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5 Things I Wish I Knew About Low-Code for Financial Services Digital Transformation

In 2017, I was recruited to help a regional U.S. bank embark on a digital transformation. The goals were lofty but clear: Improve the function and user experience of our digital products and differentiate ourselves from regional and national competitors.

Like most in my field, I approached the challenge from my comfort zone and started researching off-the-shelf solutions. So we searched for a COTS vendor, and 3.5 years and $3.5 million later, a commercial-use COTS product was in place. End of story, right?

Yes, but it could have been different. When I learned about low-code application development in early 2021 and joined Mendix a few months later, I realized that low-code isn’t just something that sounds nice but won’t apply to banks. It can solve many problems and drive digital transformation strategy for any financial institution.

My first instinct was to select a traditional off-the-shelf solution because I believed that was the only option. Custom in-house development wasn’t feasible, so it made sense to go with a pre-built solution.

If I had known about low-code application development sooner, we could have accomplished more, reached our bank’s goals faster, and stretched our development dollars further. Low-code application development gives banks access to technology they’ve never had before. Here are some of the things I wish I had known.

1. It Exists

Low-code isn’t something on the radar of many financial institutions, but if you’re reading this blog, you’re ahead of the game.

Roadmaps have traditionally relied on development strategies that have been in place for years. They’re often restricted by cost, resource crunch, conflict between business and IT needs, and maintaining legacy systems.

However, low-code dev platforms (with Mendix the best available) can help banks develop applications, web portals, user interfaces, and other digital customer experiences at speeds and costs traditional development can’t dream of touching.

Mendix makes development a visual process with high levels of abstraction and automation. Development becomes a collaborative, iterative project with fast results and fantastic customer satisfaction. Mendix provides the single innovation platform to bring that all together.

To read more about low-code, check out this guide.

2. It Can Do Anything

Off-the-shelf software products are designed to solve a specific, common problem. The problem is that your competitors are probably using the same exact product and having the same exact customization problems that you are.

Differentiation in customer experience sets the most successful financial institutions apart. That differentiation is impossible if everyone offers a similar experience.

Mendix can stretch to meet almost any need.

For an example of how one bank used Mendix to revitalize their digital customer experience, read the story of Al Baraka.

3. Low-Code Is Easy to Use and Saves on Resources

In the banking industry (especially smaller, regional banks), budgets are tight and resources are limited. You may have a list of 60 priorities to address in the next year, with only the resources to tackle five. When it comes time for digital transformation, you can only do what you absolutely have to do. Innovation sounds great, but how do you get there?

The demands placed on development teams have never been greater. They are overwhelmed with requests to automate processes, improve customer-facing applications, build new applications, replace legacy systems, and the list goes on and on and on.

Low-code application development is designed to be visual, and anyone can work on it. Many organizations using Mendix are even implementing citizen developer programs to bolster their resources and allow the business to help drive solutions.

4. It’s Fast and Affordable

For my bank, selecting a vendor took 12 months, and it was another 3.5 years before a fully functioning product for commercial clients deployed.

In addition, our vendor cost $1 million per year, tying up a significant amount of our budget for a long time. In today’s environment, it’s essential to spread resources and pivot quickly to respond to market needs.

Compare this to a low-code application development experience. Low-code can reduce application development time by up to 90%. It would have taken Development Bank of Canada 2.5 years to build and deploy a new core lending system with traditional coding, but it only took eight months with the Mendix low-code platform.

Faster development means you can cross more items off your priorities list.

5. It’s Easy to Get Started

With many financial institutions stretched past the limit already, the idea of bringing in new technology like low-code sounds like a tough ask. Believe me. I’ve been there.

To help with this, Mendix continually releases new solution templates that are a launchpad for your low-code development process. These have years of banking experience behind them and can make the accelerated workflow of low-code even faster. Some of these include:

  • Customer Onboarding: This template is designed to make the crucial experience of customer onboarding an attractive and intuitive one for customers.
  • Native Banking App: This accelerator can help you get there and includes features like biometrics and chatbot access.
  • Loan Origination: Applying for loans is incredibly stressful for your customers on their own. Dealing with outdated processes and multiple systems only compounds that and can lead that customer to look elsewhere. This solution template lets customers input all their information at once and gives your team the tools to accept or reject. If you like, you can even add critical parameters that lead to automated accepts and declines, saving you valuable time and getting the customer to their endpoint faster.

These accelerators connect to your core systems and can be modified for your workflows and branding. Imagine rolling any of these systems out in weeks rather than months. Having solutions that get banks to digital transformation, delight customers, and get to the market quickly sounds too good to be true. But it isn’t.

Hindsight is absolutely 20/20, but when I look back at my bank’s digital transformation strategy, I see that utilizing low-code for application development could have gotten us to where we needed to be cheaper and faster.

If you’re looking at an offering of off-the-shelf platforms, you’re probably also looking at a suboptimum user experience. If you’re looking at all custom platforms, you’re probably spending a ton of time and resources on maintenance. Mendix provides the speed of off-the-shelf app development with the flexibility of custom.

I recommend that any financial institution pick a smaller project that would be on the “nice to have” section of your roadmap. Use that as a test platform for low-code to create a fast solution. It doesn’t have to be perfect, so long as it works and builds confidence within the organization.

Those initial successes and learning points roll over into your following projects and continue to accelerate the development process. My own viewpoint on Mendix continues to evolve by the day, and I’m continually thinking of how low-code can help financial institutions win. You can bring that mindset to your organization today.

Talk with your IT team and take an audit. Are there gaps that low-code can fill? Areas that you can test in? Let Mendix help you shape your development roadmap, and you’ll be able to look into the future instead of the past. The steps you’ve already taken toward digital transformation now matter, but it’s the next ones you take that are the most important.

If you’re interested in more information, do read 5 Things I Wish I Knew About Low-Code for Financial Services Digital Transformation blog from Mendix.

Post by Richard Eastley

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