New Relic has revealed the findings of its State of Observability for Financial Services and Insurance report, which focuses on the adoption and business value of observability across the financial services industry (FSI) and insurance sectors.
The report is based on insights derived from 176 technology professionals in association with the 2023 Observability Forecast.
Findings show that organisations in the industry understand the business value of observability and are investing more in it.
The top trends driving adoption include migration to multi-cloud (43%), artificial intelligence (40%), an increased focus on customer experience management (35%), and an increased focus on security, governance, risk, and compliance (54%).
Traditional FSI and insurance organisations face an accelerated transformation driven by increased competition and consumers expecting a higher level of digital interactions and access to services without depending on physical services.
To keep organisations secure and compliant with new regulations while modernising and innovating at a rapid pace, engineers rely heavily on observability to ensure end-to-end visibility across complicated tech stacks.
“The incumbents are in a race to remain relevant amidst a flurry of trends like fintech, insurtech, automation, artificial intelligence, cloud, mobile, and digital native,” said New Relic Chief Design and Strategy Officer Peter Pezaris. “The livelihood of traditional financial services and insurance institutions relies on the ability to create a fluid, reliable, and efficient digital customer experience (DCX). Observability provides real-time visibility into their infrastructure and software architecture while opening the door to more accurate decision-making, accelerated innovation, improved system uptime and reliability, and the ability to rise above the competition.”
“For financial services and insurance providers in Asia Pacific, the year 2024 will once again require technology to play a major role, as we expect positive transformations amidst geopolitical uncertainty, advances in regulation and inflationary pressures. 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,” said New Relic Senior Vice President and General Manager, Asia Pacific & Japan, Kris Day. “Investing in observability will ensure organisations are able to continue their journey in innovation while guaranteeing comprehensive visibility into their systems.”
As FSI and insurance institutions turn to observability, the New Relic State of Observability for Financial Service and Insurance report reveals:
Complex Tech Stacks and Digital Customer Experience Have Institutions Going All In
Today’s financial services and insurance organisations tend to have more complex tech stacks and breadth of integrations with middleware, cloud platform as a service (PaaS), and mainstream platforms. This complexity drives the need for visibility into everything that could affect the customer experience. Compared to other industries, financial services and insurance organisations are 15% more likely to have achieved full-stack observability, with 38% having full-stack observability.
To further strengthen their ability to create customer-centric services and an optimal DCX, financial services and insurance organisations more widely deployed capabilities that are critical to their backend and core banking systems operations, such as infrastructure monitoring (75%) and application performance monitoring (63%). This enables them to build and maintain trust and loyalty with their customers by creating an easy and reliable connection across any device for day-to-day operations, such as selecting providers, quickly opening accounts, or simply checking their account balance.
Strong Resiliency and More Spending Leads to Less Outages
Regardless of industry, outages leave organisations at risk for considerable downtime. However, financial services and insurance organisations have traditionally had strong resiliency in their systems and a relatively slow pace of change and software developments, which supports their ability to respond to and resolve high-business-impact outages.
The financial services and insurance industries experienced fewer high-business-impact outages than many others, with 30% reporting these outages at least once a week compared to the average 32% among all respondents. Furthermore, their time to detect a high-business-impact outage average was less than other industries. Two-fifths (40%) of respondents in the industry said it takes at least 30 minutes to detect high-business-impact outages compared to the average of 44%.
With financial services and insurance organisations more likely to invest in full-stack observability, their ability to respond to and resolve high-business-impact outages increases compared to those who have not achieved full-stack observability.
You can read the full report here.
