‍The future of banking: leveraging low-code platforms for agile service development

The future of the banking sector is being shaped right now and it’s happening fast. Three majorly influential factors are evolving at breakneck speed:

• Customer expectations
• Technological advancements
• Regulatory pressures

As digital-first interactions become the norm, traditional banking institutions are grappling with the need for more agile and responsive service development and delivery. 

The competition is no longer just conventional banks. Fintech startups, who are on the cutting edge of technology, have completely redefined what consumers expect from their financial service providers. Customers now demand digital-first, seamless, personalized, omnichannel banking services that are available 24/7. 

According to 10x Banking, which surveyed 150 decision-makers and 150 product managers at major banks in the UK, and the EMEA and APAC regions, banks are losing up to 20% of their customers to competitors due to inferior customer experiences. 

That’s why digital transformation in banking extends beyond online presence - it requires reimagining existing business models, processes, and systems to foster innovation and agility, enhance customer satisfaction, and achieve operational excellence.

Low-code platforms: A game-changer for banking innovation

64% of banks claim that slow digital transformation has directly resulted in them missing out on winning new customers and 74% of banks aim to to accelerate their digital transformation.That’s according to 10x Banking.

That’s why Low-code platforms are proving to be so important for banks. Developing a customer service usually demands extensive coding and testing, often extending over several months. Low-code platforms speed up digital transformation by allowing the bank’s own team to bypass these challenges without writing a single line of code.

These types of platforms redefine the process of service development and provisioning, making easy for professionals without a deep background in coding or software development to create customer journeys, automate workflows, and integrate various systems with a few simple actions.

For example, using a Low-code platform, a bank’s team could set up a digital loan application customer journey using digital data intake, allowing customers to apply for loans online, upload necessary information, track their application process, and receive updates. The customer journey can built to automatically tailor itself to the needs and risk factors for different customer segments.

This approach not only accelerates service development and provisioning from several months to mere weeks or even days, but also ensures the bank remains competitive and customer-centric.  By democratizing the creation process, Low-code platforms enable banks to swiftly respond to market demands, regulatory changes, and technological advancements.

Moreover, Low-code solutions aren’t just about speed; they also open the door to innovation. By lowering the barrier to entry for service development, banks can foster a culture of creativity and experimentation. This encourages a broader segment of employees to contribute ideas and solutions, leading to more diverse and innovative banking services.

Implementing low-code platforms with strategy and safety

Even though banks are embracing a digital-first approach, the path to a successful digitalization involves many challenges. In fact, according to McKinsey, 70% of digital transformation projects fail:

“Common pitfalls include a lack of employee engagement, inadequate management support, poor or nonexistent cross-functional collaboration, and a lack of accountability.”

Banks must also navigate a complex landscape of regulatory compliance, cybersecurity threats, and legacy system limitations, all while trying to introduce innovative services as quickly as possible. This level of pressure to adapt and thrive in this dynamic environment is intense, underscoring the increasing need for agility and flexibility in terms of creating and deploying new service offerings. 

Here are a few key strategies to help banks effectively deploy Low-code platforms:

• Get upper management buy-in and cooperation
  According to McKinsey, digital transformations are 1.6 times more likely to succeed if the Chief Digital Officer is engaged in the process.
• Start with a digital data intake platform
  A Low-code digital data intake platform provides an excellent entry point for digital transformation. This foundational step simplifies the collection, processing, and entry of customer data into banking systems. By automating data intake, banks can improve accuracy, reduce operational overhead, enhance the customer experience, and clear the way for further digital initiatives.
• Establish clear governance and oversight
  Design and implement a clear governance framework for overseeing the selection, implementation, and use of Low-code platforms within the bank. This should include policies on platform selection, development standards, and deployment procedures to ensure consistency and compliance with regulatory standards. Oversight mechanisms are crucial for maintaining control over the development process and the quality of the output.
• Carefully integrate with existing systems carefully
  Effective integration improves operational efficiency and prevents data silos, enabling a unified view of customer information. That’s why it’s so important to ensure that Low-code solutions are able to seamlessly integrate with the bank’s existing IT infrastructure. This involves evaluating the compatibility of Low-code platforms with legacy systems to ensure secure data exchange between systems (that also complies with regulatory standards).
• Prioritize security and compliance
  When deploying Low-code platforms, banks must conduct thorough security assessments to identify potential vulnerabilities. We recommend adopting platforms that are familiar with the finance sector, offer robust security features and compliance capabilities, and regularly update security protocols to protect against evolving threats.
• Foster a culture of innovation and collaboration
  Create a culture where employees across departments can participate in the development process. This encourages collaboration between IT and non-IT staff, leveraging the collective expertise of the organization to create innovative solutions. Providing training and resources on Low-code platforms can give employees the tools they need to contribute to the bank’s digital transformation efforts.
• Implement iterative development and continuous feedback
  Adopt an iterative approach to development, allowing for continuous improvement of digital services. Make sure to get feedback from both internal and end-users, so you can refine and enhance applications. This agile methodology ensures that banking services stay responsive to customer needs and market changes.

Best practices for seamless integration of Low-code solutions in banking

As described above, implementing Low-code solutions into existing banking systems and workflows demands a strategic approach to ensure efficiency, security, compliance, and continuity. To achieve this, banks should consider the following best practices:

• Conduct a thorough system audit: Review your organization’s existing IT infrastructure to identify systems, applications, and data flows. It’s important to understand the current landscape in order to determine how Low-code solutions can integrate without causing bottlenecks, redundancies, and other issues.
• Define clear objectives: Set out specific goals, such as improving customer experience, speeding up service development and deployment, or enhancing data intelligence. Clear objectives will help guide the selection and customization of Low-code solutions so they align with your business goals.
• Ensure data consistency and integrity: As Low-code platforms are integrated, maintaining data consistency across systems is crucial. By implementing data governance practices, you ensure that data remains accurate, complete, and consistent across all banking systems.
• Use APIs for smooth data exchange: APIs play a critical role in enabling real-time data flows and connectivity by facilitating secure and efficient data exchange between Low-code platforms and existing banking systems.
• Adopt scalable solutions: Choose platforms that can scale as you grow. As your bank expands its digital offerings or experiences increased transaction volumes, Low-code solutions should scale accordingly without loss of performance.
• Focus on user training and support: Maximize the benefits by investing in training programs for your staff, ensuring they have the knowledge and tools they need to effectively use and manage these solutions.
• Monitor and evaluate performance continuously: Establish mechanisms for ongoing monitoring and evaluation of the platform. This includes tracking performance metrics, user feedback, and system health indicators. Ongoing and regular assessments make it possible to identify areas for optimization, ensuring the integration continues to meet its objectives over time.
• Maintain robust security and compliance measures: Integration should never compromise security or regulatory compliance. Ensure that Low-code solutions adhere to the bank’s security policies and regulatory requirements, incorporating encryption, access controls, and audit trails. 

Embracing agility through Low-code platforms

The agility offered by Low-code platforms isn’t only about speed - it's about the ability to adapt, innovate, and respond to customer needs, market trends, and compliance regulations, with precision and efficiency. 

Low-code platforms are powerful tools in this context, offering banks the opportunity to bypass the challenges and resources required in a regular software development process, enabling fast service creation and distribution.