The business value of actively monitoring financial networks

Active monitoring of application and network performance boosts productivity, diminishes downtime and reduces the cost of data breaches and network slowdowns

Instant gratification has become an expectation for today’s consumers. We all know that applications need to be fast and always available. That’s why most organizations actively monitor the performance of their most important applications and take action if performance degrades.

As providers of banking and financial services, customers and employees rely on critical financial and web-based applications and business services for important transactions, investment decisions and daily productivity.

Banking IT teams have to measure wide area network (WAN) performance with improved edge visibility looking specifically for latency and jitter to deliver performance to end users at remote branch sites. Banks that are planning to migrate sites to SD-WAN must carefully plan change and actively test that the network is working and measure real-time end user experience of application performance.

When peaks in traffic cause performance degradations or microbursts occur for a very short time (microseconds), banking and payment transactions can be lost or require retransmission, which has significant negative impact on the business.

For business-critical applications, such as their mobile banking app, virtual desktop infrastructure and databases, California-based Farmers & Merchants Bank experienced inconsistent application performance across different branch locations. Using active monitoring they were able to determine that these microbursts were the cause of broadband network retransmissions, packet congestion and, ultimately, substandard application performance. This allowed them to go challenge their network provider to improve performance based on their service level agreements (SLAs). You can read the full story here.

Microbursts are transient and can go undetected when monitoring tools are not granular enough. In the future, with more automation, real-time interpretation of data using machine learning and AI and real-time granular active monitoring will be even more important for financial services and insurance. companies.

How active monitoring works and why it’s so valuable

Active monitoring, or high-definition network testing, performs end-to-end monitoring between nodes. It basically simulates traffic by sending synthetic packet data to multiple endpoints across your network and allows you to see the potential problem areas before they affect users.

Active monitoring takes a proactive approach to network troubleshooting by highlighting potential problem areas before they affect the end-user. Because they are easily deployed as software in distributed, hybrid architectures, active monitoring sensors also allow you to target specific areas of the network, enabling you to see how new connections affect network performance.

That proactive analysis is precisely why active monitoring is fundamental for finance network teams. Because it does not require an outage or degradation to alert you of problems, you can identify hidden microbursts and issues long before they cause latency and impact business and end user productivity and satisfaction.

Network teams should ensure active performance monitoring supports microburst detection as short as 1 millisecond, precise one-way delay and latency measurements over large-scale networks, and real-time reporting and per-second performance metrics.

Putting numbers on the value of network performance to financial services

The Centre for Economics and Business Research (CEBR), commissioned by Accedian, has developed insights around the economic impact of application and network performance across various industries including the financial sector in the United States.

Network and App Performance Management to contribute a gross value add of $7.6 billion to the finance & insurance sector by 2024.

CEBR & Accedian Report, 2020

As part of the research, Accedian investigated the total impact of proper network management on the overall US economy. The numbers are particularly striking within the financial and insurance sector: a gross value add of $7.6 billion by 2024. This makes intuitive sense as every transaction creates a digital footprint, and there is a decades-long trend of shifting more of the financial services business towards technology.

NAPM is expected to offset $230 million of worth of data breach fines by 2024.

CEBR & Accedian Report, 2020

So where does this economic benefit come from? The answer is, surprisingly, people.

Overall, network and application performance management represents a 3% productivity boost for individuals working within the financial services sector. This is a sector with more than 6 million people in the United States at the end of 2018, so the aggregate impact of this single digit is significant – it ultimately results in a productivity boost of 7,700 JPMorgan Chase employees alone, for example!