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Backing up the bank: No room for guesswork

Yorkshire Bank reveals five key challenges SMEs face in the year ahead

By Dave King, Product Manager at Future Facilities

As the world continues to work and socialise from their homes, we have never been so heavily reliant on functioning data centres. The banking industry has been unknowingly preparing for the current scenario we find ourselves in for years, with the rise of digital-first banking.

The latest Accenture Digital Banking Tracker showed digital lenders gained over six million new customers in the second half of 2019, with the global total reaching a staggering 19.6 million. This rise in adoption is only set to increase as all areas of society are set to increase their digital footprint.

As adoption continues to grow, the technology behind open banking develops, and demand for mobile services increases. The data centre is central to business continuity for banking organisations.

No room for failure

In our digital-first existence, driving adoption for digital banking tools is no longer a pressing issue. However, ensuring that these offerings are underpinned by long term profitability continues to be a challenge.

We’ve already seen digital banks having to deal with a range of IT challenges which stem from their chosen infrastructure decisions. Pioneering fintech start-up, Monzo, suffered in late 2019 as users lost visibility of their savings after an influx of customers requesting to receive their Christmas wages, through the “Get Paid Early” feature. It isn’t just start-ups feeling the strain though. On New Year’s Day, thousands of Lloyds Bank, Halifax and Bank of Scotland customers were unable to use online banking services due to an IT outage. Outages such as these cannot become commonplace in a world where so many depend on these services as standard.

These outages can be caused by a multitude of different reasons, but looking for ways to reduce the number of pain-points will deliver huge savings to banks. For example, Monzo reportedly spends 67% of all account costs on customer service. By having a more resilient back end however, these costs can be reduced as customers have few reasons to contact customer services.The data centre then, is essential to providing a quality customer experience, and any downtime will have serious consequences.

No room for inefficiency

There are various reasons data centres can experience downtime, but two of the most prominent are human error and energy failures. As established, downtime for banks has a huge impact on its customers, reputation and profits. In an independent report, commissioned by Future Facilities, it was found that businesses are losing over £120,000 each year to downtime on average, a figure that is growing and likely a lot more in the financial services sector.

To rectify this, banks must look to technology which helps data centres run more efficiently and reduces the chances of downtime. The latest trend supporting efficiency in the data centre is the introduction of the digital twin.

The digital twin is a full virtual model of a real object which can be modified to replicate the equivalent real-world impacts around all at the click of a button. In the data centre environment, the digital twin is enabling providers to explore different setups and layouts for their estate. Providers can then test the impact of any adjustments on the performance of the data centre.

Data centre performance is a delicate balance between capacity, efficiency and compliance. The use of a data centre digital twin allows operators to find the optimal balance to save energy and maximise performance. Once a setup has been found that achieves the desired results, it can then be implemented in the physical data centre itself, all safe in the knowledge it has already been rigorously tested in the digital twin. This process saves money both in designing and operating a data centre, and mitigates the risk of unplanned changes, improving the overall reliability of a business’s infrastructure.

Decision-makers need to actively search for data centre providers which use this approach for their hosted services and employ it themselves in their owned locations.

Room for change

The knock-on effect of reducing downtime equates to not only happy customers, but more time to focus on creating new features too. During a time where businesses and consumers alike are having to adjust to the new way we are living, banks need the ability to develop new functionality quickly.

As banks shift service offerings, they are at risk of stretching their infrastructure in unforeseen ways, as Monzo did with its aforementioned “Get Paid Early” feature. Our research found that three times as many businesses using a digital twin hadn’t seen an outage in a 12 month period, compared to those who didn’t use the technology. With its ability to save time and reduce outages, it is no surprise that over two-thirds of businesses expect to have a digital twin in place within the next 12 months.

As the banking industry is being challenged like never before, it is vital that back end infrastructure remains resilient. As customers become increasingly reliant on digital banking, preventing outages and quickly developing new features are key business priorities. Thanks to the digital twin, banks can achieve both these goals quickly and easily during these uncertain times.

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