According to McKinsey’s research, almost three-quarters (73%) of American consumers used digital banking in 2020. And 21% of those users were new adopters. Although accelerated by the pandemic, this shift to digital-first banking will be permanent. In fact, projections indicate that more than 80% of Americans will rely on digital banking by 2025.
The finance industry is responding to this sea change by offering robust consumer-facing digital products and services. But the industry generally lags at adopting other automated strategies that can add considerable business value.
Before 2021, a mere 57% of banks and credit unions had started their digital transformation journeys, according to Cornerstone Advisors’s “What’s Going on in Banking 2021.” And a surprising few—only 14%—of those that had started digital transformation strategies had deployed machine learning (ML) tactics.
How is the financial sector missing out by overlooking automation? And what are the key benefits of advanced automation, specifically AIOps?
The Advantages of an AIOps Strategy
As fewer people use manual processes for financial services like withdrawing cash or making transactions, more people are turning to digital products and services and the convenience of 24/7 access. Indeed, technology now touches almost every financial product and service, and poor system performance and outages are simply not tolerated, especially by consumers trying to access their assets.
For optimal uptime, continuous monitoring is essential. But the old methods of manually monitoring IT infrastructures have become nearly impossible, with complex and disparate systems producing tremendous amounts of data. As a result, IT Operations teams responsible for maintaining and improving systems need help.
AIOps, short for artificial intelligence for IT operations, is a strategy for automating time-consuming processes, analyzing big data and leveraging machine learning (ML) to set baselines for system performance and surface behavioral anomalies. These benefits come together to increase uptime and improve overall system performance. And when apps and services fail, AIOps tools detect and diagnose incidents for faster mean time to resolution (MTTR)— sometimes fixing issues before they impact critical apps and services.
Let’s explore the practical ways an AIOps strategy can be a differentiator for financial institutions:
- Ensure customer satisfaction. Modern consumers have grown to expect digitized products and services that continue to improve with the latest technological innovations. But the teams expected to deliver such innovations can’t work on forward-thinking initiatives if they are buried in a deluge of system alerts and consumed by fixes. By automating system monitoring and providing actionable insights into fixes, AIOps tools unlock valuable time for IT teams to conquer higher-level tasks that ultimately delight customers and build brand loyalty.
- Build cyber defenses. Financial services companies hold extremely sensitive consumer information, making them prime targets for cybercrime. As a result, the financial sector must keep pace with cybercriminals’ evolving tools and tactics to safeguard their systems and data. AIOps tools could be the answer, providing around-the-clock monitoring and continuously analyzing data across the IT stack to identify deviations from normal behavior. As the platform detects potential threats, it can flag this data for further investigation or prompt a series of defense tactics to protect the system from penetration.
- Streamline internal operations. Although most businesses in the financial sector focus their investments on consumer-facing technology, an AIOps strategy also benefits internal processes and enables growth. AIOps tools automate repetitive backroom processes in categories like compliance and accounting to maximize operational efficiencies, reduce costs and eliminate human error. AIOps can also improve internal security and manage risk. For example, just as an AIOps tool surfaces data anomalies that warn of potential security breaches, it can also analyze vast quantities of transactions to detect fraudulent activity.
I got to see some of these benefits play out when my company implemented an AIOps strategy for a $100 billion global financial institution. Continuous alerts plagued the company. To fix the issues, IT operations teams would look at their legacy monitoring tools, but there were multiple platforms, which led to siloed data and a lot of confusion. In the meantime, time would be ticking, and the company’s slow MTTR would result in revenue loss and frustrated customers.
Once our team expanded the company’s AIOps capabilities and implemented one integrated monitoring platform, its MTTR fell by 40% in just six months. And with a consolidated monitoring tool, the company’s tool footprint decreased by 50%, saving millions of dollars in licensing fees and reducing costs associated with maintaining and operating these tools.
In our increasingly digital world, technology is an essential requirement. But adopting advanced technologies like a comprehensive AIOps strategy can also be a differentiator in the market, providing a competitive advantage in improving customer satisfaction, safeguarding against cyberattacks and improving internal operations.