Banking: the illusion of stability

Shilpa Doreswamy at GFT argues that seamless banking depends on resilience

 

In today’s hyperconnected economy, retail banking has become an always-on, digitally mediated service. Banking customers have become accustomed to finances at their fingertips, being able to access their accounts 24/7, seamlessly and instantly, whether this be transferring funds, making mortgage payments and even investing in stocks and shares.

 

However, these visible touchpoints mask an invisible, yet increasingly vital, competitive differentiator - operational resilience. 

 

Resilience is no longer just a technology or compliance function. It is a core business capability that has become essential for maintaining customer trust, protecting a bank’s market share and navigating the complexity of modern financial ecosystems. 

 

 

Resilience beyond cyber-security

Whilst cyber-security remains top of mind when developing resilience strategies within financial institutions, resilience now goes far beyond just defending against external attacks. Banks are equally vulnerable to a host of internal and environmental disruptions as they are to cyber-criminals. 

 

For instance, system overloads during peak transaction periods create severe bottlenecks that can leave customers locked out of their bank accounts. Legacy infrastructure, which is common amongst traditional banks, is a key reason for many banks falling under pressure during periods of increased banking activity. 

 

Additionally, as financial organisations continue their transformation journeys, new technologies are being integrated across various operations, such as cloud computing, artificial intelligence and open banking APIs. These digital tools, whilst allowing for innovation and significant speed to market, also create intricate interdependencies. Many banks now rely on a network of third-party providers to deliver essential services, from identity verification to fraud analytics. 

 

Each of these interdependencies increases the risk of disrupted banking services. When a core banking service is dependent on multiple layers of external infrastructure, the resilience challenge becomes systemic. An outage at one third-party provider can cascade across services, exposing customers to risk and the wider financial institutions to compliance breaches.

 

Furthermore, traditional business continuity plans, which were once sufficient for managing isolated events, are no longer adequate in a system where technology, data and services are interwoven across various entities and time zones. 

 

The digital banking experience may seem seamless, but recent outages at major UK banks have shown how fragile that experience can be. From delayed salary payments to disrupted card transactions, such incidents damage customer trust and trigger regulatory scrutiny.

 

According to GFT’s Banking Disruption Index, more than a third of UK banking customers now say that IT reliability is one of the most important factors in selecting a financial provider. It is clear that resilience is not just a back-office issue but a brand issue, a trust issue and an imperative for banks to take action. 

 

 

What a resilient bank looks like 

A resilient bank takes a holistic and proactive approach to operational risk. At an infrastructure level, resilient banks invest in platforms that scale dynamically and remain stable under pressure, even during periods of heightened usage. Such organisations maintain deep visibility into their systems, leveraging AI for real-time observability to detect and respond to anomalies before incidents even come to pass. 

 

In addition, truly resilient financial organisations treat business continuity as a live, integrated function - one that is continuously refined and tested instead of being a regulatory check-box exercise. This extends to vendor management as well.

 

Resilience requires banks to apply rigorous onboarding standards, set clear resilience expectations within contracts, and continuously monitor partner performance to ensure accountability. 

 

Critically, operational resilience in banking is an intentional process in change management. New features, upgrades, systems or vendor integrations are rolled out with safeguards in place to mitigate potential disruptions. Every team within the organisation is trained and upskilled in incident response and resilience management to ensure that each employee is enabled to act swiftly when unexpected challenges arise. 

 

Furthermore, proactivity is key. The most resilient banks today are moving towards resilience by design. Rather than reacting to problems as they occur, resilience is embedded into the very architecture of the technology, governance and operational strategy of a financial organisation. This begins with modernising legacy systems to eliminate technical debt and reduce complexity. 

 

Cloud infrastructures need to be deployed in ways that support geographic redundancy and failover capabilities.

 

In addition to this, banks need to take advantage of evolving innovations such as AI and automation to detect early signs of failure, model risk scenarios and orchestrate rapid response workflows. The adoption of chaos engineering, a practice wherein technology stacks are stress tested for robustness in periods of increased banking activity, is necessary for banks to retain customer trust and loyalty. 

 

These practices are not one-time implementations: rather, they represent a strategic shift towards continuous adaptability. Institutions that succeed in this transition will be those that treat resilience as a shared responsibility across the organisation and not just the IT or compliance teams. 

 

 

Resilience as a competitive advantage

The message for banks is a clear one: resilience must be owned at the highest levels. Boards and executive teams alike need to prioritise investments in infrastructure, upskilling employees and those processes that support business continuity. A cross-functional approach to resilience is crucial, one that bridges operations, technology and risk. 

 

Forward-thinking financial institutions are now building resilience into the customer experience. They recognise that stability under stress builds trust and that trust builds long-term value. In an increasingly digital era, resilience isn’t just operational discipline. It’s strategic equity. 

 

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Shilpa Doreswamy is Retail Banking Sector Director at GFT

 

Main image courtesy of iStockPhoto.com and AndreyPopov