The pandemic-triggered urgency for modernising legacy bank IT infrastructure has accelerated existing cloud adoption strategies, made way for a more considerate approach to customer service, and necessitated tailored, omnichannel banking, products, and services. 

However, there’s still a gap between what banks are offering and what customers want. This report by Capgemini and Efma perfectly articulates this gap - 

• 76% of customers expect an omnichannel experience – but only 58% of banks prioritise it

• 31% of customers would like improved customer support services – but only 12% of banks prioritise it

• 65% of customers expect a focus on transparency, ethics, and social responsibility – but it is only a focus for 25% of banks

• 44% of customers face medium to high friction in banking transactions.

This goes to show that customers are still hungry for seamless, hyper-personalised journeys. 

The industry is hampered by a lack of resources and outdated and inflexible core systems. Having an IT modernisation roadmap then is a must-have, not a nice-to-have. Digital transformation may seem overwhelming, especially when faced with a litany of compliance and maintenance-related mandates. 

More often than not, for the bank IT modernisation agenda to get moving, a lack of expertise, resources, and time means that banks are faced with Sophie's choice -  get immediate (often incomplete) results, or commit to spending months or even years (and untold amounts of money) to get to the finish line. 

While it may be tempting to throw your hands up in frustration - there’s a straightforward approach that will not just make digital transformation easier and faster, but also cheaper and will create business value and customer satisfaction. 

To put it colloquially, low-code/no-code (LCNC) are two alternatives to programming from scratch. Think of low-code programming as building blocks that accomplish a common task - it uses these building blocks from one vendor or another to accomplish a common goal. Like pieces of lego, for instance, where the ultimate shape can be manipulated by moving them around as we please. Low-code programmes are manipulated using graphical user interfaces, they are moved around using drag-and-drop. To reach the ultimate goal, the consumer-facing business must put these blocks together manually. 

Typically, low-code programming is still done by professional coders and is seen as a time and labour-saving tool. 

No-code programming is for the true non-coder; typically a user who knows what they want but doesn't know the first thing about coding. Think of this as assembling building blocks without knowing how to connect them. No-code also uses graphical interfaces and is often presented in the form of templates that help the user produce the process they want. No-code programmes require less than 5% of the coding to be done manually and are suited for business professionals. Usually, they’re cloud and subscription-based. Low-code platforms are a bit more complex, they’re designed for enterprise users. They’re customisable, typically requiring up to 20% manual coding. 

Both low-code and no-code platforms are visual, with drag-and-drop features. In low-code platforms, developers use speedy development without having to replicate the code repeatedly. Developers also have the liberty to extend the platform with their own code, enabling them to improvise or even create complex applications that would otherwise require experts. 

Low-code platforms have pre-built user interfaces; in financial services, for example, users can apply low-code programmes to mobile customer services-related issues to productivity enhancements to modernise legacy systems. 

One of the discrepancies within banks is the mismatch, in both supply and demand, between what IT teams can do versus what business units need. With a growing demand for drastic digitisation, IT has a finite capacity and growing to-do list. This has driven the adoption of LCNC in banking - with the core benefits being saving on time and labour involved. 

The switch from traditional coding to adoption on LCNC has changed IT from core development to a more managerial and strategic overall role - specialised coding when needed to ensure it works right at the end of the day.

To lay a strong foundation for the pillars of technological transformation, turning to LCNC is a significant intervention. To put it simply, here are five value drivers of LCNC adoption for banks - 

No-code platforms offer the ability to turn analogue spreadsheets into full responsive dataflows.  On a bigger level, they allow for the optimisation of documentation and quality assurance processes.  Real-time visibility into data, reporting and analytics allows banks to filter and sort data more effectively 

For banking using no-code platforms and subsequently updating their static databases to one with a real-time view into dataflows means a significant reduction in loan processing time. What used to take 30 hours of manual work crunching numbers and skimming through over 15 documents can be brought down to 30 minutes with LCNC platforms. 

Technology transformation involves hiring the right talent that understands business trajectories and the IT backbone required for that. More often than not, it becomes expensive to train and keep such high-value skills inside the organisation. A study found that 70% of IT leaders found low-code platforms to be more affordable compared to traditional development platforms;  80% cited the ability to meet requirements within a budget. 

A Gartner survey revealed brands risk losing 38% of customers to poor personalisation efforts. And banking has historically been a tedious activity. Banks that offer smooth journeys stand to win customer loyalty. Leveraging an available API backplane and a low-code studio can generate consumer-grade, responsive front-ends (UI/UX).  Low-code platforms offer personalisation based on customer preferences and company interests. 

A low-code-enabled banking system allows banks to configure, extend, customise or compose certain parts of their core application portfolio - reducing/optimising time needed to go back and forth with the provider and enabling for a more evolved provider-client engagement. 

Basically, LCNC + banking software = Tech transformation 

Applications of Low code in Banking

1. Digital Transformation

Low code in banking can be used to accelerate digital transformation initiatives by enabling faster development and deployment of applications. With low code platforms, banks can build applications that enable self-service banking, automate back-office processes, and streamline customer service. This helps banks to improve operational efficiency, reduce costs, and enhance customer experiences.

2. Risk Management

Risk management involves identifying, assessing, and prioritising risks that could affect the bank's operations, assets, or reputation. Low code platforms enable banks to quickly develop and deploy risk management applications that can help to identify and mitigate potential risks in a timely manner. Banks can create solutions for fraud detection, compliance monitoring, and risk assessment, which improve risk management and ensure compliance with regulations.

3. Customer Relationship Management

Customer relationship management (CRM) includes managing interactions with customers to improve customer satisfaction and loyalty. With low code, it’s easier and faster to create applications that collect, analyse, and use customer data to personalise marketing campaigns, offer targeted products and services, and provide proactive customer service. This helps banks to improve customer engagement, increase revenue, and reduce customer churn.

4. Loan Origination

With low code platforms, banks can quickly develop and deploy loan origination applications that streamline the process, from customer data collection to credit scoring, loan approval, and disbursement. This is crucial in the highly competitive lending market, where speed and efficiency are key to success. Low code enables banks to improve the loan origination process, reduce costs, and increase revenue.

McKinsey’s Global Banking Annual Review (2021) posited that COVID-19 pandemic will cause $3.7 trillion of revenues to be foregone and never be seen again. It’s not all gloom and doom though, the same report also mentions that if banks do the hard work on productivity and capital management, there is hope to recover lost revenues and return on equity. 

Where does LCNC fit into all this? 

Low-code/no-code => higher productivity. 

And FinBox can help you get there - We bring together the entire stack from credit risk assessment to disbursement to compliance and portfolio tracking in one low code platform. While you focus on your business, we focus on growing it with contextual, embedded financial services. Think of us as an almost invisible layer between a business and a financial service provider - the one with the underlying infrastructure railroads that transform a business into a digital credit enabler.