THE BUSINESS SIGNIFICANCE OF POORLY PERFORMING BUSINESS APPLICATIONS

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2 The traditional granite face of the financial services industry has rapidly evolved into a complicated, highly competitive and dynamic portrait of change. No longer an institution with multiple branches and ATMs, today s banks service huge numbers of customers through online channels. In fact, the Internet is quickly becoming the preferred way to access personal financial information and execute transactions. According to a recent survey by Forrester Research, 57 percent of Internet-using U.S. adults bank online and 36 percent of adults with an investment account manage it online. 1 As a result of the increasing online business shift, financial institutions must manage an extended global application delivery chain one marked by variability, high volume and complexity. How do financial institutions successfully service their customers amidst all of this? Oftentimes, not very well. And the impact is significant on customer satisfaction. In a recent study, customers were asked how they would respond to an online banking application that performed poorly. 2 Thirty percent would be less likely to use additional services from the financial services organization. Eighteen percent would tell family, friends or communicate their dissatisfaction via Facebook, a blog or Twitter. Thirteen percent would use another financial provider. Seven percent would close their accounts. When your organization is unaware of the experience that your customers are having with your institution, you increase the risk for: poor customer satisfaction loss of immediate revenue and customer lifetime revenue lost opportunities to cross-sell or up-sell negative brand impact, which can be difficult to recapture That s the bad news. The good news is financial institutions have the opportunity to differentiate themselves, by improving their customer experience in key delivery channels, such as online, mobile and branch operations. This paper discusses the impact of application performance to improve the experience customers have with your institution, creating a compelling competitive differentiator. LOST BUSINESS AND HIGHER COSTS When customers can t conduct business with your financial institution because of sluggish or stalled application responses, they may abandon the transaction or even take their business elsewhere. Poor application performance can cost you the potential lifetime value of a customer. Customers may also turn to your tellers or support center, where providing a level-one service or resolution can cost you up to $24. 3 Worse yet, poor customer experience publicized on the Internet or social media can negatively impact public perception, your brand and shareholder value. THE BUSINESS SIGNIFICANCE OF POORLY PERFORMING BUSINESS APPLICATIONS A homeowner who needs to move money from savings to checking to cover the mortgage payment has trouble accessing the online banking application. Frustrated, and not wanting to incur a late fee, the homeowner goes to a higher-cost channel, a branch office, to make the transaction. Before making a purchase, a shopper checks her checking account balance using her smartphone. After several minutes, a message says the information isn t available, and she s forced to abandon her purchase. Feeling that her bank is unreliable for such a simple task, the shopper makes a note to ask her friends which bank they use. An online trader runs a transaction from his desk. He submits a sell order to avoid taking a loss. Halfway through his transaction, an error screen indicates the sale transaction didn t process. The company takes a loss and he calls technical support, which is unable to identify the cause or source of the problem. A customer with a $20,000 credit card balance logs into an online banking portal. Instead of receiving a cross-sell offer to turn that debt into a home equity loan, the application times out during the back-end business logic process. The customer sees only an error message and the bank s opportunity is lost. 2

3 THE ORIGIN OF PERFORMANCE ISSUES Business applications are delivered to your customers from many sources, including your data center, application tiers, a service provider s backbone and connection points down to your customer s device or browser. Any and all of these sources can experience problems that slow performance and take your customer from a satisfactory interaction to complete frustration. Why are banks and other financial institutions so vulnerable in this area? Think of the complexity of your institution s application delivery chain, from your organization to your customer. Increased complexity in your data center is the result of multi-tier architectures, web services, mobile apps and WAN optimization. Virtual and physical resources are mixed in most data center environments. Monitoring hardware is less effective than in physical-only environments, and traditional tools cannot monitor virtual servers. Most data centers have now moved beyond three-tier architectures to n-tier, with some having 10 to 20 tiers. Most large organizations have multiple data centers, adding to the complexity. What s more, the Internet is more complicated than it used to be. The mobile explosion forces institutions to deal effectively with mobile carriers and devices, including smartphones and tablets. A wide variety of browsers complicate application performance. It used to be easy: Everyone used Internet Explorer (IE). Now there are many versions of IE, each one works differently than the others. And, Firefox, Chrome and Safari are all grabbing their own share of the market. Both customers and employees live at this edge of the Internet, using all of these browsers and devices. It s not just the data center and the web that are more complex. Industry analyst, Garter, Inc. is seeing a shift in attitude toward cloud banking within financial services, with 39 percent of those surveyed expecting more transactions supported by the cloud by Because the cloud is opaque, cloud-based infrastructure also impacts application performance, and this has implications on the way you monitor your business processes. All these factors combine to create complexity at the edge, where your customers are located. And, customer expectations continue to rise. Financial customers now anticipate service wherever they are located and from any device they use, including browsers, mobile devices or ATMs. With so many points that can slow or prevent application access by your customers, it can be nearly impossible to accurately monitor performance or quickly pinpoint and resolve problems. Yet we know that the key to ensuring customer satisfaction and retention in online banking is to guarantee fast, uninterrupted application service for every customer. So how can you ensure rapid application performance and reliability when facing the complexities of today s application delivery chain? DEPLOYING A NEW GENERATION OF APM DRIVEN BY END-USER EXPERIENCE Many financial institutions struggle to proactively monitor and manage their application delivery chains. But, traditional APM methods fail because they are reactive rather than proactive. Problems can be identified only after they have impacted the customer. In fact, most application access issues are reported by customers, not found by proactive monitoring. Another weakness is that traditional APM tools provide only partial coverage, leaving organizations with huge blind spots. If you are monitoring only servers or some outside services, you re not getting a complete picture. Traditional monitoring tools may show you green lights, letting you believe everything is okay, but in reality, your customers are seeing red lights. These blind spots can cause problems you don t even know about. A new generation of APM capabilities is required to help you manage this complexity. These tools will not only differentiate you from your 3

4 competitors, but they can also help increase your agility to rapidly respond to issues that impact your customers. This drives a better customer experience and ultimatley contributes to growth and revenue. What are the capabilities to look for when evaluating APM solutions? Test and monitor applications the same way your customers interface with them. What applications are they accessing? How are they doing it (smartphone, browser type)? What location are they at, and what is the quality of service at that location? Measure the impact of the issue, then prioritize it based on the impact it will have on your business. How many users is this problem affecting? Is it a critical transaction involving the transferring of funds? Is it an inconsequential transaction? View every touch point across the end-to-end application delivery chain. With no blind spots or interference, you can feel comfortable that when it s green in your data center, it s green for your user, too. Create deep, 24/7 application visibility, so you can trace every transaction in production, from user-click to code line. What is the root cause of an issue and where is it located? Proactively catch performance bottlenecks, outages and other critical issues, before they impact your customers, employees and business. Benchmark your performance against your competition, and continue to mature your monitoring strategies for the highest industry ratings in the business. As the number of customers using online financial services increases, financial institutions that proactively manage application performance will have a marked advantage in maintaining market leadership. THE APM ADVANTAGE FOR FINANCIAL SERVICES Compuware APM provides a positive customer experience for online financial applications by running fast, automated diagnostic capabilities throughout the entire application delivery chain, from your customers or employees view. By evaluating application performance across the entire financial services delivery chain, Compuware APM ensures fast, seamless access to applications, regardless of how customers access them. Driven by end-user experience, Compuware s new generation of APM offers one integrated approach instead of the collection of loosely integrated parts offered by some vendors. By tracing every transaction THE NEW GENERATION OF APM Required APM Capabilities Optimize Business Transactions Create a high quality experience for your web, non-web, cloud and mobile customers Ensure excellent user experiences across all locations and geographies Accelerate Problem Resolution Quickly troubleshoot and resolve application problems Rapidly identify and receive notifications of performance problems Prioritize performance problems based on business impact Protect Your Revenues Find and fix performance and scalability problems Rapidly determine problem root causes down to the component, SQL statement or method level Reduce testing iterations and cycle time with proactive problem resolution and prevention Validate architecture for maximum scalability Improve Performance Across Your Application Delivery Chain Rank your site against your competition and other industry leaders Analyze and implement performance best practices Optimize investments in application delivery technology Compuware APM Solutions User Experience Management (UEM) Mobile Monitoring Streaming Monitoring Synthetic Monitoring Deep Application Transaction Management Data Center Real-User Monitoring Mobile and Web Load Testing 360 Deep Application Transaction Diagnostic and Regression Management Deep Application Transaction Performance Engineering Industry Performance Benchmarks 4

5 In an industry where minutes can mean millions of dollars, Scottrade is committed to providing the best web site for its customers. In addition to affecting customer relationships, any downtime or degraded performance could cost Scottrade money, burden customer support and waste internal resources. On its new web site, Scottrade was offering great new features. But the company wanted to provide customers with the fastest web site in the online brokerage industry. Benchmark statistics from Compuware helped Scottrade to both add features and improve web site performance and speed. Chief Information Officer Ian Patterson and his team worked to identify key opportunities to improve performance. We wanted to look at it from the customer s viewpoint, and that s when we decided to get Compuware involved, to help us see what the customer is seeing and what s really happening out there in the world with the site, he says. With Compuware APM, we saw improvements, and it was a race for us to become the best. We hit the big time when we broke the three-second barrier and we were consistently up over 99 percent availability. in production, from user-click to code line, the Compuware solution provides the industry s only unified coverage of the entire application delivery chain from the user, through the cloud, to the data center with the deepest 24/7 application visibility. Compuware s APM solution is easy to integrate and deploy. It offers rapid value and a quick return on investment perfect for the financial organizations that can no longer tolerate lengthy, resourceintensive implementations. Compuware s financial services clients include Retail banks Brokerage firms Insurance companies Credit card companies Consumer finance companies Investment firms CLIENTS SEE CLEAR BUSINESS PERFORMANCE RESULTS From individuals accessing their personal banking information to online traders running transactions via online trading platforms, Compuware clients experience the benefits of a new generation of application performance solutions. Wachovia, now Wells Fargo, is a full line provider of financial services. Compuware APM helps Wachovia with faster online banking and delivering a more consistent, reliable online experience for customers. FBL Financial Group is a holding company whose primary operating subsidiary is Farm Bureau Life Insurance. Compuware APM helped FBL identify performance bottlenecks to avoid a $4M IT upgrade. GlobalCollect provides international payment services, and uses Compuware APM to get an integrated view of business application performance, from merchant to financial institution, for proactive problem detection and resolution. U.S. Bank, the fifth-largest commercial bank in the United States, uses Compuware APM to improve response time of its Internet banking transactions by 20 percent. RHB Bank is a financial services provider based in Kuala Lumpur, Malaysia. Compuware APM helped RHB Bank reduce troubleshooting and resolution time by 90 percent and improve application response time by 80 percent. SEC SERVIZI, a consortium of Italian banks, used Compuware APM to reduce the cost of client calls by 30 percent. Regions Bank, a bank holding company for banking services, uses Compuware APM to achieve outstanding performance, even during a period of double-digit growth. Asset and wealth management organizations 5

6 GET READY TO IMPROVE THE CUSTOMER EXPERIENCE AND INCREASE BUSINESS VALUE How can you differentiate from your competitors? Studies show nearly 50 percent of the U.S. customer base does not have a positive customer experience. Financial services companies that take steps to meet customer expectations can still win over these clients. 6 Delivering round-the-clock service applications that work everywhere all the time is no longer an option for your firm. To boost customer service and satisfaction, you need detailed, end-toend monitoring of the application delivery chain, with technology that help you clearly understand the business impact of any problems. In this way, you can easily prioritize and resolve critical issues, before they impact your customer and your business. Compuware helps companies increase the profitability and reduce the risks associated with delivering mission-critical, customer-facing business applications. Compuware APM provides actionable insights and process improvement techniques that enable financial institutions to achieve and maintain peak performance and high-quality customer experiences. ABOUT COMPUWARE APM Compuware APM is the industry s leading solution for optimizing the performance of web, non-web, mobile, streaming and cloud applications. Driven by end-user experience, Compuware APM provides the market s only unified APM coverage across the entire application delivery chain from the edge of the Internet through the cloud to the data center. Compuware APM helps customers deliver proactive problem resolution for greater customer satisfaction, accelerate time-to-market for new application functionality and reduce application management costs through smarter analytics and advanced APM automation. With more than 4,000 APM customers worldwide, Compuware is recognized as a leader in the Magic Quadrant for Application Performance Monitoring. To learn more about Compuware APM, please visit: compuware.com/apm How Well Are You Doing Today at Managing the Customer Experience? Launching New Financial Services Applications, Campaigns or Changes When you think about the process of deploying your financial services and products online assuring convenience and a good experience for your online customer, regardless of where they are located or what time or day it is which part of the process concerns you the most? Assessing the Customer Experience When assessing the quality of online experience you deliver to customers, what metrics do you use and how do you gather them? How actionable is the information, in terms of understanding what to fix or tweak to improve the online experience and increase customer satisfaction? Resolving the Problem How do you currently find out if you are having problems with your online performance and customer experience? Once you become aware of problems, what is the process you use to resolve them, and who is usually involved? Ongoing Improvements Benchmarking is a great way to assess how your company is performing against your competitors online services. Do you have a benchmarking process in place, and do you use it to help you maintain or increase your online performance standards? 6

7 1.) The Impact of Poor Web Site Performance in Financial Services, Forrester Consulting, Akamai Technologies, Inc.; August 25, ) Compuware Peak Time Internet Usage Study, Equation Research; November ) How Does Your Service Desk Stack Up? Part 2: Service Desk KPIs, MetricNet. 4.) Gartner Says Cloud Banking Can Drive Creative Destruction in the Banking Industry, article on Gartner Symposium, November ) Revving Up Website Performance, AmericanBanker.com; May 26, ) 2011 World Retail Banking Report: Customer Satisfaction: A Relative Experience, Capgemini, UniCredit and Efma; May 13, Compuware Corporation, the technology performance company, provides software, experts and best practices to ensure technology works well and delivers value. Compuware solutions make the world s most important technologies perform at their best for leading organizations worldwide, including 46 of the top 50 Fortune 500 companies and 12 of the top 20 most visited U.S. web sites. Learn more at: compuware.com. Compuware Corporation World Headquarters One Campus Martius Detroit, MI Compuware Corporation Compuware products and services listed within are trademarks or registered trademarks of Compuware Corporation. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners rf