Current challenges in digital transformation of financial services
1. Competition against fintech
Competition from new sector participants, such as fintech behemoths, is fiercer than established financial institutions like banks and credit unions. They have more superior customer service (which is online, fast, convenient and time-saving) than conventional banks. Therefore, traditional financial institutions are racing to leverage tech to compete with their modern counterparts.
Many well-known banks have spent millions creating customized digital user interfaces. Yet, they started way behind fintech, how can they bypass them?
2. Rising customer expectation
Customers nowadays expect to be attended to, educated, and involved more in your business sector. Which means instead of going to the banks for a credit card application, they want to do it online themselves. Institutions that understand the need for fast processes and provide individualized service see more excellent client retention and lower churn rates.
Yet, due to the exponential growth of digital solutions, many applications can quickly become obsolete. This drives businesses to upgrade their digital landscape with cutting-edge features such as voice-enabled customer care, live chat, and autonomous chatbots.
As the user experience is enhanced, so are the users’ expectations. Companies need to improve their response times, accuracy, and customer-friendliness. Financial businesses that slowly adapt to the current trends may risk falling behind
3. Security issues in the digital era
Ensuring the safety of clients’ money and personal information is fundamental for every financial business. Nevertheless, this is one of the most significant difficulties banks encounters regularly.
Many attempts are made to penetrate the security systems of financial institutions every year. 82% of data breaches in the year 2022 were caused by human error, according to research conducted by Verizon.
4. Length development with traditional approach
Depending on the complexity, the duration of a typical software development project might range up to 18 months. There are too many procedures for any financial organization to wait to automate and improve their business operations.
Key takeaway
The potential threat of modern counterparts, the high demand for digital experiences, and the risk of security holes in the digital system have urged financial institutions to find a better solution than a lengthy traditional development process.
Being said to save development time by as much as 50–90%, low-code for financial services is the alternative that many conventional financial and fintech have used to promote innovation with automation.
What is low-code?
Low-code make rapid application development possible, which rely on visual building pieces like point-and-click and pre-built code to automate production. With this kind of automation, low-code developers can decrease manual coding and repetitive tasks to concentrate on what makes their product unique.
By facilitating collaboration between IT, citizen developers, and business experts to speed up application delivery, low-code for financial services is a smart approach to reduce coding efforts. In a nutshell, low-code saves digital pioneers time and energy, two of their most valuable commodities.
To fully grasp the power of this emerging technology, explore our full guide: What Is Low-code
What’s good about low-code?
- Inexpensiveness: Save your development budget and cut down on expense for recruiting developers. The average ROI of low-code platform is between 150% to even 300%.
- Enhanced Speed Of Deployment: Low-code is said to fasten the development up to 10 times. You may skip the tedious, time-consuming parts of the development process and get straight to customization (which is the most important part)
- Encourage Automated Tasks: With low-code’s BPM and RPA features, you can automate any processes from cross-department to departmental.
- Harmonious Teamwork: In software development, low-code can adhere the collaboration between IT professional and business users. One can share and prototype their idea, while the other execute. This will erase any misunderstanding and help businesses truly build software that matters. Navigate your IT backlog and lengthy delays by allowing anyone to partake in digital transformation. You can also set up access management and governance to make sure the usage of low-code in under control.
- Little Upkeep: Now that everything is standardized, pretested, and ready to go, fewer bugs and integration concerns exist with low-code platform.
- Freedom To Pursue Alternative Avenues Of Company Innovation: Save your headaches from managing lengthy development plan and offer more flexibility for your IT staff to go on other innovations.
Is Low-code truly that good? Breakdown both side of Low-code: Its Pros & Cons
Leverage low-code for financial services
1. Rapid application development
Low-code for financial services may significantly shorten the time to create new software. These platforms provide programmers with a toolkit for rapidly prototyping, development and deploying software with minimum code. Because of this, enterprises may build apps far more quickly than they could be using more conventional development techniques.
IT Department and Fintech startups can leverage low code to build a minimum viable product (MVP) to test its functionality and market fit quickly before scaling it up. This is highly beneficial for financial enterprises, who must constantly adapt to market trends and changes.
2. Deliver better digital user experiences
Customers have come to anticipate internet banking, and this tendency will only increase. A consulting company, Kearney, projects that 70% of all new bank accounts, deposits, consumer loans, and credit card applications will be processed electronically within three years.
Furthermore, research shows digital customers have unprecedentedly high expectations for feature support and service availability. Low code platforms in banking can change the industry in many ways, one of the most apparent being the speed with which it can provide a retail-like experience for clients.
Customer service departments may benefit from low-code platforms to craft seamless and personalized user experiences. For example, you can build:
- Low-code portal with chatbots to answer all the questions
- Finance mobile application to provide digital transactions
- Low-code Data application to save and analyze client information
3. Transform your operation with automation
Low code for financial services isn’t used for web and mobile app development only. You can also leverage it to build business automation tools. Most low code platforms have robotic process automation (RPA) features with agents that can be trained to do tedious and manual tasks.
Examples of using low code for financial services automation:
- Customer onboarding process
- Account closure process
- Bank Reconciliation management & process
- Loan, credit card application processing
- Daily generate automated reports
- Enhance trade finance operation
4. Reducing internal risks
In a world where IT resources have expanded slower than the demands of business applications, low-code platforms provide a way to meet urgent requirements without relying on a large IT staff. Yet most financial services have used Excel spreadsheets for years. Even though it allows for convenience and efficiency for internal uses, this solution lacks good governance, data lineage, or security, posing a danger to clients’ sensitive data.
This requires a centralized system to minimize these risks, and a low-code platform can help build and maintain one.
For example, you can use financial low code platforms to build an application with anti-fraud policies. The app will then leverage machine learning to predefine potential risks to users and alert suspicious transactions to your business. This helps increase customer confidence in your financial services and improve their overall experience.
5. Data integration into a comprehensive platform
Various aspects of customer identification and banking operations (know your customer checks, fraud detection, transaction records, loan and credit history, anticipated banking behavior, etc.) are often handled in siloed databases and internal bank systems.
From time to time, these systems are interconnected and challenge to communicate. In contrast, your employee must switch between platforms for detailed information. As a result, investigations take longer and are more complex than necessary.
Businesses are using low code to consolidate all this data with a complete picture of assets. These low code for financial services platforms can also merge financial records from numerous accounts and third-party sources into one. Sometimes, it combines machine learning and business intelligence to report current trends and potential opportunities.
Real-life use case of low code in financial services
- RBC Wealth Management uses low code to speed up their bank account register. This low-code-made tool also facilitates smoother data transfer across RBC’s various platforms.
- Academy Bank, another financial institution, has developed an app for monitoring PPP Loan using low code. Another example is ING Bank, which employs the low-code suite to handle credit and political risk insurance.
- Standard Bank, headquartered in South Africa, has established a center of excellence to empower employees to take charge of their digital transformation. One of the first projects to be deemed a success was introducing a low-code ATM inspection solution, which enabled the rapid development of a mobile app prototype in only 24 hours. There are now over 300 employees using the app to produce over 5,000 inspection reports every month.
- The Yorkshire Building Society Group is the third-largest building society in the UK, providing customers access to mortgages, insurance, and savings accounts. YBS Group needs to update its self-service software to better serve its roughly three million clients. Its new online mortgage calculator and savings account application benefited from the low code for financial services approach. The number of mortgages closed increased by 54%, and the pace at which new savings accounts were opened increased by 40%.
Top low-code platforms in financial services
Choosing low code platforms for financial services can take more time to consider than other industries due to 2 reasons:
- The data of financial services is very sensitive, which requires a secure platform to protect.
- Most financial tasks need to be done with caution and precision, from paperwork to process management. One wrong step can lead to a much bigger problem. Thus, it calls for a flexible and stable low code platform that can deal with multi-step processes and advanced automation. In this case, an enterprise-level tool is a better solution for finance institutes.
To help you make better decisions, we have gathered a list of low code for financial services software that matches the above fundamental requirements.
Need more choices? We have also reviewed the top 21 low code platforms in detail!
- Microsoft PowerApps: A perfect choice for professional-grade applications that many top brands trust, including the financial industry. If you’ve already used Microsoft Office, PowerApps can easily be integrated into your system for basic to complex application development and process automation. In some cases, Microsoft SharePoint can be another alternative for PowerApps in intranet development. Learn how PowerApps transformed this Rabobank internal process automation.
- Outsystem: Focusing on high-performance, Outsystem leverages AI and cloud technology to build cutting-edge applications, comprehensive process automation, and customer services management tools.
- Synodus Low Code Platform: Designed by us for the intricacies of financial businesses and digital banking, this transformative platform can quickly build simple to complex applications within 8 weeks. It brings customer-centric banking to the fore, promoting transparency and providing customers with more choices for a better banking experience.
- Pega: It provides an easy-to-use interface with advanced features to create enterprise-ready applications for CRM, Case management, and Robotic process automation.
- Sitecore: For financial services, you can use Sitecore’s robust functions to customize your Customer Management, Asset Management, Website, and Content Management System
- Salesforces Lightning: This is among the top choices for scalable cloud applications and complex mobile applications in financial services.
- Genexus: Same as Outsystem, Genexus uses AI to promote a coding environment for flexibility, scalability, and high performance on cloud and on-premises applications. It has a wide range of features and is suitable for individuals, startups, and enterprises.
Being the gold partners of Microsoft PowerApps, Salesforces and even have a platform of our own, you can entrust us to find the best low-code solution for your case.
If you are looking for consultation and support in low-code development for your finance business, our experts are ready to carry out robust applications and optimized automation processes.
Wrapping up
Low-code for financial services is a great alternative to the time-consuming traditional coding method. Yet, for the best use of it, businesses should leverage low-code with customization while encouraging professional coders to work with citizen developers and business users. Low code should be used as a tool, not a replacement for traditional development. A good low-code platform can bring a fast application development process and seamless process automation.
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