Financial entities face increasing complexity in digital operations, making resilience, compliance, and incident management more critical than ever. Heath Newburn, PagerDuty’s Global Field CTO, shares his expertise on tackling these challenges, balancing innovation with compliance, and building operational resilience for lasting success.

What are the top challenges that you hear from IT leaders in regulated industries like financial services?
Compliance is one of the biggest challenges I see, as regulatory concerns often slow the adoption of innovative technologies like generative AI. Legacy technology is another major hurdle—banks must balance layering modern solutions on older systems while delivering seamless digital experiences and maintaining backend stability. Finally, managing stakeholder expectations is tough, especially in regions with fragmented financial systems where creating cohesive and compliant platforms is far more complex.

How are your financial entities’ customers balancing innovation with the need for security and regulatory alignment?
It’s really about figuring out where you can accept some level of risk. Leaders who foster a “blameless” culture often find that calculated risks pay off. I worked with a CIO at an insurance company who challenged his team to accept smart risks. How much better would their client experience be if they weren’t 3 out of 3 but were out of 10. That shift in mindset allowed the organization to innovate and move forward without compromising compliance.

Customer experience is crucial in financial services, especially during disruptions. How do you see this evolving?
Understanding your customers is key—whether that’s your end-users or internal teams like retail banking or brokerage groups. Millennials and Gen Z are looking for apps that are user-friendly and always accessible. Observability tools play a huge role here because they give you real-time insights to keep experiences seamless.

Transparency is just as important. I’ve seen how something as simple as a public status page can build trust. One bank used it to share updates during disruptions, and it made a big difference in customer confidence. It’s a small step that sets a great benchmark for trustworthiness.

As regulatory standards grow stricter, how can leaders manage compliance costs while keeping infrastructure costs in check?
Automation and AI are real game-changers. When organizations scale automation, it takes repetitive tasks and errors off the table, making everything run more efficiently. That means teams can focus on bigger-picture goals, like prepping for regulations such as Europe’s Digital Operations Resiliency Act (DORA). Plus, AI is a huge boost for junior staff. It lets them tackle more challenging problems, which not only upskills the team but also creates a workforce that’s more agile and ready to handle compliance challenges.

What strategies are effective in modernizing legacy systems without disrupting service? Is AI playing a role?
Modernizing legacy systems is no small task—it’s expensive and time-consuming. That’s why many financial entities are taking a hybrid approach. They’re keeping critical workloads on-premises to control costs while moving select applications to the cloud where it makes the most sense.

AI is making a big difference here. It’s helping financial entities analyze and refactor complex legacy code, allowing for gradual system updates without any service interruptions. This approach not only saves time and money but also makes modernization efforts much more manageable.

How can financial entities foster cross-functional collaboration to improve operations?
Silos can actually be pillars of excellence, but the challenge is that they often don’t communicate well with each other. Creating a shared framework and common language can help bridge these gaps. When teams understand each other’s strengths and work collaboratively, operations become much more seamless and effective.

How is AI reshaping incident management, and what should leaders prioritize?
AI is a game-changer for onboarding and upskilling junior team members, especially in roles like Site Reliability Engineering (SRE). It’s speeding up the process significantly—what used to take months can now be done in weeks. Leaders should focus on using AI to take care of routine tasks while ensuring compliance. This frees up teams to work on more strategic, high-impact initiatives.

What strategies would you recommend for building operational resilience in financial services?
Resilience starts with clarity. You need to define what operational resilience means for your organization and tie it to clear success metrics—things like SLAs and OKRs that are directly aligned with customer expectations. Once that foundation is set, incorporating AI and automation becomes a powerful way to streamline value streams and improve efficiency. These tools not only ensure robust, end-to-end operations but also make it easier to adapt as the landscape evolves.

PagerDuty works with financial entities dealing with legacy systems and fragmented operations. How does PagerDuty help these organizations move toward more unified, resilient infrastructures? And what kind of positive business impact have you seen come from that?
At PagerDuty, we make it simple for financial entities to connect both new and legacy systems through our 750+ integrations. This creates a unified response platform that consolidates monitoring and standardizes how signals are treated. Automation plays a big role here—it’s our first line of response, which reduces the need for human intervention in routine tasks. That means teams can dedicate their time to strategic priorities, ultimately improving resilience, enhancing user experience, and driving operational excellence.

For a deeper dive into these strategies, check out the PagerDuty Financial Services web page.