Published by Jessica Weisman-Pitts
Posted on October 14, 2022
5 min readLast updated: February 3, 2026
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By Paul Higgins, EMEA Banking Lead, Mendix
The financial services industry has traditionally lagged on the digital transformation front, but that is changing. The pandemic, expansion of challenger banks, and changing customer expectations have pushed financial service firms to innovate. But, faced with an accelerating rate of change, financial organisations must carefully assess their digital transformation strategy and optimise their approach to technology.
Digital innovation in financial services is extremely complex. Many financial players are hampered by inflexible legacy core systems, and in such a heavily regulated industry, updating those systems is a painstaking process with high stakes: outages and disruption to services are not tolerated by customers or the regulator.
Moreover, digital innovation at incumbent banks typically requires deep pockets and a significant investment of time; and let’s not forget the mindset and organisational change required to nurture innovation – “fail fast” is not in their DNA. So, what can financial organisations do to improve their ability to compete in an increasingly crowded market? The answer is low-code development – and three examples of how it helps accelerate digital innovation in the finance sector follow.
Another challenge across all sectors, not just financial services, is a widening digital skills gap. As the pressure to deliver digital-only processes continues to build, so does the demand for highly skilled tech workers. Hiring a software engineer is a costly and lengthy process, and financial institutions find themselves competing with Big Tech, start-ups, and others who may be able to offer more attractive locations to work, perks, etc. So, many organisations are looking at alternatives to close the tech skill gap, for example, running programmes to upskill existing staff to take on more technical roles. The downside to such programmes is that it realistically takes years to become a skilled software engineer. Again, low-code offers a viable alternative.
In a fraction of the time it takes to become a “full-code” software engineer, business users are empowered to become citizen developers and build applications. Enterprise Architecture and IT Security will be relieved to know that this is not the wild, organic growth of self-developed applications that banks have experienced in the past, such as applications built in Lotus Notes. The Mendix low-code application development platform (LCDP) provides an IT- and Architecture-approved framework with which applications are built to enterprise standards. The primary benefit of tapping into the resource of citizen developers – besides meeting the demand for skilled tech workers – is that they are experts in their field. Instead of writing pages of requirement documents, it is much more efficient and rewarding for those experts to actively participate in building the solution. Using rapid prototyping a business expert could build and review a business process and user experience before effortlessly passing it over to a professional developer. They could continue development without the waste of converting mock-ups and wireframes, building out the rest of the required functionality. It has been demonstrated time and again that this low-code, collaborative approach enabled by Mendix, accelerates digital innovation and transformation and creates business value far beyond more traditional development methods. To back that statement up, let’s look at a couple of examples.
Creating a consistent omnichannel customer experience
Thanks to COVID-19, even sceptical customers have experienced the convenience of 24/7/365 banking and have come to trust it. LCDPs help financial institutions to meet that demand easier and faster across any channel, including native mobile apps.
Washington Federal Bank, a retail and commercial bank managing around $18 billion of assets, is an example of how quickly low-code can deliver value and significant ROI. The bank’s UX was not meeting their customers’ expectations, competitors were improving, and migration could take up to 3 years. First, they tried customizing an off-the-shelf solution, but it did not meet their requirements and was scrapped after 8 months. They turned to low-code and the Mendix platform, and in just six weeks, they had already exceeded what their previous vendor had done in 8 months. Less than a year later, Washington Federal had an online banking portal built on low-code that integrates seamlessly with their existing APIs and systems.
Another example is Rabobank, whose direct savings bank served more than 500,000 people. Customers were having trouble with the interface, leading them to leave the platform. Any kind of upgrade would be a challenge. The IT landscape was complex, with different systems per country, as well as meeting shifting regulations and compliance requirements. With the help of Mendix, Rabobank reduced their IT costs for the direct bank by 50% while delivering a far superior customer experience. They streamlined their client onboarding process and created both web and native mobile versions of their savings portal leading to fantastic scores in customer satisfaction and increased business.
Automate processes with low-code
Using low-code, financial institutions can automate different processes that were once manual, saving time for both employees and customers. For example, the Business Development Bank of Canada processes 30,000 loan applications and over $4 billion per year. However, supporting modern businesses meant that BDC had also modernise its core legacy systems. Using the Mendix low-code platform, BDC built and deployed a new Core Lending System in just eight months, with only a third of the workforce compared to the originally estimated three years to build it with more traditional development approaches. And by automating its business processes BDC has reduced their loan processing time by 80%.
Given the uncertainty surrounding the global financial climate, it may be tempting to hold back on investments. However, according to Gartner, the total market cap in financial services increased by $1.9 trillion during the pandemic, but only the top 10% were outperformers and saw an increase in market cap, and 3% saw a drop. Efficiency gains through technologies such as low-code were the biggest differentiating factor in this separation in the market – which is set to continue, if not accelerate.
Digital transformation refers to the process of integrating digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers.
Low-code development is a visual approach to software development that allows users to create applications with minimal hand-coding, enabling faster and more efficient development processes.
An omnichannel customer experience provides a seamless and integrated shopping experience across multiple channels, including online, mobile, and in-store, ensuring consistent engagement with customers.
Legacy systems are outdated computing systems or applications that are still in use, often creating challenges for organizations in terms of integration and modernization.
Process automation involves using technology to perform repetitive tasks or processes without human intervention, improving efficiency and reducing errors in business operations.
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