High-impact IT outages are costing financial services organisations an average of $1.8 million per hour, underscoring why banks, insurers and fintech firms are increasingly treating observability as a business necessity rather than a purely technical tool.
That is one of the key findings from a new industry report published by New Relic, based on responses from 156 IT and engineering leaders across banking, financial technology, insurance, investment firms and credit unions.
Downtime remains frequent, and expensive
According to the report, outages with significant business impact remain common in financial services. Nearly three in ten organisations (29%) experience such incidents at least once a week, only marginally better than the cross-industry average.
Network failures were cited as the leading cause of disruption (37%), followed closely by software deployment issues (34%) and changes made to production environments (32%). Beyond the immediate revenue loss, outages also carry a productivity penalty: engineering teams spend an average of 31% of their time responding to incidents, time that could otherwise be spent on innovation or modernisation.
Cautious modernisation, driven by risk and compliance
Traditionally conservative in adopting new technologies, financial services firms are nevertheless increasing their use of AI — and this, in turn, is accelerating the adoption of observability tools.
The report shows that 50% of financial services organisations now use AI monitoring, a six-percentage-point increase year on year, though still slightly below the all-industry average of 54%. Security, governance, risk and compliance remain the strongest drivers for observability adoption, but AI has emerged as a close second, cited by 38% of respondents.
Nearly half of organisations surveyed said observability plays a key role in preparing for and managing AI application development and deployment, helping teams balance innovation with regulatory and operational risk.
Digital experience becomes a trust issue
Customer expectations are also shaping observability priorities. One-third of financial services respondents said rising demands for better digital experiences are forcing greater investment in observability — a higher proportion than in most other industries.
With trust closely tied to the reliability of mobile banking and digital channels, firms are planning significant expansion of digital experience monitoring over the next one to three years. Around 89% plan to deploy browser monitoring, 80% mobile monitoring and 77% synthetic monitoring, signalling a strong focus on proactively identifying performance issues before customers are affected.
A business imperative, not just a technical one
Commenting on the findings, Rob Newell, SVP and General Manager for APJ at New Relic, said financial services organisations in Asia Pacific operate in one of the most tightly regulated and digitally demanding environments globally.
“From real-time payments to always-on mobile banking, customers expect flawless performance and regulators expect resilience,” he said, adding that observability has become central to reducing outage impact, modernising with confidence and adopting AI responsibly.
As financial services firms navigate growing regulatory scrutiny, rising customer expectations and increased reliance on AI-driven systems, the report suggests observability is rapidly moving from a backend capability to a core pillar of operational trust and competitive differentiation.