The Future of Observability in Banking

By Vivek Porwal September 16, 2025

Observability in banking is entering a transformative phase, driven by high customer expectations for flawless digital experiences and the increasing complexity of IT systems. It’s no longer enough to monitor logs, metrics, and traces.

For example, during a holiday season purchasing spree, many customers stuck with slow transactions become impatient and are tempted to turn to another app. Because of such scenarios, IT teams nowadays are pressured to cut Mean Time to Resolution (MTTR) from hours to minutes. At the same time, it is expected that performance issues don’t erupt in production but are detected early in the development cycle.

The result? Observability is shifting from reactive monitoring to proactive, AI-driven insights that predict and prevent disruptions. With AI-powered observability platforms like Dynatrace, banking systems can seamlessly anticipate issues before they escalate. As banking infrastructure becomes more intricate with hybrid environments combining legacy systems and modern microservices, observability is no longer a tool—it’s a strategic necessity.

To meet these demands, we’ve identified five transformative trends from Vivek Porwal that will define observability in 2025. Let’s explore how these trends are set to reshape banking operations and customer experiences.

Key Takeaways:

Trends like shift-left observability and AI monitoring can reduce downtime, accelerate development, and ensure system stability.
Integrating observability with cybersecurity can protect against sophisticated fraud threats and improve compliance.
Partner with QualityKiosk to leverage AI-powered observability platforms like Dynatrace, which helps banks deliver smooth customer experiences and reliable systems with advanced observability solutions.

Top 5 Observability Trends for Banking

Trend 1: Emergence of AI Observability

Artificial intelligence is no longer a futuristic concept. In banking, AI-powered observability is emerging as a critical differentiator.

AI-powered observability enables real-time analysis of massive datasets, helping banks detect anomalies, predict disruptions, and recommend fixes before customer experience is impacted.

For example, a sudden spike in transaction volumes during peak hours could trigger cascading failures. At QualityKiosk, we leverage a combination of proprietary, open-source, and licensed tools—like Dynatrace—to quickly identify the root cause (say, an overloaded API or misconfigured service) and trigger automated remediation.

Beyond infrastructure, the rise of Generative AI (GenAI) has introduced a critical dimension to observability: understanding and monitoring the performance and behavior of AI models themselves.

Banks using AI for fraud detection, loan approvals, or customer service must monitor AI-specific metrics like GPU usage, API latency, model accuracy, and bias. AI observability ensures these systems operate smoothly, maintain customer trust, and meet compliance requirements.

As AI continues to reshape banking operations, AI observability will be a critical pillar in ensuring both performance and accountability across digital ecosystems.

Trend 2: Automation in Observability Pipelines

Managing observability within the dynamic and complex landscape of modern banking demands a paradigm shift from manual processes towards a more automated approach.

Consider this: when a payment fails or a login stalls, banks only have seconds to detect and resolve the issue before customers lose patience. A manually operated observability process will not meet such SLAs. Automation bridges this gap by transforming observability into a seamless pipeline—from ingesting data and alerting to spotting anomalies and triggering instant fixes.

Also, the escalating costs associated with downtime— per Forbes often exceeding $9,000 per minute—highlight how crucial this transition is.

For instance, say a leading bank notices periodic slowdowns in its online banking platform during peak hours. By identifying overloaded APIs as the root cause, an automated observability workflow can scale the necessary microservices to handle increased traffic. This approach ensures minimal downtime, continuous service delivery, smooth user experiences, and a reduction in manual troubleshooting efforts.

As banking ecosystems evolve with increasing complexity, driven by factors such as cloud migrations and the proliferation of microservices, automated observability will be indispensable for ensuring system stability and maintaining a competitive edge.

Trend 3: Shift-Left Observability

Traditionally, observability has been primarily focused on production environments. However, in 2025, we’ll witness a significant shift towards “shift-left” observability, where testing practices are integrated early in the development lifecycle.

Consider a bank preparing to launch a mobile wallet feature. Traditional observability solutions might identify bugs such as failed payment transactions or crashes post-launch. However, with shift-left observability, developers can simulate scenarios such as peak-hour transaction loads, test payment gateway integrations, and detect security vulnerabilities during the development phase, ensuring a smooth launch for customers.

Dynatrace excels in enabling shift-left observability. For example, during a major release, a bank used Dynatrace to monitor code changes in real-time within their staging environment. The tool’s AI-powered insights highlighted a potential memory leak in a new microservice. By catching the issue early, the DevOps team resolved it before deployment, avoiding costly downtime, reducing MTTR, and ensuring a smooth customer experience.

As banking systems grow more complex in 2025, shift-left observability will play a significant role in minimizing technical debt, strengthening collaboration between teams, to ensure faster, more reliable innovation to meet customer expectations.

Trend 4: Observability Integrated with Cybersecurity

With banking fraud losses reaching $486 billion globally in 2023, proactive security measures have become a high priority. Traditional defenses often fall short to counter increasingly sophisticated cyber threats like ransomware and phishing. So, integrating observability with cybersecurity offers banks real-time monitoring of vulnerabilities and swift threat neutralization.

Platforms like Dynatrace continuously analyze user behavior, detect anomalies such as suspicious logins or irregular transaction patterns, and prevent potential breaches. For example, it proactively flags and blocks unusual login attempts from foreign IP addresses, preventing potential breaches before they occur.

By combining real-time observability with advanced fraud detection, banks can safeguard customer trust, protect valuable data, and stay ahead of evolving threats.

Trend 5: Enhanced Customer Experience Monitoring

While banks invest heavily in digital services, a critical gap often exists in understanding the customer journey in real-time. This necessitates a shift towards end-to-end observability solutions that transcend basic metrics and provide a comprehensive, 360-degree view of customer interactions across all touchpoints in 2025.

Dynatrace leads this transformation by offering an AI-powered full-stack observability platform tailored for customer experience monitoring. It helps you to:

Track the full customer journey, from login to transaction completion.
Visualize customer interactions to pinpoint frustrations, like failed transactions using its session replay feature.
Resolve issues, such as slowdowns or error spikes, before they affect users using AI.

For example, when a mobile banking customer abandons the account opening process due to slow document uploads, Dynatrace can detect the pattern in real-time, identify the root cause, and suggest solutions, such as scaling server resources.

This proactive approach empowers banks to deliver seamless digital experiences, build stronger customer relationships, and gain a competitive edge.

Partner with QualityKiosk for Observability Excellence

As the banking sector continues to evolve, observability is a strategic advantage, ensuring that banks remain agile, resilient, and customer-focused. Notably, 47% of IT decision-makers highlight its role in achieving business KPIs, underscoring its critical impact on business success.

QualityKiosk is your trusted partner for achieving observability excellence in banking using Dynatrace. We offer end-to-end Dynatrace implementation, ensuring seamless integration across your infrastructure. Our services include real-time monitoring and 24/7 support to proactively identify and resolve issues, ensuring peak performance and uninterrupted service. With QualityKiosk, you can enhance system reliability and deliver a seamless customer experience.

To transform your own observability strategy, schedule a consultation with QualityKiosk today.

About the Author

Vivek Porwal

EVP, Consulting and Banking Practice Head QualityKiosk Technologies

Vivek Porwal, EVP, Consulting and Banking Practice Head at QualityKiosk Technologies, is a seasoned BFSI and digital transformation veteran with over two decades of experience in Consulting, QA, and Auditing. At QualityKiosk, he leads multiple digital quality assurance projects for major BFSI players worldwide. With a focus on areas like Digital Lending, Open Banking, and Omni-channel, Vivek’s domain expertise has enabled global financial organizations to achieve digital transformation and meet business objectives.

A frequent speaker at international forums, he covers topics like Digital Transformation, Digital Payments, Open Banking, RPA, and DevOps. Vivek is a CISA and holds an Executive Management Program from Harvard Business School, along with certification as a Master Agile Testing Professional (CP-MAT).