In this post we break down some of the biggest FinServ app failures that made headlines in 2020, and how organizations can avoid them in 2021.
The end of one year and the start of another is always a good time for reflection, and this December, some financial services institutions certainly have a lot to think about.
The digital transformation race in the financial services industry has been heating up for a while. But as more organizations accelerate software release velocity to further innovation, we’ve seen more frequently how speed can result in catastrophic, headline-making outages. Not to mention customer frustration and regulatory penalties…
When it comes to the movement of money – whether between friends and family, renters and landlords, employers and employees, investors and brokers – there is zero tolerance for failure. Particularly in 2020’s delicate economy, if financial transactions are not handled reliably, livelihoods are at stake. Any lag or misstep that could lead a user to question the status and safety of their money, even for a moment, can instantaneously erode trust and irreparably impact brand reputation and the bottom line.
Below, we took a look at some examples of where FinServ innovation went wrong in 2020, as well as the reliability lessons other engineering teams can learn from these app failures.
1. Robinhood Trading App Fiasco
Over the past few years, Robinhood has been disrupting the way many millennials invest and manage their money. The FinServ platform makes it easier to buy and sell stock and cryptocurrencies directly from your phone with minimal bank involvement. For major banks that rely on wealth management as a cornerstone of their business, Robinhood’s success has been quite a thorn in their side.
The burden of proof for Robinhood was to show they can provide an infrastructure that is as scalable, reliable and secure as that of major banks who have been developing their trading infrastructure for the last quarter-century. But that promise fell flat in March 2020 when the market volatility brought on by COVID-19 triggered a set of edge cases that brought Robinhood’s service to its knees, leading to a deluge of bad coverage and a formal apology from its founders.
2. A Series of Unfortunate TSB Bank Events
TSB is one of the largest retail banks in the United Kingdom, operating hundreds of branches across England, Scotland and Wales that serve over 5 million customers. After suffering a catastrophic outage 2 years ago as a result of inadequate software testing, the company has continued to experience smaller scale service disruptions, including several notable app failures throughout 2020.
In April, an unexpected outage created login issues for users on the same day that Easter Universal Credits (government financial support for low income or out of work residents) were expected to hit accounts. In July, just days after boasting of growing demand for its digital banking services, TSB experienced another application failure that caused glitches and access issues. Just one month later, reports surfaced of further errors impacting users. In October, a software issue left TSB customers unable to view or access their payments – on payday! Finally, customers reported yet another service issue on Black Friday.
After these continued app failures, it doesn’t come as much of a surprise that recent reports indicate TSB’s parent company, Sabadell, is considering a potential sale.
3. HDFC Bank Digital Transformation Flop
As the largest bank in the second largest country in the world, HDFC has invested heavily in offering a range of digital technologies to its 40 million customers across India. Like any other institution looking to increase their online services, the company has experienced a number of major app failures along their journey.
In October of this year, the company was reminded once again that the course of digital transformation never did run smooth when a data center outage caused widespread issues for HDFC users. Several services were impacted, including customers unable to make payments for more than 6 hours.
4. National Australia Bank (NAB) Payment
NAB is one of the top four largest financial services institutions in Australia, with 1,590 branches and 4,412 ATMs across Australia, New Zealand and Asia servicing 12.7 million customers. With that many customers depending on them, reliability is crucial.
In October, the company experienced a widespread outage that affected everything from their mobile and desktop banking applications, to their electronic funds transfer POS systems. NAB was bombarded by angry tweets that illustrated just how painful a payment application outage can be in an increasingly cashless world. Customer complaints included businesses losing customers due to failing merchant terminals, and consumers unable to transfer critical funds to make purchases.
5. Large-Scale Ebroker Application Meltdown
The COVID-19 outbreak has driven plenty of unpredictability in the markets, as we saw with Robinhood earlier in the pandemic. On November 9th, the news of a potential vaccine sent the markets into a massive surge that threw several major Ebrokers for a loop. Companies like Charles Schwab, Vanguard, TD Ameritrade and Fidelity experienced technical issues that left customers unable to make time-sensitive trades. As the Dow Jones Industrial Average and S&P 500 hit all-time highs, many angry users took to social media to vocalize their complaints about application issues.
Looking Ahead to 2021
If 2020 has taught us anything, it’s to expect the unexpected. These organizations aren’t the first to slip up in delivering a reliable digital experience, and certainly won’t be the last. As we head into another year of increased pressure on financial services applications, engineering teams should take a second look at their software quality processes. Traditional testing methods are no longer sufficient for preventing critical production errors and app failures, which means teams must take a new approach to identifying and resolving errors.