Marc Jones, Chief Technology Officer, Alkami
Back in March and April, when the Federal government began issuing stimulus payment checks, the unprecedented volume of customers attempting to access accounts overwhelmed the digital platforms of many financial institutions. Systems were slow to respond. Users constantly refreshing screens and apps added to the increased traffic load. Many platforms crashed, causing total outages for hours on end.
At Alkami, we were able to anticipate the upcoming demand and leveraged our engineering team and advanced automated tools to prepare our clients for spikes in their digital banking usage. But one thing has been clear – social distancing measures in the midst of the current pandemic have accelerated the demand for digital and online banking. Banks and credit unions that are prepared to face the present can better navigate what comes next.
In this blog, we’ll explore the importance of system availability and how we were able to adapt quickly to changing demands. We’ll also highlight what banks and credit unions can do to better accommodate what’s likely to be a permanently growing digital user base. After all, before the pandemic hit, a recent Juniper Research study claimed that by 2024, the number of digital banking customers would already increase 54% over 2020 numbers.
Disparate Systems Intensify Periods of High Demand
Many financial services organizations still struggle with disparate systems. All have their own backend core banking system, and many use third-party services such as bill payment providers and remote deposit processing in addition to the Alkami Platform. These are just a few examples of what makes up a disparate third-party ecosystem that powers a financial institution’s services.
Availability becomes critical, not only in emergency scenarios such as the stimulus checks, but for everyday instances where back-end processes like recurring account transfers and scheduled payments must continue even if another portion of the system is slow or goes down.
A successful digital banking platform should be able to overcome the challenge of managing multiple variables and changing load by leveraging alerting and monitoring as a first line of defense. Once alerted, a secure, efficient platform should have the ability to use automated tools to quickly spin up additional infrastructure, systems and services to serve end users. Finally, for other problems outside the platform’s infrastructure – for example a third-party provider who may be having issues – a successful digital banking product needs the administrative power to control portions of the system, allowing users to proceed with other activities, until the third-party comes back to full functionality. Only the combination of strong engineering automation practices, an advanced software architecture and the power of the cloud makes this possible.
Cloud is Key to Future-Proofing Digital Platforms
The cloud is a key component in how financial institutions can shore up digital banking platforms to protect against availability issues or traffic volume surges that can occur at any time.
Alkami hosts our digital banking platform with Amazon Web Services (AWS) Cloud to provide our system with the resiliency and real-time scalability to stay nimble and available. By using the cloud, we’re able to automatically detect load spikes and spin up additional servers to meet the demand. This translates to building a brand-new server in a fraction of the time compared to a traditional data center. It takes engineering investment in automation and cloud-native tools to successfully support a digital banking platform in the cloud. This was an investment Alkami took seriously and started investing in years ago to reach our level of maturity in the cloud today.
In addition to unpredictable load, financial institutions have always been a target of cybersecurity threats, but more so now as phishing attempts and malware have risen in conjunction with the rise of digital banking. Banks and credit unions with a digital banking provider in the cloud can leverage cloud services to gain access to more modern and automated security tools not available or feasible in a traditional data center.
As an example, Alkami leverages AWS to encrypt every piece of data at all times without the need to write an entire encryption module or dedicate a set of developers to maintain our encryption standards. For us, it was as easy as checking a box to include this service — again, a feat not easy or feasible in traditional data centers. As another example, Alkami leverages the AWS cloud for advanced networking controls that prevent attackers from even touching our infrastructure: we can block high threat regions and also dynamically block attackers hitting our sites from dynamic locations — an increasing threat due to the explosion in Internet of Things (IoT) trends. These are only two examples of the many advanced controls taking security to the next level for Alkami clients in the cloud.
It’s More than the Cloud
While leveraging the cloud is important, it is also critical that a digital banking provider designs each facet of the system to reduce user friction and work around infrastructure where possible. For instance, Alkami enables touch ID and face ID on our mobile app to accelerate the login process and bypass some of the dependencies on our infrastructure.
When touch or face ID is used, the user can experience a faster login experience with enhanced security through the use of biometric authentication. This faster login process also means less dependence on the back-end infrastructure to further speed the user’s experience. This is a unique approach different from a desktop experience that can provide enhanced end user benefits.
We’ve also been able to accomplish something that’s rather unique in the industry – having a single code base from which all clients receive updates. Instead of building digital banking with a separate code base for each client, and having to plan out massive and risk-prone upgrade cycles, we are constantly pushing out small, identical updates to all customers in a similar timeframe.
This eliminates guesswork around how the code and the systems are working through each iteration, and if something goes wrong, once we identify a fix, we can apply it to all of our customers at the same time. This is a great advantage in times like these, when addressing issues in real-time is more important than ever.
We’ve seen first-hand that people are registering for online banking who have never used it before. Banks and credit unions can position themselves to better manage this increased demand while supporting the formation of digital communities, but can only be successful with a cloud-based digital banking provider.