I recently spoke at the 7th annual BankTech Summit in Hong Kong, and had a chance to meet with many of our customers who attended. Meeting with customers has always been the best part of my job, and in particular, hearing first hand war stories about their challenges. The stories that I've recently heard involve a common problem: mainframe and back end systems becoming overloaded due to the success of digital transformation.
For banks, one measure of the success of digital transformation is the percent of transactions that are done on digital channels and the percent of those that are done from a mobile device. Beginning in 2014, Akamai banking customers reported their mobile crossover point: that the number of transactions they were seeing from mobile devices was greater than from their desktop websites. Now, in 2016 some of our customer are telling us that up to 80% of their digital transactions are on mobile.
Along with that shift to mobile comes a new challenge: since the convenience of mobile banking leads to increased usage, can your systems scale to meet that demand?
And now for some war stories:
MIPS Offload: "Hey Rich, we did some analysis and found out that over 80% of our mainframe requests are duplicated calls for account summary, or other requests, from our web and mobile app, within the same user session. We are looking at how we can offload those MIPS."
Translation: When you log into your bank's web site or mobile app, your home page is your account summary page. In order to show the list of your accounts and their balances, a request is made down through all tiers of the bank's systems, to a mainframe or other core processing system. These are some of the most expensive systems within a bank, and those requests are costly. As you navigate through the website or app, you repeatedly come back to your account summary page, which repeats that very same request. The result: Over 80% of all mainframe requests, and presumably costs, are for repeat information. The cause: more demands made on core systems as a result of digital transformation success.
Tandem Backend: "Our core trading system is a Tandem computer from the 1980's running Cobol. We have been working for years to replace it, but in the mean time our institutional traders are being impacted."
Translation: Tandem Computers, founded in 1974, was the dominant supplier of fault tolerant systems for banks, stock exchanges, and other highly transaction oriented financial systems throughout the years. It was acquired by HP in 1997. Try finding an engineer to work on one, or a replacement memory board...
TPS throttling: "Our web and mobile users are exceeding our TPS capacity on our middleware system. We try to throttle, but the result is that some customers are getting failures, and end up placing a call to our call center."
No translation needed...
The realities of Digital Transformation:
Today, roughly 30% of all banking customers do banking on their phone. In insurance, roughly 10% of all new premiums are sold online today. What will happen at those rates double, or triple? If the above war stories are any indication, there is plenty of work to do in this industry to fully achieve digital transformation.
And now for a positive war story:
Successful launch: "Rich, I enjoyed your presentation, and I wanted to introduce myself. Our company just launched our new insurance web portal here in Hong Kong, and the number of visitors far exceeded our projections. This was a very important initiative for the company, and it was a great success. If we did not have Akamai in place, we never would have been able to handle it. Our capacity was no where near that level."
Translation: Akamai can play a key part in helping your company achieve its digital transformation business objectives.
Rich Bolstridge is Chief Strategist, Financial Services at Akamai Technologies