When digital experience becomes the product: How can financial institutions scale without risking customers or compliance?
By Simon Rizkalla, New Relic Vice President Customer Advocacy, APJ
India’s digital economy is redefining expectations. The record-breaking adoption of UPI payments, the explosion of digital financial applications, and the rapid proliferation of AI have collectively raised the bar for customers, making “quick and seamless” experiences the bare minimum. Against this backdrop, digital experience has become the “product” itself – a lens through which customers choose and stay loyal to financial brands. Across the sector, they now expect instant transactions, seamless self-service, personalised recommendations, and always-on support.
This is exactly why AI adoption is a top priority for financial institutions. Yet massive data volumes,
operational complexity, and stringent regulations are making it an uphill battle. Traditional monitoring tools were never designed for this landscape. They lack the contextual awareness to keep pace with dynamic, AI-driven environments and offer little help when institutions need to detect anomalies across interconnected systems in real time. Institutions find themselves caught between customer needs and regulatory requirements, where the cost of getting it wrong is fatal on both sides.
In this context, businesses need intelligent monitoring capabilities that manage compliance, customer, and business requirements all at once.
Balancing Customer Needs and Regulatory Requirements
The cost of friction in digital financial services is severe. An hour-long system outage can cost a financial institution as much as $1.8 million. However, this figure does not capture the long tail of reputational damage and customer attrition that follows. In a sector where trust is the foundation of every relationship, even brief disruptions can produce disproportionate fallout.
With the Digital Personal Data Protection Act (DPDP) and the Reserve Bank of India’s Framework for Responsible and Ethical Enablement of AI (FREE-AI) in place, financial institutions do not have the option to choose “either” but “both” – customer satisfaction and regulatory compliance to survive and gain a competitive edge. The need of the hour is to adopt monitoring capabilities that put equal weight on both simultaneously.
Why intelligent observability is non-negotiable
To establish a seamless digital experience while staying compliant, businesses need to choose the right intelligent observability platform, one with in-built security guardrails right at the core. When regulatory alignment is embedded and not bolted on, institutions can confidently deploy AI and cater to their customers’ needs.
Intelligent observability analyses everything from the prompt to the response, flagging anomalies such as model bias, hallucinations, or toxic outputs before they reach customers or trigger compliance violations. It tracks how AI systems interact with broader workflows, ensuring that no interaction goes unnoticed. Financial institutions gain the ability to identify, in real time, when and where an AI system deviates from guidelines or negatively affects a customer journey. Businesses that are leveraging this are already drawing immense value from it, with 42% of financial services firms reporting a ROI of 2x or more on their observability spend.
In addition to performance, security is another area that is top of mind. BFSI remains one of the most targeted sectors for cyber attacks in India, with the financial and reputational costs of breaches continues to rise. Intelligent observability provides always-on monitoring and visibility that identifies potential entry points and safeguards systems against misuse, making it as much a security asset as an operational one.
Setting the Standards High
In a digital economy where seamless experiences become the product, financial institutions are bound to deliver nothing less for their customers. With intelligent observability, businesses can keep pace with the rest of the industry while staying true to both customer needs and regulatory requirements. Ultimately, the institutions that thrive in India’s new digital era won’t be those that simply avoid failure, but those that leverage intelligent observability to turn trust and reliability into their greatest advantage.