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Fintech APM: Considerations, Benefits, and Tools

  • Coralogix
  • January 31, 2023
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In the last few years, fintech enterprises have disrupted the financial services and banking industry by taking everything computing technology offers – from machine learning to blockchain – and turning it up a notch. Traditional financial institutions must now compete with challenger banks offering electronic payment alternatives, peer-to-peer lending, and investment apps. The only option for conventional banks and financial institutions that want to stay relevant is to join the fintech revolution.

To attract and retain customers – and therefore protect their revenue – any business operating in the fintech space needs to invest in its online services and apps. But blindly throwing money at a problem is not the answer. Instead, those charged with delivering fintech products need to understand and embrace the software industry’s best practices to ensure they accelerate delivery while maintaining quality and reducing failures. Application performance monitoring and management is one of the ways that fintech enterprises stay ahead of the competition.

Why is fintech APM vital?

In the fintech industry, high performance and uninterrupted service availability are essential for customer acquisition and retention. When it comes to online services and mobile apps, consumer expectations are high: pages that are slow to load or unresponsive may not be given a second chance. At the same time, error messages or missing features will prompt users to try your competition. In a B2B context, high SLAs requiring near-continuous uptime and resolution of critical issues within an hour or less are the norm.

On the other hand, the technology that enables these services is increasingly complex. To respond to changes in visitor traffic, remain resilient in an outage, and accelerate the delivery of features and improvements, software development teams have shifted from monolithic designs to distributed architectures. In the latter, the technology stack is broken down into smaller, interdependent services. A complete system may consist of dozens or even hundreds of separate services, some of which are provided by third-party providers. While this approach has many advantages, it makes it much more challenging to maintain a complete picture of how the system is behaves and how to unpick issues when they occur.

This is where application performance monitoring (APM) platforms come in. Application performance monitoring provides software development, operations, and support teams with a complete understanding of the system’s health, so they can detect issues early and drill down to quickly identify the root cause of a problem.

How can APM benefit fintech businesses?

If you’re operating in the fintech industry, implementing application performance monitoring and management for the apps and services you provide will deliver various benefits.

Enable proactive ops

Traditionally, software support and operations teams have been reactive rather than proactive. This model relies on customers reporting an issue which triggers a support case. Once the case has been picked up, the operative checks the runbooks to determine whether they can address a known issue. If not, the issue is escalated to second and then third-line support. Multiple teams are brought in for more complex issues to identify the cause, which may be located in a third-party service that your system depends on. Meanwhile, other users are experiencing the same problem. Eventually, a fix is developed and deployed, and the support case is closed.

One of the problems with this reactive model is that it depends on users notifying you of the issue in the first place. However, the proliferation of financial apps and services and changes in customer expectations means that users are more likely to switch to another provider than raise the issue and wait for a resolution. Even for more complex systems, such as trading platforms, where switching providers is not trivial, a poor experience can quickly erode trust and create momentum for a replacement to be sought.

Application performance monitoring and management turns this model on its head by enabling support and operations teams to identify issues as they emerge. APM tools actively monitor the overall health of your system and raise alerts when unusual behavior is detected. Support teams can start investigating the issue immediately, using data collated from every level of the system to drill down, identify the root cause, and engage the right development teams to fix the problem. This dramatically reduces resolution times (aka MTTR), minimizing the impact on end users and improving retention rates.

Accelerate transactions

In Fintech, where volume of transactions is vital for revenue, every millisecond of performance matters. Unfortunately, identifying performance bottlenecks and tracking down the cause of latency comes with multiple challenges. Modern systems are often based on distributed, containerized infrastructure, which can be scaled up or down in response to demand. As a result, a single request can take one of many routes through the stack, which makes replicating issues a challenge. In addition, the legislative or regulatory context can make it difficult for developers to have direct access to production data, again limiting their ability to replicate performance slowdowns.

By using an APM platform, developers are provided with real-time data about how the system is behaving. Graphs and timelines make it easy to pinpoint bottlenecks and identify areas of high latency, while an intuitive UI allows them to click through to the time series data and view the details. As a result, teams can investigate a fault without requiring access to the production system to replicate the issue first.

Beat your SLAs

In the financial services industry, time really is money. With service level agreements (SLAs) often requiring “six nines” availability or more, development and operations teams are under intense pressure to maintain uptime. Once an outage has occurred or a frustrated customer has raised a support case, the countdown has begun. While the cost of staffing technical support teams with the expertise to fix outages 24 hours a day, 365 days a year, is considerable, the cost of a failure that breaches your SLA requirements is even greater.

Thanks to proactive anomaly detection, an APM tool can enable support staff to identify issues before any damage is done. By the time the first call has been logged, the development team has already identified the cause and is working to deploy a fix, dramatically improving your response times.

Stop cyberattacks in their tracks

Given the vast sums, the potential for reputational damage, and significant legal or regulatory penalties at stake in the event of a breach, cybersecurity is not something fintech enterprises can afford to treat lightly.

An application monitoring platform can support your cybersecurity efforts with real-time monitoring and anomaly detection. When attackers get through your outer defenses, early identification of the hack is essential to limit the damage and protect your assets.

Key considerations when choosing a fintech APM tool

Monitoring what matters

While an APM tool will collect data from all levels of your system, there are some metrics that you should consider prioritizing for a high-level overview.

  • Average transaction time – This measures the time it takes for a single user-facing transaction to complete. An increase in this figure may indicate a performance bottleneck, which can cause users to look to other options. Breaking this data down by transaction type can help you identify areas of your service that would benefit from a developer’s attention.
  • Transactions rate – The number of transactions completed per minute or hour. Depending on the system, this may vary depending on market trading hours or user time zones. A fintech APM tool should be able to take account of these patterns and alert you to changes in trends that are out of the ordinary.
  • Install rate and average time to first transaction – For consumer-facing apps, these metrics indicate potential new users and are a key factor in acquiring new users. If the time to complete a first transaction is high, this can indicate a problem in the workflow or implementation that could be costing you acquisitions. By monitoring these metrics, you can assess whether it’s time for the team to explore potential enhancements.

A central source of truth

An effective application monitoring tool enables support teams and software engineers to drill down to the cause of any issue quickly. To make this possible, APM platforms need to provide access to data from every level of the system – not just high-level performance metrics.

For example, imagine a scenario where your fintech APM tool alerts you to an increase in average transaction time. Depending on the nature of your service, this could lead to frustrated users moving to a competitor’s product or a breach of your SLA terms. Your operations team needs to identify the source of the issue before they can start working on a fix. However, in distributed systems, a single user transaction will consist of dozens of smaller transactions as different services are invoked, database calls are made, and external APIs are queried. The increase in transaction time could be attributable to any of these areas.

By choosing a fintech APM tool that overcomes siloes between different data sources and puts all the information at your fingertips, you can get to the root of the issue quickly rather than losing time copying timestamps and switching between systems to try and track down the cause.

Intelligent alerting

Alerting your support and operations teams to issues as they emerge is a key feature of any fintech APM tool. However, what constitutes unusual behavior for your system changes over time as your functionality evolves and your user base grows. Manually configured alerts based on static thresholds can result in excessive alerts, making it difficult for support staff to find the signal amid the noise.

A better approach is to select a fintech APM tool that leverages machine learning algorithms to detect anomalous behavior based on current trends. Rather than limiting alerts to those metrics your team has identified in advance, intelligent alerts ensure you’re notified of any unusual activity.

Data storage and scalability

The volumes of data generated daily by financial services and banking systems can be vast, and storing that data comes at a cost. When selecting a fintech APM tool, it’s essential to consider where and how your data is stored.

Wrapping up

For fintech enterprises, the right APM tool can enable your development, operations, and support teams to identify issues earlier and respond to outages faster, thereby improving the customer experience and ensuring you meet your SLAs. Coralogix offers a unified full-stack observability platform that transcends data siloes and leverages machine learning to detect anomalies while reducing false positives. Our Stream technology minimizes data storage costs thanks to high-performance, real-time analysis of your data.

Where Modern Observability
and Financial Savvy Meet.