How Banks Gain a Competitive Advantage in the Digital Age with Capacity Planning
Though a suite of reliable web services has become crucial to the success of nearly every kind of business, there’s no place where the stakes are higher than in banking and finance.
We all get frustrated when a social media site is over capacity. We might even take our business elsewhere when a retail site crashes, preventing us from placing an order. But imagine what would happen if a bank’s online services — the ones that help us transfer and save our hard-earned money — were to shut down without warning?
This kind of disaster could lead to regulatory fines, panicked customers, and even major financial crises. That’s why banks, more than perhaps any other kind of business, need to be prepared for all possible scenarios and contingencies to prevent their services from ever becoming unavailable or difficult to use.
There is no silver bullet or design hack for these kinds of disasters — preventing them takes capacity planning, and if customers are going to trust your services over a competitors’, you’ll need to demonstrate that you’ve mastered it.
A recent Gartner Report, titled “Market Guide for Capacity Management Tools” and published in January of this year, states, “Through 2018, more than 30% of enterprises will use IT infrastructure capacity management tools for their critical infrastructures to gain competitive advantage."
For banks, that means that some companies are hoping that their 24/7 availability online will help them edge out other players still prioritizing the brick-and-mortar banking experience.
These hopes are far from unfounded — foot traffic at bank branches is decreasing by an average of 10% each year, and a good 80% of customers now use some form of online banking. With that preference for web-based finance comes heightened expectations that these services work consistently and perfectly.
This makes the field of financial technology, or FinTech, an exceptionally competitive one. All it takes is a single outage to send thousands of customers elsewhere or to incur tremendous fees from regulators.
To ensure that both your reputation and compliance are upheld, you’ll need to be able to accurately predict and analyze demand for services in real-time, anticipate problems before they occur, and have a precise sense of your IT infrastructure’s capabilities at all times.
Banks handle a monumental amount of data coming from a variety of different sources every day. Because they can’t simply put operations on hold while they optimize their IT infrastructure, banks must feed all this data into predictive models if they’re going to accurately forecast how a new service will perform during peak demand and avoid outages.
The problem for many banks is that the systems they’ve been using have been in place for quite some time, and can’t simply be replaced without suffering through massive periods of downtime. These systems were often designed before the advent of smartphones and tablets, making them ill-equipped to receive or analyze demand coming from such devices.
Cloud computing offers these institutions a viable solution. Through the use of a third-party cloud provider, banks can start storing data from all platforms and devices on remote servers, freeing up their legacy systems from demand they are often unable to process.
That’s why the capacity management tools banks use must not only provide real-time data, but support the software of all different kinds of cloud providers and mobile platforms.
The world of banking and finance continues to shoulder an incredible burden as essential players in the global economy, and the demand being placed on it is only getting larger. Perhaps the most important thing for today’s financial institutions is to have a holistic perspective on the entirety of their online operations.
As the wealth of data banks are being asked to handle grows larger and larger, getting a comprehensive perspective of your business is essential to ensuring optimized performance at all times.
As the demands of customers change, so will the banking industry — but that doesn’t mean the major players must fall to more agile upstarts. The competitive landscape is changing, but the banks that will continue to dominate are the ones who can predict future shifts, not scramble to address new ones.
(Main image credit: Daniel Foster/flickr)