Finance Monthly August 2019 Edition

REGULATORY PRESSURE Firstly, banks are now obliged to report any IT issues to the Financial Conduct Authority (FCA), (and, as in the case of Which, using this data to form their report), IT problems are much more visible. There is greater recognition than ever before on how much serious disruption can be caused by IT outages at financial services institutions for people and businesses. The FCA now regards IT system performance as more important than staff performance. So if a member of staff is signed off of work, it is considered normal business, but if an IT system fails to deliver, it is viewed as a violation. Under regulations enforced by the FCA in August 2018, banks and financial services have to report on how they recover from outages within three months and have been mandated with a maximum acceptable time for systems to be down. They are so reliant on IT systems, it is critical that they take the necessary steps to ensure the business can get back up and running as soon as possible after an outage. INFRASTRUCTURE COMPLEXITY Secondly, knowing the true root cause of problems before taking any action is key, but a lack of proper infrastructure visibility is preventing banks from effectively managing the situation. With the inherent complexity of today’s hybrid infrastructure brought about by new procurements layered over legacy systems that are not necessarily cohesive, interoperability issues often ensue. The knock-on effects of systems fighting for resources during busy periods can cause latency issues, in turn seriously affecting the performance of business-critical applications. Here, it is not a matter of if, but when. With digital transformation, IT systems are now beyond human comprehension and require automation and AI- powered IT operations management (AIOps), also known as ‘algorithmic IT operations’, to run efficiently. Unfortunately, IT doesn’t have the investment or influence at board level that it shouldput theproper performance safeguards and assurances into place. The business insists that their customer-facing applications run as planned, but don’t really care who runs the IT infrastructure for them. They see the infrastructure as an overhead rather than a vital, profit-generating differentiator, giving a competitive advantage. LACK OF PERFORMANCE BENCHMARKS IN THE CLOUD Thirdly, the banking sector has been advised to embrace the cloud and is struggling to migrate applications, often written in the 1980s and 1990s, to a new platform. The cloud suppliers are reluctant to provide a service level agreement (SLA) on application performance, as they do not know the quality of application coding they will be hosting, so there is effectively no one fully accountable if problems occur. This means that at present, a bank can have its customer-facing applications slow down for an hour and as the cloud provider is not accountable, it is not in breach of contract. For example, performance issues can impact upon banking applications for customer transactions, and if that capability goes down, not only will it be difficult for the IT team to locate the issue and get systems back up and running quickly, there are also implications for the business reputation to deal with following such an incident. How can this imbalance be addressed? BRINGING INSIGHTS AND THE VALUE OF IT BACK TO THE BUSINESS Over the years, peoples’ perception as to the value of the IT infrastructure has eroded in the eyes of the business. This type of thinking is not unique to IT. For example, years ago people used to care about the engine in their cars, but now they just expect it to work and are really irritated if it fails. The same goes for domestic automation: washing machines, dishwashers, Over the years, peoples’ perception as to the value of the IT infrastructure has eroded in the eyes of the business. “ “ 25 www.finance-monthly.com FINANCE & BUSINESS - IT