and credit unions began digital transformations before 2021. And, of those at least halfway through their digital transformations, only 14% were using machine learning (ML).
Let's dig into why advanced automation — and AIOps in particular — is vital to staying competitive in today's financial sector.
AIOps as an Asset
Technology is now foundational to financial companies' operations with many institutions relying on tech to deliver critical services. As a result, uptime is essential to customer satisfaction and company success, and systems must be subject to continuous monitoring. But modern IT architectures are disparate, complex and interconnected, and the data is too voluminous for the human mind to handle.
Enter Artificial Intelligence for IT Operations (AIOps). AIOps tools leverage artificial intelligence to help SRE teams and DevOps practitioners monitor complex IT stacks, identify — and even predict — incidents and provide actionable insights into fixes.
Here are specific ways the power of AIOps can benefit the financial sector:
■ Enhance the customer experience. Today's consumers have no tolerance for downtime, and the stakes are exceptionally high when personal finances are involved. AIOps tools help prevent customer-impacting downtime by quickly finding problems within a system and determining their root cause. The resulting outcome is better service assurance and less mean time to remediation (MTTR), which leads to happier customers.
■ Defend against cybercrime. Roughly three-fourths (74%) of financial institutions in the US and U.K. experienced a rise in cybercrime from March 2020 to March 2021, according to BAE Systems Applied Intelligence. AIOps can help defend against cybercrime and their potentially devastating financial fallout for companies — falling stock prices, reputational damage and legal action on top of the known monetary losses. AIOps tools provide around-the-clock monitoring, rooting out suspicious behavior and instigating defense tactics to secure systems under attack.
■ Unlock time to innovate. While SREs and DevOps teams should develop innovative technology that delights customers and drives profitability, many operate in a constant reactive mode. Without the proper tools, teams can spend entire days drowning in incidents, putting out fires and falling short of their strategic goals. AIOps tools unlock time by automating mundane tasks, reducing noise, correlating events and raising system visibility to enable collaboration across teams.
One of my companies recently implemented an AIOps tool for a $100 billion global financial institution that found itself inundated with alerts. Prior to its AIOps adoption, the company relied on legacy monitoring tools to detect incidents. When an incident surfaced, upwards of 100 employees would bring their siloed data from their own disparate monitoring tools to cumbersome triage calls. In the meantime, time was ticking with the downtime causing mounting revenue losses and frustrated customers. But once the AIOps tool rolled out, MTTR fell by 40% in just six months, increasing valuable uptime and unlocking time to develop new customer-facing technologies.
As consumers embrace virtual experiences and the convenience of always-on digital services, digital banking will become more ubiquitous. But financial companies need to brace for this shift while addressing rising consumer expectations — for uptime and leading-edge technology — and broadening cybersecurity risks. AIOps is the key to addressing these challenges and gaining a competitive advantage in today's fiercely competitive financial sector.