According to experts, banks need to routinely evaluate the scalability of their digital banking services.
This occurs at a time when concerns about data failures have inundated the twitter accounts of numerous banks. The largest lender in India, State Bank of India (SBI), announced on Monday that a technical issue had affected parts of its digital banking services. Although SBI was able to fix the problem, recent outages also affected DBS Bank and HDFC Bank services.
“These outages frequently occur during month-end, quarter-end, or year-end when transaction volumes exponentially increase, or when an application is upgraded (usually for customer-facing channels like online banking, mobile banking, etc.). Products and services that are enabled on these channels are then affected or degraded. According to Asim Parashar, partner at PwC India, “either the IT infrastructure reaches capacity utilization or the application itself has issues handling huge, concurrent volumes, or it could be caused by a mix of both. “Continually evaluating resilience and scalability for their applications (transaction processing and payments) and underlying infrastructure is required.”
Most financial transactions over these channels are carried out using the unified payments interface. According to the most recent information from the Ministry of Electronics and Information Technology, there were 91.9 billion digital transactions made between April and December, up from 20.7 billion between April and March of last year.
Although banks have been concentrating on technology investments to improve customer experiences and streamline operations, experts said a more concerted effort is needed to handle the volume of increasing transactions.
There are two sides to it. First of all, the workload is growing, and secondly, nobody is aggressively investing. There are gaps in the implementation of graceful degradation models, improper sizing, and a lack of systematic and proactive load analysis. The number of online transactions may have multiplied by five in the previous five years. However, there have been no investments made in digital infrastructure to support this. People may be investing cautiously because the increase in transactions hasn’t really improved the bottom line, according to Muraleedhar Pai, executive director of Maveric Systems.
“Banks are now spending money on technology in a reactive manner. Chief financial officers in banks would want to spend less on digital infrastructure because it doesn’t significantly improve either the top or bottom lines, he continued.
Banks’ current technological infrastructure is mostly uninnovative. The workers at banks must be sufficiently trained to manage and resolve any technical issue in real time. They must also be given the tools they need to do so. Additionally, according to experts, banks need to continuously invest in order to monitor full business transactions.
Given how essential banking is to a customer’s daily operations, technical problems and mishaps are likely to have a big impact, including a leak of their private information. In order to address and lessen the frequency of such outages, banks and lending companies must take appropriate action, including investing in the required technology resources and security measures, according to Namita Viswanath, partner at IndusLaw.
Bankers say it will take time for banks to scale up their digital banking procedures because each business has different requirements.
The scale is highly erratic. While we consider it from the perspective of March 31, I am aware that the IPL also began on that day. Transactions in the Dream11 fantasy cricket game also occur when the IPL begins. You will plan for more transactions during IPL as a bank. These events may occur at a specific time. Scale varies greatly depending on the institution. On their internet gateway, some institutions may have grown in size, but not on the backend. On the backend, some companies may have grown significantly, but not at the internet gateway, according to the chief information officer of a major private bank who spoke on the record.
“To sum up, the unpredictable nature of scale is proving to be a significant problem for banks. You cannot directly scale in this location; it takes some time. One can end up spending a month or one could end up spending multiple months, the person who was mentioned above noted, depending on the quantity of investments that have previously been made.