Why Low-Code No-Code Is Becoming the Secret Weapon for Banks

In recent years, banks worldwide have finally begun to warm to the idea of digital transformation. A study predicted the digital banking market to grow by $53.5 billion by 2030. However, the adoption has been slow due to issues with existing legacy systems. These include:

• Lack of integration: Most banks have topped their existing systems with newer ones purchased from multiple vendors and teams. They never had a cohesive integration strategy and were left with systems that were not designed to work together. Each of them had its own APIs, data formats, and integration requirements. That’s why creating custom integration was not only time-consuming but also expensive.
• Data silos: Existing and new systems rarely communicate with each other due to poor integration. This prevents decision-makers from accessing a single source of truth. Everybody has their own data versions and makes decisions based on fragmented data. It slows down the decision-making and transformation process.
• Slow operations: Because banks still use outdated development and banking processes, the transformation takes several years.
• High operational costs: Besides the labor and other overhead expenses, the cost of developing or integrating systems is high.
• Error-prone processes: Banks are expected to adhere to stringent compliance and complex processes. These processes are manual and thus prone to errors.

Clearly, digital transformation is the answer to all these bottlenecks.

However, according to KPMG’s report, only 18% of banks have successfully achieved their transformation goals.

There could be many reasons for the failed attempts. But one of the leading reasons is the shortage of talented resources. Banks need resources with knowledge and experience in the banking industry to transform their businesses. However, the shortage of such talent has slowed down the digital transformation process.

The simplest and efficient way to overcome this roadblock is through low-code platforms.

Benefits of a Low-Code Platform In the Banking Industry

Legacy banks are facing stiff competition from neobanks and fintech players. There is mounting pressure on them to serve customers faster and personalize their experience. Given the shortage of resources to make banks digital-first, low-code solutions are the best option to bridge the gap. Low-code solutions don’t need extensive development knowledge or experience. Developers and business users can use pre-built components and a visual interface to build a digital solution. They don’t have to rely on IT teams to build a solution.

With low-code solutions, banks can:

• Modernize banking infrastructure: Low-code platforms don’t necessitate an overhaul of the existing infrastructure. It provides pre-built connectors, APIs, microservices, and several integration tools that help banks connect their legacy systems with digital applications. This enables both the IT and business users to modernize their infrastructure without disrupting the existing operations or writing extensive code.
• Unify customer data: Typically, banks use core banking systems and other disparate systems, such as CRMs and third-party services. This leads to data silos and prevents the staff from accessing a single source of truth. Low-code platforms save time by reducing the need to switch between systems. Low-code platforms enable banks to build custom integrations that extract data from various sources and consolidate it into a single interface. It eliminates data silos and empowers banks to deliver personalized experiences, streamline operations, and make faster decisions.
• Improve security: Security is a high priority for banks. However, it need not be complex. Low-code platforms provide built-in features, such as data encryption, secure authentication, automated audit trails, and role-based access controls to help banks meet regulatory requirements. It centralizes security management and provides pre-built security code that enables banks to identify and avoid threats during modernization or coding. Additionally, it allows banks to update security protocols whenever there is a regulatory change or a new threat, and safeguard their banking applications from vulnerabilities. It is easy to implement, configure, and maintain.
• Save costs: Banks no longer need to spend significant sums on hiring specialized resources to build applications. Low-code platforms’ pre-built integrations, reusable components, and visual workflows reduce the dependency on the IT teams. In fact, it encourages business users to contribute to the development process. This helps banks save costs and free up the specialized resources to focus on solving complex problems. Low-code platforms also address the issue of high maintenance costs, enabling banks to make quick updates to the application without relying on IT teams or vendors.
• Enhance customer experience: Today’s customers are digital-first. They expect personalized, digital experiences from banks. Low-code platforms enable banks to quickly roll out digital and mobile-first services and products without extensive coding. From personalizing interactions to automating workflows and fulfilling customer service requests rapidly, low-code platforms make daily operations seamless and efficient. Banks can also quickly develop and deliver new features based on user feedback without going through the complex software development process. This makes customers feel valued and improves their experience.

Use Cases Of Low-Code Platform

Most banks use low-code platforms for:

• Onboarding new customers: Most customers churn if the onboarding process is time-consuming. Low-code platforms help simplify and streamline it. Banks can automate onboarding processes by verifying customer identities in real time, collecting and validating documents from banks and other financial institutions, and approving applications. Everything is done in compliance with the rules and without extensive backend development. Low-code platforms reduce the time taken to onboard new customers from months to weeks or days to minutes, and allow customers to engage with the app almost immediately.
• Checking compliance: Banks operate in a highly regulated environment and are thus expected to comply with multiple regulations. To ensure no compliance checks are overlooked, banks can automate regulatory workflows. With low-coding platforms, banks can automate compliance workflows, such as KYC, AML, and risk scoring. The processes and workflows can be embedded into the low-code platform to ensure compliance by design. In other words, banks can meet the compliance requirements throughout the customer journey without any complex processes. They can also stay up to date, as low-code platforms enable banks to update their applications in response to regulatory changes without significant changes. More importantly, low-code platforms help banks maintain audit trails of all the users who logged in to the application and accessed data. This provides banks with better visibility on data access and security.
• Detecting fraud: Banks usually take a reactive approach. Low-code platforms make it more proactive. Banks can use it to build real-time monitoring dashboards that gather data from multiple sources, consolidate and correlate it for greater context, identify anomalies, and respond quickly before an event occurs. Additionally, banks can promptly update fraud detection criteria in response to emerging threats without lengthy IT cycles.

Conclusion

From opening an account to availing a loan, customers want the convenience of banking through mobile apps, social media, and other digital channels. The days of visiting a branch for a simple banking task are over. As customer needs shift, banks need to be more proactive in undergoing digital transformation. After being digital laggards, banks are finally embracing technology to serve customers better. However, building new applications or overhauling existing banking processes and workflows can be complex, time-consuming, and resource-intensive.

That’s where low-code becomes the secret weapon for banks. It eliminates the need for specialized resources and empowers citizen developers to undergo digital transformation.

At Implemify, we help banks implement low-code solutions using the Creatio platform. From building custom workflows for account creation, onboarding, and underwriting to automating regulatory processes, Implemify helps banks scale their operations and meet customer expectations.

For more information about Implemify and how it can transform banking operations, contact us.