IT teams must deliver innovation that’s fast, reliable and secure, and that supports many divisions — all at once. It’s a big challenge, but Nick Ford believes low-code technology is the answer.
Financial services are the poster child of great digital transformation. Today, Britons can pay from their watches, check their balance directly from their phone at any time and even automate trading.
This level of innovation isn’t only about customers; traders are able to operate faster than ever before thanks to better predictive analysis and forecasting tools, and finance teams are able to collaborate from anywhere in the world.
While we embrace all this innovation, it’s easy to forget that the reality of the sector is incredibly complex. The radical changes induced by COVID-19 have highlighted how challenging maintaining innovation today really is, while putting more pressure on IT teams to accelerate the digital transformation of the sector even further.
Financial services technology is a sea of complexity
Financial services are complex. There are thousands of products to choose from, from savings to investment and mortgages. These services are then managed by lots of different companies, creating an additional level of complexity – banks, fintechs, brokers, wealth management specialists, government bodies… the list goes on.
To add yet another layer, there’s a network of regulations, which change over time, forcing IT leaders to constantly keep on top of the latest evolution in the sector. Knowing these is only the first step: every time new laws are implemented, the sector needs to adjust to them, and that can mean anything from revising security protocols to radically changing the way information is processed, transmitted or audited.
This may already look complicated, but the real complexity starts underneath, in the realms of processes that the IT manages to keep the company operating as normal.
It would be fair to say that the mission of financial IT leaders is often underrated. They deal with antiquated systems dating back decades, inadequate data management processes and minute security and compliance considerations every day, simply to keep the business afloat.
Add to this the need to get all staff to work remotely during the lockdown, and the already time-poor IT leaders are now completely swamped.
Tech as a raft
While the sector is mired down with complex processes and inadequate tools, it also needs to deal with a major challenge: fierce competition for tech-savvy customers.
Now, all banks, investment firms and wealth management companies are investing in tech to help them cope with new customer demands for easier access to their capital and increased transparency.
Tech is no longer a fintech privilege – it’s a currency. So much so that nine out of 10 IT leaders in financial services believe their firm will need to invest in digital projects over the next two years, just to survive in a rapidly changing market.
And this is not just about pleasing digitally-minded customers: it’s also about improving productivity and operational efficiency, harnessing data and solving compliance challenges.
This balancing act between priorities is gathering pace and spreading across the business. Today, IT teams must deliver innovation that’s fast, reliable and secure, and that supports many divisions — all at once.
It’s a big challenge, but it’s one that IT leaders are willing to tackle head-on: two-thirds of IT leaders believe the value of digital transformation initiatives outweighs their inherent risk.
Yet, IT leaders know that rushing would be a mistake: although IT teams face high demand for their support, most would not prioritise speed over caution, even if they could innovate faster. This measured pace ensures that financial organisations are delivering the right solutions at the right time, reducing the risk of service disruption and security challenges.
Low-code to the rescue
To manage all these priorities, the IT team needs to look beyond its own team to create revenue-generating services that truly answer the clients’ needs – and it needs to empower all developers with the right tools to do so. This improves collaboration between IT and customer-facing staff to design services that suit the needs of the customer base while reducing the pressure of an already-stretched IT team.
Low-code software development provides a simple solution to address these constraints and challenges. Based on a visual approach for building applications using drag-and-drop components, it enables non-technical staff to participate in creating business applications, even if they have little to no coding experience.
Working separately or in close collaboration, professional developers and business-side “citizen developers” can create, iterate and release applications in a fraction of the time it takes with traditional methods, all under the watchful governance of IT to ensure their applications comply with enterprise standards and architecture.
A low-code approach allows for flexible, iterative app development for many use cases in the financial services sector, including legacy application upgrades to comply with new regulations, apps supporting smart banking or portfolio management, and mortgage application management.
With low-code, the financial services industry has the right tools to untangle its complex processes, simplify its evolution and focus on its core mission: keeping the economy thriving.
Nick Ford is Chief Technology Evangelist at Mendix.
The views and opinions expressed in this Viewpoint article are solely those of the author(s) and do not reflect the views and opinions of Fintech Bulletin.