From online banking to mobile payments, it’s fair to say the financial services industry is significantly ahead of many others when it comes to technology.
Traders, as well as customers, are now armed with the latest advances in technology and able to operate at super speed with more information at their fingertips than ever before.
However, the sector has not been immune from challenges created by COVID-19. As we prepare for a post-COVID, post-Brexit world, it’s time to reflect on how the sector has adjusted, and the challenges that lie ahead.
Upgrading the system
The financial services sector is certainly quite complicated. There are many different regulatory bodies that monitor corporate conduct and issue new regulations that the industry needs to implement quickly to stay compliant.
This makes the job difficult for IT managers in the sector – and the COVID crisis has made matters even worse. The better part of the industry still runs on dated legacy systems that are ill-suited to support the needs of an industry that is having to adapt to working remotely. Changing these systems is easier said than done; customers must be able to access their finances, and transactions need to happen in real-time if the sector wants to survive the pandemic. To avoid any service disruption, IT managers need to ensure that their operations keep running for customers while they update their infrastructure. For IT managers, this means working on system upgrades a little at a time, rather than doing a system overhaul.
The digital imperative
If the lockdown has taught us one thing, it’s that we can operate well regardless of our location – and that digital transformation is critical for the survival of any industry, at least until we find a permanent cure for COVID. Luckily for the financial services sector, it had a head start: most customers are familiar with mobile and online banking and organisations already rely on digital data and archiving. For the financial services sector, the new challenge was not figuring out how to embark on its digital transformation, but how to accelerate it and focus on the challenges the pandemic was putting the most pressure on. We recently ran a poll in the industry, and we found that IT leaders in the sector have been prioritising three areas: accelerating their remote working solutions (70%), enhancing their online and mobile banking offering, and increasing their use of automation (60% each).
These are three crucial areas, which traditionally required a big team of developers working full-time for months on a single project. The COVID pandemic has shown that this way of working wasn’t sustainable: instead, tech teams need to be able to juggle between projects, adjusting their priorities as and when required. To do so, they require a different approach to their operations.
This is where low-code comes in. With low-code, even the most traditional financial institution can rival the innovation pace of nimble fintechs. And now is the time to act: according to our research, 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.
The age of low-code
Today, IT teams need to look beyond themselves and collaborate with different departments to create revenue-generating services that truly answer the clients’ needs. This requires providing both developers and non-developers with tools that enable them to operate together.
Mendix’s approach to low-code is one way to foster this collaboration: by allowing businesses to create two integrated development environments, it enables non-technical staff to be involved in the development of business applications, working hand in hand with the IT team. It requires no coding expertise, meaning software development or the creation of business applications can include staff with non-technical backgrounds.
Instead of having a back and forth between tech teams and other departments – and risking miscommunication at every step of the project – low-code enables both technical and non-technical teams to use the same language and to develop apps together, bringing together those that understand the business problems with those that understand the IT landscape, core systems and services to contribute to the vision of a product. IT stays in control with governance and guardrails built in to ensure compliance to the various standards required.
As the financial services sector embarks on the next phase of its digital journey, 82% of IT leaders in the industry consider that cloud-based collaboration tools are a necessary feature of any mature financial institution. It’s therefore no surprise that low-code is the area most of them plan to invest in in 2021 – before AI and automation, or videoconference tools.
And we can only welcome this decision.