3 Reasons Financial Services Companies Need APM Right Now

Financial Services companies operate in a difficult environment. Many of their applications are absolutely vital to the proper workings of the global economy. They are one of the most heavily regulated industries in the world, and they are a constant target of hackers. Their systems need to be available, performant, and secure while generating the revenue sought by Wall Street and their shareholders.

In this article we’ll take a look at 3 factors that impact revenue and how APM is used to mitigate risk.

1. Customers Hate to Wait

Losing a customer is a bad thing no matter the circumstances. Losing a customer due to poor application performance and stability is preventable and should never happen! If you lose customers, you either need to win them back or attract new customers.

Fred Reichheld of Bain & Company reports that:

  • Over a five-year period businesses may lose as many as 1/2 of their customers
  • Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer
  • Businesses who boosted customer retention rates by as little as 5% saw increases in their profits ranging from 5% to a whopping 95%

Based on this research, you should do everything in your power to retain your existing customers. Providing a great end user experience and level of service is what every customer expects.

APM software tracks every transaction flowing through an application, recognizes when there are problems and can even automatically fix the issue.

FS Transaction View

Understanding the components involved in each servicing each transaction is the first step in proper troubleshooting and problem resolution.

2. Customer Loyalty = Revenue Growth

On the flipside, better performance means more customer loyalty and, as a result, revenue gains. The Net Promoter methodology, developed by Satmetrix in cooperation with Bain & Company and Fred Reichheld, is a standard way to measure customer satisfaction. Satmetrix developed the Net Promoter methodology, which is an indexed measure of customer loyalty. In their Net Promoter whitepaper, Satmetrix discovered a direct correlation between high customer loyalty scores and the rate of revenue growth for those companies. The paper showed that the higher the customer loyalty score a company achieved, the higher their rate of revenue growth over a 5-year period.

With applications playing a dominant role as the most common interaction between company and customer, it is imperative that customers have a great experience every time they use your application. Slow transactions, errors, and unavailable platforms leave customers dissatisfied and will reduce your loyalty score. Over time, this will have a significant impact on revenue.

So if we accept the premise that performance should be top-of-mind for anyone with a critical banking or FS application, what do we do next? How do we improve our application management strategy to prevent loss of revenue and improve customer loyalty? The answer: by taking on a transaction-based approach to application performance management.

APM software tracks the performance of all transactions, dynamically baselines the normal performance, and alerts when transactions deviate from their normal behavior. In this manner you’re able to identify performance problems as they are beginning instead of waiting until customers are frustrated and abandoning you applications.

FS Business Transaction List

List of business transactions classified by their level of deviation from normal performance.

3. Transactions = Money

Transactions are the lifeblood of banking. From making an online payment or converting currency to buying or selling stock, just about everything a bank does involves transactions. Furthermore, a significant portion of banks’ revenue comes from transaction fees for activities ranging from ATM withdrawals to currency conversion and credit card usage. For these fee-based transactions, the faster you can ring the cash register (response time of business transactions), the more money you will make and the better likelihood that your customer will come back to you for their next transaction.

With this in mind, it is imperative that IT organizations take a user-centric, or rather, transaction-centric approach to managing application performance.

APM software provides context that enables you to understand the business impact of failed and/or slow transactions. The data gathered by APM software can be used to focus on improving functionality that is used most often or responsible for the most revenue.

FS Prioritization

Having various data perspectives allows application support and development teams to prioritize what needs to be updated in the next release.

If you aren’t using an APM tool yet, or if your APM tool isn’t providing the value that it should be, then you need to take a free trial of AppDynamics and see what you and your customers have been missing.

Faster and Better On-Boarding for MSPs

Managed Service Providers have a big task these days. A few years ago applications were much less complex and understanding those application architectures and dependencies before on-boarding was much more simple. These days we have applications that combine classic architecture, service oriented architecture, cloud architecture, big data components, etc… On-boarding a new customer application can be risky and if it goes wrong can leave a bad taste in your new clients mouth.

The risk alone is cringe worthy so to minimize that risk most MSPs seek out and pay top dollar for experts that know about the particular type of application they need to on-board. This is a pretty effective solution from a risk perspective but from a cost perspective this takes away from the MSPs bottom line.

Reduce Risk Without Driving Up Cost

Some of the best MSPs out there have figured out that there is a way to substantially reduce on-boarding risk, time and cost. Here is the secret recipe these MSPs have discovered:

  • Automatic discovery and rendering of all application components (Figure 1)
  • Automatic discovery and correlation of application dependencies (Figure 1)
  • Automatic detection and identification of application problems (Figure 2)
  • Automatic discovery and correlation of application load and resource consumption. (Figure 3)

The recipe above is all about letting the right tools collect, analyze, correlate, and visualize the important application aspects that every MSP needs to know before they attempt to on-board a customers application. The alternative is spending a bunch of time and money trying to manually piece together this information from tribal knowledge, log files, shell scripts, trouble tickets, etc…


Figure 1: Application components, flows, and dependencies.

business Transactions and CPU

Figure 2: Automatic detection and identification of application problems.

Screen Shot 2013-08-01 at 4.20.09 PM

Figure 3: Capture and correlation of resource consumption.

Verification and Validation

An awesome side effect to using a tool for all of those tasks above is that you can use the same tool to prove to your new customers that you successfully moved their application onto your platform. Verifying the architecture, response times, stability, and dependencies is critical to calling any application move a success so if you use the same tool for your before and after analysis you are way ahead of the game.

All of the functionality mentioned in this blog post is available today in AppDynamics Pro. If you plan on moving an application you need to see for yourself how much AppDynamics Pro can help. Click here to begin your free self-service trial of AppDynamics Pro today.