How to Accelerate Digital Innovation in Financial Services with Low-Code

Digital innovation projects in financial services are extremely complex. Across the industry, companies are hampered by a lack of resources and outdated and inflexible core systems. As a result, roadmapping turns into a must-have, not a nice-to-have. Innovation feels like a faraway dream when faced with a litany of compliance- and maintenance-related mandates.

When an IT project gets moving, a shortage of expertise, resources, and time means that many banks are faced with an impossible choice: See immediate — and often incomplete — results, or commit early to spending months or years (and untold amounts of money) to get to the finish line.

It may be tempting to throw your hands up in frustration. But low-code application development enables digital innovation in financial services, creates business value through easier, faster, and cheaper solutions, and results in higher customer satisfaction.

How Financial Institutions Use Low-Code to Meet Digital Innovation Goals

What is low-code? A low-code platform is a visually based application development platform that allows you to prototype, test, and release in weeks instead of years. Low-code apps can connect to your core system and are designed with customer experience top of mind.

Low-code makes development more accessible to teams with varying skill sets, and many users come from backgrounds other than software development.

With low-code, you can:

Leverage existing resources to make meaningful progress
Design with the customer experience in mind
Automate processes for customer services

1. Leverage existing Resources to make Meaningful Progress

Hiring a software developer can lead to months and months of waiting and plenty of money spent. But with low-code, financial institutions can use citizen developers to accelerate delivery.

Citizen developers come from different parts of the business, and they don’t have a traditional coding background. If someone on the business side sees a problem, they can build and prototype a solution using low-code. For a financial institution, that can mean easing customer onboarding by creating a simple, elegant portal that allows easy registrations.

2. Design with the Customer Experience in Mind

Covid-19 caused many customers to switch to virtual or online solutions when interacting with financial institutions. In a recent study, 41% of respondents found that about 50% of their customers switched from in-person to digital services in 2020. This means that to keep up with the competition and to meet customers’ needs, financial institutions need to continue investing in customer experience solutions.

Low-code empowers institutions to do just that. Washington Federal Bank, a retail and commercial bank managing around $18 billion of assets, needed to innovate its UX. Competitors were moving, and customers were demanding change. A migration could take up to 3 years, so there was no time to waste.

Washington Federal tried an off-the-shelf solution, but they couldn’t customize that solution to their needs, and they scrapped it after eight months. Needing a solution that could get them ahead immediately, Washington Federal turned to low-code.

Within six weeks, the Mendix low-code platform helped Washington Federal eclipse what their previous vendor had done in eight months. Less than a year later, Washington Federal had an online banking portal built on low-code. Customers can enroll, see their information, transfer, and pay bills. All of this is personalized to each customer. And, maybe best of all, the portal integrates seamlessly with Washington Federal’s existing APIs and systems.

Rabobank also faced a big issue with their customer-facing savings experience, used by 500,000 people each year. Customers were having trouble with the interface, leading to churn. However, any kind of upgrade would be complicated. Being multinational meant that Rabobank had unique IT in each country. Plus, shifting regulations and compliance requirements would always take hold over CX upgrades.

By selecting low-code to build their new online portal, Rabobank realized a 50% reduction in IT cost. Their existing teams were able to develop on the Mendix platform quickly and easily. The results brought a revived energy to the Rabobank team, and they’re working on utilizing Mendix in a wide variety of ways.

3. Automate Processes for Customer Services

Using low-code, financial institutions can automate different processes that were once manual, saving time for both employees and customers. One such example is Business Development Bank of Canada (BDC). It processes 30,000 loan applications and over $4 billion per year. However, supporting modern businesses meant that BDC had to modernize its core legacy systems and rethink how it served its customers.

BDC built and deployed a new Core Lending System in just eight months using low-code. This project was considered mission-critical with over 100 integration points, and would have taken nearly three years to build with traditional development. Now, BDC has reduced their loan processing time by 80%.

Turn Vision into Reality

When you’re in the cycle of doing what’s needed, it takes a conscious effort to get your roadmap into the places you want to be. Similarly, low-code can feel like a change to how your institution develops. But change is a constant part of the financial services industry, and you have the power to make that change work to your advantage.

Embrace that change and look at your development schedule and roadmap. Is there something that you wish you could do but haven’t been able to? That may well be a spot where Mendix can help you to innovate. Explore the possibilities and take back control of your future.

If you’re interested in more information, do read How to Accelerate Digital Innovation in Financial Services with Low-Code blog from Mendix.

Posts by: Richard Eastley