How low code can help financial institutions deliver modern digital services
Established financial institutions face rising competition from digital-only alternatives, making clear the case for using low code to enable rapid innovation.
The steps involved in almost any type of financial transaction are largely the same across the board. This makes the routine ways we interact with financial institutions prime candidates for app-based account management and automated workflows. It’s also why neobanks and other digital-only financial services have become enormously popular in recent years.
Despite this, the actual user experience that clients have when working with financial services varies dramatically. Sometimes, these experiences are unnecessarily lengthy or complicated, particularly when it comes to the application and enforcement of security controls. More often than not, this is down to the fact that established financial institutions often heavily reliant on legacy architecture, which is harder to integrate with today’s software solutions. Financial startups, on the other hand, face different challenges, such as limited resources for developing modern app-based services.
Developing a bespoke financial services application from scratch using the traditional method is time-consuming, expensive, and subject to numerous testing and refinement cycles. Low-code solutions can help reduce that technical debt by facilitating fast and agile development, applying visualized and fully automated workflows, and continuous testing and feedback.
Given that financial workflows, such as transferring funds and opening accounts, are so similar within their respective domains, low code is particularly suitable for driving innovation in the sector. By providing the underlying framework, including business logic represented as drag-and-drop visual components, low code makes it easy to develop branded financial services applications in minimal time.
This is also why the banking, financial services, and insurance (BFSI) sector now accounts for almost a third of the entire low-code market. However, given the highly regulated nature of the sector, and the fact that regulatory regimes vary significantly between jurisdictions, there are still significant barriers to its adoption.
Digital sovereignty, which is especially important in the financial services space is, after all, far harder to achieve when relying entirely on closed-source ecosystems – which most low-code platforms are. However, there are exceptions, like Corteza, which gives businesses complete freedom over how and where they host and manage their data. This makes the combination of open source licensing and low-code development a natural fit for driving innovation in the finance sector.