IT failures in financial services sector: expert commentary

Comment from Venkatesh Varadarajan, Partner in Financial Services, Infosys Consulting: “In the last year there has been no shortage of news around banks’ IT glitches and outages. As we move to a cashless society and a tech-first financial world, banks need to buck their ideas up and improve their technology to support changing consumer behaviour. Those that fail to do so risk losing millions of customers to their competition.

“One of the key causes for the wave of IT system outages – leading to customers being unable to use their card – is the ageing legacy technology estates that banks have had to live with. Most banks have complex, monolithic systems, so scalability, reliability and quick responsiveness to technology glitches is a major issue for banks and payments companies.

“Outages have a huge adverse impact on customer satisfaction, loyalty and brand image for banks – and lead to increased scrutiny from the regulators. In the end, this leads to customer attrition in favour of the challenger players who offer a better customer experience backed by modern systems.

“To mitigate these risks, banks and payments providers need to move their technology estate to more digital-first, modern landscapes founded on a component-based architecture and enabled by APIs & microservices. The goal is a system which is more nimble and scalable with faster responsiveness to issues should they come up.

“Importantly, these systems need to be designed with customer experience at their core. They should also cater to the newer digital banking, cards and payments product innovations being launched. We can also expect to see a move to new forms of payments such as tokenisation, which will increase security and reduce reliance on the physical card.”