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Financial services warm to observability for enhanced customer experiences
Thu, 18th Jan 2024

According to New Relic's ' State of Observability for Financial Services and Insurance ' report, the financial services industry (FSI) and insurance sectors are embracing observability to enhance their digital customer experiences. The study found that FSI and insurance organisations are more likely to achieve full-stack observability as they modernise their tech stacks to provide cutting-edge services to customers.

New Relic's report was based on responses from 176 technology professionals and focused on the adoption and business value of observability across the FSI and insurance sectors. The findings show a strong understanding of the value of observability within these industries and a trend towards increased investment in it. Key factors driving this adoption include migration to multi-cloud environments (43%), artificial intelligence (40%), a heightened emphasis on customer experience management (35%), and an increased focus on security, governance, risk, and compliance (54%).

In the face of encroaching competition and consumer demand for superior digital interactions, traditional FSI and insurance organisations are accelerating their digital transformations. Observability, providing end-to-end visibility across intricate tech stacks, is a key tool for engineers modernising operations while maintaining strict compliance with evolving regulations.

Peter Pezaris, Chief Design and Strategy Officer at New Relic emphasises that the success of traditional financial services and insurance companies hinges on their capability to establish a seamless, dependable, and effective digital interaction with customers. He said, "The livelihood of traditional financial services and insurance institutions relies on the ability to create a fluid, reliable, and efficient digital customer experience."

Kris Day, Senior Vice President and General Manager of New Relic, Asia Pacific and Japan, highlighted the role of technology in the face of geopolitical uncertainty, regulatory advances, and inflationary pressures. He emphasised, "Maintaining a laser-sharp focus on providing a great digital customer experience is crucial for organisations to unlock potential for growth in the current climate."

The report provided additional insights, indicating that FSI and insurance organisations often have more complex tech stacks requiring specialised observability tools. Compared to other sectors, financial services and insurance organisations were 15% more likely to have achieved full-stack observability, with 38% reporting this level of visibility. These organisations have also more widely deployed capabilities critical to their backend and core banking systems operations, such as infrastructure monitoring (75%) and application performance monitoring (63%).

Additionally, the report found that these sectors are prone to fewer high-business-impact outages than others, with only 30% reporting these incidents at least once a week, compared to the average 32% among all respondents. They were also quicker to detect such outages, with 40% taking at least 30 minutes to do so as against an average detection time of 44% across all industries. The report suggests that with these sectors more inclined towards full-stack observability, their ability to respond to and resolve high-business-impact outages improves.