Bank of the Future

The Low-code/No-code Mantra for the Agile Financial Services Enterprise

 
November 20, 2020

A business partner at an insurance firm recently expressed frustration that by the time technology understood their needs and developed a solution, business had moved on. 

Conversations across business and technology stakeholders bring to light some recurring themes that affect agility and business innovation in banking and financial services. These are:

In summary, digital skills shortages, legacy applications, and a slow technology investment cycle are hindering the digital transformation programs at traditional financial institutions.

Most firms either accept these significant overheads on cost and time to market, or conduct a war of attrition with limited gains. ​​​​​​​​​​​​​​Low-code/no-code platforms disrupt these 'facts-of-life' by enabling safe, agile innovation and cost reduction.

Can Low-code/No-code Deliver?

Let us test the viability of building a low-code/no-code app by a non-developer.

As a proof of concept, let’s look at an insurance product configurator of medium complexity in user interface (UI), integration, and data. A product configurator managed by business, but working within the actuarial framework, would bring tremendous agility to underwriters to adjust risk appetite and respond quickly to the market.

The results were impressive! A working prototype was built on the first day and a minimum viable product (MVP) was ready in a week’s time. The build experience was also intuitive, i.e. the underwriting support team could build and maintain the app, without significant technology support. 

Banks and financial institutions can accrue real benefits through the low-code/no-code approach:

  • A robust citizen development program drives innovation while reducing business risk

  • Scale digital application development for 'legacy' developers to use AI and modern user experience (UX)

  • Reduce time-to-market by 40-60% using rapid application development

  • Reduce cost of change by up to 35%, working across siloed applications

The Right Strategy

Firms that wait and watch may get left behind while the ones using the low-code/no-code strategy for digital transformation will ace the game. That said, enterprises will need to exercise a great deal of caution as platforms typically have expensive vendor lock-ins and the operating landscape changes rapidly. Moreover, to questions around control and ownership of data and services continue to persist. Meanwhile, Google's AppSheet, Amazon's HoneyCode and Microsoft PowerApps investments can transform this space.

To realize its full value, treat low-code/no-code as part of enterprise strategy rather than a mere tool. Some key considerations in doing that are:

  • Business case and ROI: Starting with a list of use cases can land enterprises with yet another orphan platform. Foundational work on strategies for adoption, citizen development, software development lifecycle (SDLC), internal support services, and workforce enablement should inform the low-code/no-code strategy. Focused ROI measurement and governance are required until the adoption reaches maturity.

  • Choice of platform: Platforms such as Appian, Mendix, and Outsystems demonstrate broad capabilities for application development, while there are some like Airtable and MailChimp that are designed to address niche business needs. Architectural evaluation aside, platform selection must include business partners and consider fitment across business strategy, vendor product roadmap and investment plans, intellectual property (IP) and controls, availability of accelerators and/or app ecosystems, and so on.

  • Interoperability: Philosophies differ on the approach to integrating external (enterprise) services such as automation, data, and SaaS platforms. Interoperability with the enterprise technology stack is inconsistent. RPA interoperability for example, brings great value, but the capability is only maturing.

  • Use cases: Identifying high impact use cases to drive success and adoption is critical. Our assessment of use cases across the financial services industry revealed not only areas of significant acceleration – for example, Bordereaux processing and client onboarding – but also key constraints. An assessment framework is a must to identify the right use cases that ensure a fit-for-purpose platform. 

The right low-code/no-code strategy can greatly accelerate digital transformation in the financial services industry. Firms must leverage agile, automation, intelligent, and cloud technologies to drive exponential growth. The low-code/no-code approach has immense potential to overcome legacy and workforce constraints enabling banks to effectively compete with fintechs, particularly on agility and adaptability aspects. If you haven't considered it yet, do it now!

Kiran Hariharan is a domain consultant in TCS’ digital practice for Banking, Financial Services, and Insurance accounts, where he advises clients on reimagining business models using digital technologies, human centered design, and design thinking. He has over 20 years of consulting experience in technology, business, and operations across banking, insurance, and capital markets in the US and the UK.