The Three Second Rule: Is your bank rising to the 4G challenge?

Amidst the commotion of today’s constantly connected world, money never sleeps, so neither can banks. Rapid advancements in mobile technologies and superfast 4G connections have ramped up the pressure. Banks now need to ensure that customers are able to interact with their accounts wherever and whenever they want to, through any channel they choose, within seconds, argues Ian Clarke

Against the backdrop of the amazing changes in internet technology, 24/7 banking has emerged, and the applications and technologies that support these services have become the beating heart of today’s global banking institutions.

In the past, people would have to go to the bank to manage their finances, but now the bank can go to them. The arrival of internet banking revolutionised the playing field, and the focus has now shifted to mobile banking. Today’s consumers are technologically-savvy, with smart devices and superfast 4G network connections that allow them to process gigabytes of data at the swish of a finger. Consumer confidence in the security and reliability of mobile banking continues to improve, and new solutions such as mobile payments and mobile wallets are more widely adopted. Given this trajectory, it’s a safe bet that mobile will continue to be a core pillar of any banking offering and that the number of transactions being carried out on mobile will continue to soar. In fact, a recent article in the Telegraph reported that 81% of people use online banking and 20% use mobile banking once a month or more; but only 45% will visit their nearest branch once a month or more.

If they are to remain competitive in an age where customer loyalty is open to the highest bidder, the banks must ensure they have a strong mobile offering. In fact,more than half of people residing in the UK claim that online banking services are critical to bank loyalty, according to the Telegraph article. Today’s consumers also have high expectations, and it is no longer good enough to just have a mobile version of your website: our research indicates that the overwhelming majority (85%) of consumers prefer to use mobile apps over websites that have been optimised for mobile devices. Added to this,there are very high expectations for these apps, with four in five expecting them to launch within three seconds, or less. Banks that fall short of these expectations can expect to see higher churn rates, as a further study from Google found that one in six people have changed banks as a result of a poor mobile banking experience.

So we can see that expectations are rising in tandem with usage, putting a lot of pressure on the infrastructure underpinning these new services. Whilst the majority of mobile banking solutions are likely to be hosted on modern technology platforms, such as the cloud, they will still rely heavily on the sturdy, old-school mainframe.As a result, this mobile revolution is not only driving development costs for creating innovative new customer-facing applications; it is also driving up mainframe MIPS (million instructions per second) consumption due to increased usage. As one of the largest infrastructure expenditures that banks have to pay for, the total cost for delivering mobile banking services to customers can be drastically increased as a result of this rise in MIPS consumption.

Move over mainframe? Don’t bank on it

Aside from the rise in costs, meeting consumers’ escalating expectations is also a huge challenge. Modern mobile banking services rely on a range of new and old distributed technology platforms working in harmony together, making them far more complex to manage. Whilst mobile banking applications themselves will more than likely sit in the cloud, most banking customer data remains on mainframe databases. This means that for a mobile banking application to work, it still needs to connect back to the mainframe to access the data it needs. As well as extending the application delivery chain between the end-user and the bank, this also forces legacy mainframe applications to interact with a new generation of mobile banking applications; technologies that hadn’t even been thought of when the mainframe was originally created. As a result, it’s very difficult to ensure that these modern applications are optimised and running seamlessly with existing legacy systems and infrastructure; meaning there is an increased risk that errors will occur. As the mainframe is now supporting a variety of modern applications, including customer facing services, the impact of such a failure has much more visible implications; having a serious impact on a bank’s reputation and brand, as well as hindering their ability to compete in the market.

Adding to the complexity challenge is the fact there is a growing skills shortage in the world of mainframe programming. The people who wrote the original code for legacy mainframe applications have started retiring and the new wave of developershave honed their craft using modern interfaces and technologies;meaning modern applications often aren’t designed to work in harmony with the existing legacy infrastructure. As a result it is all too easy for inefficiencies to slip through the cracks, driving up MIPS consumption and increasing the risk of technology failures. The combination of the mainframe skills shortageand the increased complexity of banking technology environments not only leads to problems occurring more frequently, but it alsomeans that they take longer to resolve; leaving customers frustrated by poorly performing services.

Putting the mainframe on the mainline

Bank IT departments need to future-proof their mainframe application development processes, ensuring development teams are not only functional, but also high-performing. Performance needs to be front of mind if banks are to meet customers’ expectations. To ensure data is available through a mobile application within three seconds, distributed application teams need to optimise their applications to integrate seamlessly with the mainframe. Banks also need to be able to shine a light into the impenetrable black box that is the mainframe, to identify and remedy any potential performance issues before they impact customers.

By adopting a transaction-based approach to application performance management, banks can track the path of the entire process required to deliver mobile and internet banking services to end-users; from the mainframe, through the cloud and right up to the end-user’s screen. As such, banks can optimisetheir mobile banking applications, reduce CPU consumption, and improve response times;whilstlowering the lifetime costs of applications. This will ultimately underpin a better customer experience, drive a stronger competitive advantage and create new revenues.

Ian Clarke is Director of Mainframe Solutions, Compuware