Banks Must Address Lack of IT Visibility to Maintain Competitive Edge

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Many banks and financial service institutes today are looking to more digital strategies to stay relevant and competitive in today’s market. In fact, one study by Kyndryl found that 70% of financial service executives are shifting to digital.

But digital transformations are not simple, especially in today’s turbulent economy, with rising interest rates and major issues with fraud, amounting to more than £1.2 billion stolen in 2022 alone. Not to mention the aging legacy systems, pressures to decrease capital expenditures, and drive to more efficient operations.

Before venturing into a digital transformation project, banks need to first gain visibility into what’s in their “dark estate” – or the areas of their IT environments where costly inefficiencies and poor end user experiences hide. By understanding the dark estate and its many blind spots, bank IT teams can help their organisations be more proactive, manage costs, and serve employees – and therefore customers – better.

More banks and financial institutions appear to be on this path to illuminating their dark estates, as evidenced by the 25 contracts the Lakeside Software team secured in the financial sector during the first half of this year. Notable efforts to gain better visibility that we have experienced include one of the largest banking institutions in the U.S., an international investment management firm, a trusted regional credit union, and one of the largest mutual companies.

In the financial services industry, any technology disruptions or downtime can mean significant money loss. For example, imagine the loss if a trader’s laptop crashes while making a deal right before markets close. Depending on the size of the deal, millions could be at stake. Imagine now if the IT team had visibility into the health, performance, and usage of all traders’ laptops and could prevent a disruption before it happened or push necessary updates outside of trading hours.

A proactive IT approach can have wide-reaching impacts across the organisation, but firms need a comprehensive understanding of their IT infrastructures and this is contingent upon capturing in-depth endpoint data to inform decision making. In another example, one bank with high service desk call rates saved approximately $300,000 per year by detecting and resolving technology issues before they impacted key personnel.

Banks can also leverage artificial intelligence to accelerate proactive IT strategies. As AI permeates the financial sector, firms can automate the discovery of IT issues and use generative AI to propose fixes or even notify employees via Teams, Slack or other tools they use to do their jobs every day.

By bringing data collection, analysis, and intelligent support together in one place, average repair time and ticket escalation rates are reduced. With this optimised IT infrastructure, teams can improve root cause analyses across every employee device to detect issues in real time, determine the number of employees affected, and incite auto-repairs. Once a case ticket is closed, IT teams can then use the automated systems to gather feedback and performance details to troubleshoot problem areas and inform auto-fixes down the line.

Another blindspot often hiding in the dark estate is device underutilisation as well as unused software licenses. Indeed, a New York City-based bank implemented a device management strategy to optimise device lifecycles, reduce unnecessary replacements and associated costs, and realised it did not need to replace 91% of its laptops planned for annual refresh.

Many banks currently rely on a calendar-based hardware refresh. Every 3-5 years, the IT team will retire certain laptops only because of age. Instead, banks should be taking a needs-based approach to maximise hardware investments. With comprehensive health, usage, and performance data coming from each endpoint, IT teams can identify which devices actually are ready for replacement and which are still working well.

The same is true of software utilisation. With visibility across the IT estate and accurate, real-time data, banks can identify which end users are using which software. No more do banks need to invest to purchase software firm-wide. Instead, they can have a customised approach so that each employee gets the right device and software they need to perform their job.

The rapid operational pace and the competitive landscape in the financial industry requires bankers, traders and other major stakeholders to make quick decisions. In support of this, IT teams can create customised views to develop a better, more comprehensive understanding of user behaviours, technology performance, and overall digital health for different user groups.

Armed with this information, IT support services can be tailored specifically for departments that are not utilising technology effectively to increase productivity. For example, an investment management firm offered differentiated services and role-based environments for traders, bankers, and agents, eliminating potential revenue loss due to failed financial trades.

Offering differentiated services based on roles improves the overall digital employee experience. Poor digital experience impacts retention, engagement, recruitment, and productivity. A bad digital employee experience will eventually lead to poor customer experiences and distrust. As a recent Forbes Technology Council article on digital-first banking put it, “In our modern, connected world, putting the customer first requires a comprehensive digital engagement strategy.”

As financial institutions navigate transformations to digital strategies, they must address their own IT blindness to curb additional losses and remain competitive. When banks take a proactive approach to IT management, they are better prepared to prevent and mitigate financial loss or downtime due to technical issues caused by aging legacy systems and infrastructure and digital transformation initiatives. An emphasis on IT visibility will reveal areas where changes can be made to streamline costs in a bid to support growth and profitability.

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