PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Navigating the Challenges of Banking Apps in a Digital Society

By Jon Lucas
April 2, 2024
in Banking, Emerging Payments, Featured Content
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
How Banks and Payment Solutions Can Unleash First-Party Data Safely, mobile users, mobile banking apps

How Banks and Payment Solutions Can Unleash First-Party Data Safely

There’s been a surge of issues with banking apps over the past year. Even customers of major banks are reportedly facing unprecedented incidents, including delays, errors, and downtime. Last year, Zelle experienced its second outage in only six months, leaving thousands of its users stranded in financial darkness.

As banks continue to encounter similar issues, customers may wonder who to switch to. More importantly, the question arises: why is this happening now? Banking apps have been around for years without such issues, so what’s changed? And what can banks do about it?

Times Have Changed

It’s important to set the stage first and examine how our surroundings have evolved. We live in an increasingly digital world, where the traditional practices of cashing checks and using ATMs for balancing inquiries are fading fast. Nearly everything now happens within mobile apps. We demand seamless access to our personal finances—from conducting transactions to transfers, checking balances, investing, and more.

It’s all accessible on our phones.

However, this new landscape also introduces fresh challenges. When it comes to app  crashes, the primary culprit seems to be timing. These downtimes and outages tend to coincide with payday, suggesting that the servers become overloaded with a surge of traffic with a short period of time, leading to crashed.

Any interruption in service for such a vital tool can prove disastrous for both banks and their customers.

Problems on Payday

Some banks might underestimate the significance of a few days offline in an otherwise online month. After all, occasional app downtime due to issues or maintenance is not uncommon. However, for banking apps, these few days of downtime coincide with massive spikes in traffic, precisely when people need access to their money the most.

As a result, banks suffer from a loss of customer confidence, declining brand ratings, and face reputational risks. According to a Ponemon Institute study, even a single minute of downtime can cost a business an average of $9,000, bringing the cost per hour to more than half a million dollars. Such losses prompt longstanding customers to terminate their contracts and transfer their accounts to competitors. The damage to the bank’s overall standing can be devastating, especially given the challenge of establishing and maintaining a customer-first image and reputation.

It’s not just banks and apps facing these challenges. According to PCR, 57% of digitally native millennials immediately form a negative impression of a company’s brand due to website downtime. What’s more, one in three consumers switches to a competitor’s website within 30 seconds if their preferred brand is experiencing downtime.

If the standard is that low for e-commerce, imagine what it’s like for personal finance.

What Banks Can Do to Reduce Downtime

The solution to the issue of downtime occurring due to payday spikes lies in the cloud.

Cloud infrastructure offers capabilities for proactive, on-demand scalability without having to maintain large volumes of idle resources. This lets banks adjust their resources based on what they need, proactively scaling up when it gets busy and down when things are quiet.

Of course, this doesn’t mean banks should choose a cloud solution randomly. Each bank will have needs and IT necessities requiring a specific cloud solution, so it’s essential to have a comprehensive understanding of the options before beginning the process. Hybrid and private cloud solutions can provide the security and control of a single tenant environment, with the scalability and flexibility of cloud technology. Additionally, it’s important to understand that while the cloud can mitigate outages significantly, it cannot eliminate them.

Still, the choice between mitigating downtime and ignoring the problem is no choice at all. The digitalization of our society has barely begun and banks that want to keep up must adopt a dynamic cloud solution to handle the relentless advance of technology and transactions.

Conclusion

Banking app downtime equals a significant loss of customer confidence. For banks, trust is everything. It’s not an exaggeration to say that mitigating app downtime—especially around payday—should be among the top priorities for any bank in the 21st century. Those who ignore it will fall behind, while those who take it seriously will gain an edge over their competitors.

That said, switching cloud solutions will mean a significant investment in IT, either by growing an internal team or partnering with a managed cloud provider. But, that investment is still a small price to pay, considering the alternative.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: cloud solutionsDigital Bankingmobile appsZelle

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    Proof That Fintechs Are Disrupting Banks:

    In Today’s Fintech Market, Value Is Everything

    August 30, 2024
    DFAST test

    Dodd-Frank Stress Tests: Good News for Now, Watch for a Rugged 2025

    August 29, 2024
    Real-Time Payments Adoption in the U.S. Requires a Pragmatic Approach, ISO 20022 messaging challenges

    ISO 20022 Brings the Challenge of Standardization to Swift Participants

    August 28, 2024
    open banking small banks credit unions

    Open Banking Can Be an Equalizer for Small Banks and Credit Unions

    August 27, 2024
    Payments 3.0

    Achieving Seamless and Holistic Transactions with Payments 3.0

    August 26, 2024
    embedded finance, ecommerce, consumers reduce spending

    Quality Over Quantity: Key Priorities in the Payment Experience

    August 23, 2024
    bots fraud

    Next-Generation Bots Pose Formidable Fraud Challenge

    August 22, 2024
    crypto custodians

    Crypto Custodians Could Bring a Revolution in Holding Assets

    August 21, 2024

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Digital Assets & Crypto
    • Debit
    • Digital Banking
    Menu
    • Commercial
    • Credit
    • Digital Assets & Crypto
    • Debit
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    Menu
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    Menu
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result