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Digitizing the Bank

Is your institution ready for the cashless economy?

By Mike Kane

Cashless payments are undeniably rising in popularity. In Sweden, only 20 percent of payments are made using cash. While the United States isn’t as far along in this process as those in Sweden, cashless payments are still on the rise. In 2013, the Federal Reserve Bank of Boston found that while noncash payments were steadily rising, cash still accounted for more than 25 percent of U.S. transactions. The good news is that this means there is time for banks to get prepared for the fast approaching digital banking revolution.

The Need for Digital

As the world becomes more digitized, consumers are going to demand more and more digital offerings from their banks and financial services. If consumers can grocery shop, book flights and pay bills all from their mobile phones, they’re going to want to manage their finances from their phones, too. This is evident with the use of Apple Pay. Among iPhone users, Apple Pay increased nearly fourfold in a year, growing from 12 percent to 47 percent. In the U.S., Apple Pay now claims 75 percent of contactless payments.

With these easy digital payment methods, cash is quickly being kicked to the sidelines and you don’t want your bank to go with it. Financial institutions need to be prepared to support electronic services through the digital supply chain. With the internet being the main link between consumers and digitally-connected banks, it’s absolutely essential that these banks understand how to employ an effective internet performance management strategy.

Don’t Ignore Internet Performance

At the most basic level, internet performance success can be defined as meeting customer demands and expectations through secure, fast, reliable and efficient assets via the internet. As banks create new applications and online services, they frequently realize that their data center architecture will not meet the demands of anywhere, anytime online service in an efficient, scalable and secure manner. Poorly matched online assets and services can lead to delays in loading web pages, which can turn consumers away from your bank and towards a competitor in a matter of seconds. In fact, according to Forrester Consulting, 56 percent of online bankers and brokers expect web pages to load in two seconds or less. Even Amazon revealed that sales decreased by 1 percent for every 100 milliseconds of latency. It doesn’t matter how big or small your bank is; your customers will not tolerate delays.

Aside from latency, outages can also be damaging for financial institutions. Not only does that prevent customers from accessing their financial data, but it also means your reputation is at risk. Performance issues raise doubts about quality and can damage the trust you’ve built with your customers.

Additionally, cybersecurity is a major concern to consumers, especially since data breaches make headlines almost daily. Data can be hijacked and delivered incorrectly if it’s misrouted through the improper Border Gateway Control  Traffic overloading threats, such as distributed denial of service attacks, are also used to knock websites offline and can distract IT teams while malicious agents steal data.

So what can banks to do ensure optimized internet performance and positive customer experiences as they offer more digital services?

Ensure Reliable Services

Few consumers are aware that when they connect with their financial services online, the content displayed is transmitted from multiple locations, including data centers, content delivery networks and cloud providers, which can often be hosted in different locations around the world. Consumers expect consistent experiences regardless of location and, therefore, it’s important for banks to have a strategy for controlling traffic from domain name system lookup to connection to the intended online asset. Whether a customer is in New York City or travelling abroad in Japan, they should be able to access their financial services and data securely and without delay.

Financial institutions will find that as they offer more digital capabilities, their customers will adopt them quickly. To ensure these new digital services can stay up and running even during times of peak volume, it’s important to plan for the best cloud, data center and CDN hosting vendors based on target customer locations. Vendors’ services may vary in speed and ability to securely deliver data to the intended targets, depending on location. If a bank only serves customers in the San Francisco region, then that bank must use providers that have high performance in that area.

There are internet intelligence tools that can help banks make these types of decisions and even monitor to see when and where their customers are experiencing latencies or outages. Monitoring is a big part of the optimized internet puzzle. If no one is watching to ensure online services are always up and running, there will be no way to know when something has gone wrong. Around the clock monitoring of internet performance is essential to a strong internet performance management strategy.

Banks manage sensitive financial data and offer services that no consumer can go without. For this reason, they must ensure they are enabled to handle the digital demands of today’s customers. Even the most loyal customers will only wait so long for an app to load while on the go and they are keenly aware of security compromises. If your bank can’t provide consistent, secure digital experiences via the internet, you’ll fall far behind as digital financial services and payments continue to be adopted. Is your bank prepared?

 

Mike Kane is senior manager at Dyn. For more information, visit www.dyn.com.

 

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