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Small business banking in the on-demand economy: Curtains on nine-to-five services

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In today’s always-on, always connected world, the swift and immediate provisioning of goods and services is no longer a nice-to-have, but an absolute necessity. Small business owners, just like consumers, are becoming far more empowered, connected and informed than ever thanks to the accessibility of information anytime, anywhere. The result? They enjoy almost infinite variety and demand instant gratification.

Such is the rise of the on-demand economy, which marks a radical shift in commercial behaviour, driving small businesses to revolutionise the way they operate or risk getting left behind.

A massive factor leading to soaring demands for 24/7 services is the growing smartphone penetration rate in today’s hyper-connected, mobile world. According to Deloitte[1], Australia’s dependence on smartphones is continually intensifying, with the nation being ranked the sixth most concentrated smartphone market in the world.

The rise of mobile banking and its implications

Smartphones are increasingly being used across all aspects of small business operations, from processing point-of-sale purchases, paying bills, placing orders with suppliers and even banking transactions. Mobile banking, in particular, has experienced exponential growth in recent years, with a rising number of small business operators tapping on their mobile devices to check balances, transfer funds and transact online. The same Deloitte report indicated that 55 per cent of Australians surveyed already use a mobile banking app to transfer money.

Evidently, Australia is fast progressing towards becoming a mobile-centric economy as smartphones are now more powerful and capable than computers of just ten years ago. Small business owners are turning to their phones for greater flexibility in managing more and more of their operations.

However, this increasing dependence of smartphones and app usage is fraught with security risks. For instance, Australia’s largest telecommunications company was recently struck by network outages, leaving many small business owners, who use their mobile phones to conduct business, in the lurch.

Unplanned downtime for banks can mean unplanned downtime for small business

Downtime for a small business can be disastrous for the owner. It goes without saying that financial institutions, amongst other businesses, are already sitting up and taking notice, knowing how many organisations, as well as consumers, trust them to provide reliable service and instant access to information and accounts. Unquestionably, banks and financial services organisations are exposed to multiple dangers and potential downtime on a daily basis.

From system outages and data losses due to faulty backup and retrieval processes, to physical security flaws such as trojans causing DDoS attacks (Distributed Denial-of-Service), these can lead to serious business implications for the financial services industry. For instance, a network outage at a bank could leave hundreds and thousands of small businesses without access to their accounts or ability to make deposits. With hackers becoming more sophisticated and capable, these are no longer isolated incidents and occur way more frequently than they should. Reports show that downtime and data loss cost Australian businesses a whopping US$55 billion in 2014.

It is important to build trust across every stage of their customer’s interaction with the organisation. This does not refer to ‘legacy trust’ built over years of being in business, but rather the ability to provide a seamless, on-demand experience each time the customer transacts with the bank; be it online or in person. This is the ‘new trust’; the new normal in the world of banking.

Building the ‘new trust’ amongst consumers

So how do banks attempt to build this ‘new trust’? The infrastructure of financial institutions is made up of diverse components: different branches, banking software and ATMs (automated teller machines). Whether a bank maintains a number of branches, a network of ATMs, or both, the infrastructure of a bank is distributed across multiple locations. As more banking transactions are conducted over the Internet, the availability and performance of the online banking portal becomes more critical. Even the smallest irregularities may confuse customers.

To enjoy optimum uptime, IT teams at financial services institutions need to ensure that systems and operations are fully available around the clock – these include equipment and applications, amongst others. In order to achieve this, administrators need to be constantly informed about the state of their infrastructure. For instance, by having in place a comprehensive monitoring solution, businesses have the potential to alleviate or even eliminate the complications that come with unplanned downtime.

For the financial services sector, legacy banking platforms and a lack of technology investments could sound the death-knell in extreme cases. Nonetheless, our preoccupation with external threats should not divert our attention from more basic internal risks. Ultimately, it is important to understand that both external and internal threats can significantly impact the customer’s trust in your business.

Clearly, the cross-over to an always-on business is no longer a question of ‘if’ but ‘when’. As such, it is vital for businesses to make investments in technology that can assist with monitoring the overall health of their network infrastructure. In turn, this will help ensure better control over systems, as well as the ability to foresee network distress and distribute network assets more efficiently.

At the end of the day, “normal business hours” no longer exist in the banking industry –services must remain available on their small business customers’ schedules, not theirs – it is no longer a 9-to-5 business, but a 24/7 on-demand service.


About the author

Andrew Timms is the Sales Director for APAC at Paessler AG.

[1] Deloitte (2015). Our mobile world always on #FOMO: Given our endemic ‘Fear of Missing Out’ – Australian consumers are ‘always on’. Source: http://www2.deloitte.com/au/en/pages/financial-services/articles/our-mobile-world-fomo.html