Low-Code for Banks: Separating Myths from Reality
By Michael Sisk
Low-code continues to push into the mainstream. According to Forrester Research, the low-code development platform market is growing by 50% year-over-year. And there’s a very good reason for that: huge demand on the business side to develop and release applications quickly to keep up with technology, stay ahead of the competition, and meet the evolving needs of customers.
This business demand is putting incredible pressure on IT, which already has an ever-expanding to-do list. According to the research and advisory firm Gartner, the demand for application development will grow five times faster than IT’s ability to deliver through 2021. To solve this dilemma, many banks are embracing low-code, which takes the pressure off IT by letting the business side build and manage their own applications.
So, why is low-code so popular? Low-code solutions enable the development of applications through easy-to-use drag and drop tools instead of traditional computer programming, meaning you don’t need coding skills to use it. The user-friendly nature of low-code could make software development as much as 10 times faster than traditional methods, according to Forrester.
Michael Newborn, market leader for financial services at TrackVia, a low-code application platform, has observed three common themes among financial services companies that have leveraged low-code for full effect.
- They want a digital transformation in the back-office and are putting data at the center of the newly-designed enterprise.
- They have resource-constrained IT departments without the bandwidth to roll out new applications with the speed, agility, and regularity that business units need.
- They are often high-growth companies looking to get to the next level by scaling faster.
Given these challenges, Newborn believes that it’s worth addressing lingering concerns about low-code and separating myths from reality.
Myth #1: It’s Too Complicated.
Even though the bedrock principle of low-code is to make application development easier, a common misperception on the business side is that someone needs a Ph.D. in computer science or a 50-page business requirements document to get started. In reality, business people without coding experience can start building an application using something as simple as an Excel spreadsheet. With a low-code platform, you can leverage drag-and-drop functionality to quickly build an internal application that you need and easily integrate it into your existing systems—all with minimal setup, training, and deployment.
Myth #2: It Means Process and Data Integrity Will Suffer.
For IT departments accustomed to writing and owning all their own code, the idea of low-code for business administrators can be an adjustment. Often IT worries about losing control over the software build and deployment process, as well as the integrity of the data. With a low-code platform, IT is still able to maintain governance and control of the company’s data, but can streamline the way business administrators acquire, analyze, and act on data. Despite the myth, low-code actually improves data quality and accessibility, allowing banks to harness the full potential of customer and transaction data residing in their operational systems. Gaining control of disparate data improves back-office operations by eliminating the inefficiencies that once plagued customer experience.
Myth #3: It’s Not Flexible.
One of the great advantages of low-code is, in fact, its agility and flexibility. Developers of traditional applications often feel intense pressure to make the application perfect before its release, fearing that any future changes will be difficult to implement. This risk aversion results in a slow, and sometimes endless, application build process before rolling out to production. But low-code allows the business administrator to make changes in minutes, even seconds. In other words, it is easy for the app to evolve and expand over time.
Myth #4: It Can Only Create Simple Apps.
One of the major concerns is that low-code is only appropriate for simple apps or for a narrow range of apps. Once companies realize how low-code connects the workflow and the data across the enterprise, they are quick to seize the opportunities. For example, Newborn says one of TrackVia’s mortgage lending customers has used low-code technology to deliver workflow needs across more than 29 different departments in the back office, including compliance, credit administration, post-closing, quality control, and servicing.
Myth #5: It’s Not Extensible.
There’s also the fear that low-code is not extensible or robust enough to truly enable growth. As mentioned above, low-code offers an efficient way to address a variety of workflow and reporting needs across departments through one technology platform. In contrast, a traditional IT engagement means a significant amount of effort spent on back-and-forth communication between IT and business units either developing their own solutions or working with point solutions. Not only is this process inefficient, it further embeds structural inefficiencies in the enterprise. With low-code, you can build as many applications as you need and easily change them as your business evolves.
Low-code offers a promising solution for companies going through a digital transformation, particularly in the back and middle office, that have resource-constrained IT departments and are looking to scale their businesses faster. With the myths debunked, companies now have the opportunity to fully realize the potential that low code development can offer.
