Mendix, a Siemens business and the global leader in enterprise low-code, released a survey showing that, despite being one of the first sectors to embrace digitalisation, the financial services industry is still mired down with complex processes and inadequate tools that are hindering its growth.
This limits the sector’s ability to deliver business-critical services to its ever-growing, tech-savvy customer base, and to provide remote working options to staff at a time when all industries have to digitalise their workplace.
In a new report entitled ‘the Bottom Line: Simplifying Digital Evolution In Financial Services’, Mendix shows that digital transformation is a business imperative for the sector: Nine out of 10 IT leaders in financial services believe their firm will need to invest in digital projects over the next two years, just to survive in a rapidly changing market. For many, this requires juggling between customer-focused initiatives, improving productivity and operational efficiency (76 percent); harnessing data (90 percent); and solving compliance challenges (71 percent). In addition, this balancing act is gathering pace and spreading across the business: Today, IT teams must deliver innovation that’s fast, reliable and secure, and that supports many divisions — all at once.
Despite this clear need for innovation, IT teams often find themselves slowed down by their own tools and processes. IT leaders most frequently say that legacy or antiquated IT systems (35 percent) are the biggest hurdle to change; nearly two-thirds of respondents report challenges in supporting these legacy systems. This reduces IT’s ability to build new applications and create systems fit for the current and future needs of customers and employees.
In the highly regulated financial environment, preventing security challenges and downtime is another pressing concern. Close to 90 percent consider that security is a key consideration when rolling out any new technology, while a quarter admits that the risk of service disruption induced by a project is the greatest hurdle. Yet, two thirds of IT leaders believe the value of digital transformation initiatives outweighs their inherent risk. The pace of innovation is crucial: although IT teams face high demand for their support, most would not prioritise speed over caution, even if they could.
The Path to Innovation
To manage all these priorities, the IT team needs to look beyond its own team to create revenue-generating services. Most IT leaders agree that customer-facing staff understand client needs better than their department (73 percent). Given the right tools, these employees can collaborate with the IT department on digital transformation projects, enabling organisations to design services that suit the needs of their customer base, while reducing the pressure of an already-stretched IT team.
Low-code software development provides a simple solution to address these constraints and challenges: Based on a visual approach for building applications using drag-and-drop components, it enables non-technical staff to participate in creating business applications, even if they have little to no coding experience. Working separately or in close collaboration, professional developers and business-side “citizen developers” can create, iterate, and release applications in a fraction of the time it takes with traditional methods, all under the watchful governance of IT to ensure their applications comply with enterprise standards and architecture.
The Mendix low-code approach allows for flexible, iterative app development for many use cases in the financial services sector, including legacy application upgrades to comply with new regulations, apps supporting smart banking or portfolio management, and mortgage application management.
Nick Ford, chief technology evangelist, Mendix, said: “When it comes to digital transformation projects, the financial services sector is among the most forward-thinking, and it’s clear that the industry is ripe for more innovation. This puts huge pressure on limited IT staff who barely have time to keep the lights on. Luckily, there is a genuine appetite from financial services employees to participate in the creation and development of digital transformation projects. By enabling more collaboration between the IT team and other divisions, financial services companies can tap into the collective knowledge of their whole workforce. This allows these organisations to create the services that customers and staff want, and speed up adoption of high-value digital processes across the whole business to improve productivity and reduce operational costs.”