Banks hit by costly outages as AI drives observability
New Relic has published new survey findings on observability adoption in financial services, including estimates of the cost and frequency of high-impact IT outages and the sector's growing use of AI monitoring.
The company's Observability Forecast for Financial Services draws on responses from 156 IT and engineering leaders across banks, fintechs, insurers, investment firms and credit unions. The survey points to security, governance, risk and compliance as the most cited driver for observability adoption in the sector. It also highlights AI usage and customer experience expectations as additional factors.
New Relic reported that high business impact outages cost financial services companies an average of USD $1.8 million per hour. The figure broadly matches the cross-industry average of USD $1.7 million per hour cited in the same dataset.
Outage profile
The survey data suggests outages remain frequent. New Relic said 29% of respondents reported high business impact outages at least weekly. The company compared that with an all-industry average of 35%.
The findings also break out reported causes of outages. Respondents most often pointed to network failures, which accounted for 37% of the incidents referenced. Software deployment issues followed at 34%. Changes made to the environment followed at 32%.
New Relic said disruptions consume a significant share of engineering time. It reported that engineering teams spend an average of 31% of their time addressing disruptions. The company linked this to reduced time available for development work not directly related to incident response.
AI monitoring
The report indicates that AI deployment is influencing observability plans in financial services, even as the sector typically adopts new technology cautiously. New Relic said AI monitoring deployment in financial services stands at 50%. It compared that with a cross-industry average of 54%.
New Relic also reported that 38% of financial services organisations cite AI as a primary driver for adopting observability. Security, governance, risk and compliance ranked higher as a driver in the survey. The company added that 47% of respondents said observability helps their organisation prepare for and manage AI application development and AI deployment.
New Relic Chief Technology Strategist Nic Benders framed the results around operational risk and AI roll-outs.
"In an era where downtime is measured in millions, financial institutions can no longer afford to fly blind. The shift from experimental AI to production-grade intelligence requires a new level of operational rigour," said New Relic Chief Technology Strategist Nic Benders.
"Our latest data confirms that observability is a strategy to de-risk the sector's modernisation efforts. It provides the guardrails necessary to deliver seamless digital experiences and scale AI responsibly, ensuring that progress never comes at the expense of security or compliance," said Benders.
Customer experience
The findings also emphasise customer-facing performance, particularly in digital channels. New Relic said 33% of financial services respondents cited increasing demands on improving customer experiences as a reason to prioritise observability. It described that as eight points above the cross-industry average.
New Relic said respondents plan to increase use of Digital Experience Monitoring tools over the next one to three years. The company reported that 89% plan to deploy browser monitoring. It said 80% plan to deploy mobile monitoring and 77% plan to deploy synthetic monitoring.
Rob Newell, SVP and GM of APJ at New Relic, pointed to the region's combination of regulatory scrutiny and customer expectations for digital services.
"Across the Asia Pacific, financial services organisations are operating in one of the most tightly regulated and digitally demanding environments in the world," said New Relic SVP & GM APJ Rob Newell.
"From real-time payments to always-on mobile banking, customers expect flawless performance-and regulators expect resilience. Our data shows that observability has become critical for financial institutions in the region, helping them reduce the impact of outages, modernise with confidence, and adopt AI responsibly. In 2026, it's no longer just a technical capability; it's a business imperative for protecting trust while enabling innovation at scale," said Newell.
Value and automation
New Relic's survey also asked respondents about returns from observability investments. It said 42% of financial services companies report an ROI of 2x or more. It also reported that 56% said observability improves collaboration across teams when making software stack decisions, while 53% said it mitigates service disruptions and business risk.
The report links observability with DevOps practices in financial services. New Relic reported that 66% of respondents use observability to optimise continuous software delivery pipelines and improve code quality. It compared that with a cross-industry average of 55%.
On automation, the company reported that 59% have automated infrastructure provisioning and orchestration, compared with 49% across industries. It also said 53% have automated portions of incident response, compared with 41% across industries.
New Relic said financial services leads the market in deployment of network and security monitoring, with 72% adoption in the survey. It also cited database monitoring at 69% and log management at 61% as indicators of focus on system reliability and security controls.
The report signals continued spending and deployment activity in observability tools across financial services, particularly in areas tied to outage reduction, AI monitoring and digital experience monitoring.