How Low-Code Automation Is Transforming the Banking Industry

By Guy Mettrick, Global Industry Lead – Financial Services, Appian

Guy Mettrick, Appian

Operating with more intelligence and automation will be the key to securing the future of the financial services sector. There’s much optimism around how automation will change the industry and how modern consumers do banking. Not only will we be able to do existing tasks more efficiently, but the most exciting element will be the way automation will completely change services.

With little to differentiate banks when it comes to basic current account functions, companies need to offer more to their customers. This is especially important with the threat to traditional high street banks from the newer, more agile app-based challenger banks and other fintech competitors. Incumbents may be laboured with legacy systems, but they do have the experience and data about their customers’ preferences that they can use to their advantage. Companies need new products, new approaches and new ideas to attract and retain customers. They also need to deliver them quickly and be able to change them to meet changing business and regulatory needs, if they are to remain competitive. This leads to automation – it is viewed as one of the most important technologies during the next 12 months by 31% of financial services executives.

However, innovation cannot come at the expense of security. A report by the Economist Intelligence Unit with Appian found that cybersecurity will be a top focus for automation. Four in 10 (43%) named it as a top-three area of significance. This was followed by innovation and R&D (35%), and customer-facing processes (34%).

Cybersecurity remains a top concern in the UK because criminals stole a total of £753.9 million through fraud in the first half of 2021 alone. That’s an increase of 30% compared with the same period in the year before. It’s a major problem that is growing in severity. Security systems need to become smarter by using AI and automation to spot and flag nuances in patterns of behaviour. 

Looking at the other top focus areas for automation – innovation and customer-facing processes – we’re only just scratching the surface of what’s possible, but there are issues to address. Although a third of execs see the importance of automation, there’s a disparity between IT decision-makers and business leaders with regards to how much improvement is needed. IT leaders are more likely to call for a faster improvement to technology systems and processes than business directors. In addition, FS leaders face other considerations when looking at improving their services, from the budget, resources, skills shortages, and regulatory pressures, to delivering business results.

Innovating with speed

Low-code is emerging as a way to help firms innovate with pace without the heavy lift and lengthy timescales associated with traditional software development. With low-code, visual design tools are used to specify aspects of software behaviour without resorting to coding. The technology then generates executable code from these visual designs. Unsurprisingly, low-code was a shining light in the pandemic when firms had to roll out new applications quickly to help workers and customers adapt while working and living in lockdown. Looking ahead, it now has a purpose in enabling FS firms to accelerate their delivery of emerging technologies. The less time spent on the technical side of developing the code, the more time spent using, creating and improving the solution.

Low-code improves collaboration across departments because business decision-makers can see and contribute to the software being developed in real-time. This makes projects something they can be fully invested in and help shape from the outset, rather than handing everything over to IT teams and not seeing the output until it’s already completed. There’s a faster time to value and a reduced reliance on specialist coding skills. Low-code and automation free up the software development team from mundane, time-consuming tasks, leaving them able to deliver mission-critical programmes and modernise technology infrastructure.

Creating real differentiators

With low-code making software development easy and accessible, we’re able to think ambitiously about the future of the financial services sector. With financial services being such a data-intensive industry, there’s a huge amount of information to process, understand and act upon. The industry would benefit from increasing its use of Intelligent Document Processing with more reliance on AI for handling complex customer documents, transactions and interactions. That includes conducting due diligence when onboarding new customers, running credit analysis reports, processing lending applications, and deciphering tax forms.

In commercial banking, we are seeing a shift in how content recognition can accelerate processing times for onboarding, KYC, credit decisioning, invoicing and more. We will also see the use of low-code software to speed up their delivery of Robotic Process Automation (RPA) for fast, error-free data updates to external legacy systems.

This is an exciting time for the FS industry where it can finally begin to shake off its reputation as being slow to adapt to new technologies. Yes, customers are more expectant than ever in terms of ease of access via mobile banking apps and security, as they expect banks to proactively detect and prevent fraud, reducing their risk exposure. But banks can use low-code to not only become a more secure organisation, but also a more innovative one. They will be able to move faster and stay ahead of the competition by creating genuinely unique solutions that will increase loyalty and ultimately the bottom line.