McKinsey’s latest banking review highlighted that more than half of the world’s banks do not make enough money to cover their cost of equity. With an increasingly challenging macroeconomic environment, it is important for them to improve productivity. Many banks are turning to no-code solutions to address some of their most pressing concerns related to RoE. We discuss how no code is helping below.
Challenges Facing The Banking Industry
From new-age banks snapping at their heels to security risks and compliance requirements, many challenges currently keep bankers awake at night. Let’s take a look
Digital age consumers expecting digital-first solutions
Consumers today expect all solutions at their fingertips. But it is no secret that the banking industry has been fairly slow to move toward the phone. While most banks now have apps and services available, it is still a catch-up race. There are newer horizons such as wearables, AR, and more coming up.
Moreover, many customer-specific financial solutions still need face-to-face solutions. While Covid 19 saw the entire world move towards video calling, banking is still far behind in this space.
The rise in digital-first challenger banks & new age fintech companies
Challenger banks have been filling up the gap between customers and traditional banking by using technology. They have been able to jump onto the digital-first bandwagon and appeal to newer customers more effectively than traditional banks.
Moreover, they are also getting into wealth, insurance, and other sectors using a strong technology platform.
Increasing compliance and security risks
With the rise of the digital age, security has become the biggest concern for most banks today. Regulators are stepping in with compliance requirements. Banks stuck with legacy infrastructure are finding it harder to meet these needs.
How No-Code Can Help Banks
No code is certainly not a panacea, but it can help banks transform quickly, improve time to market, reduce compliance risk and enhance customer engagement. Here’s how.
Customer Engagement
No code platforms enable banks to play the catch-up game very effectively. All it takes is to build a single application design on no code. You can deploy your new customer interface in various mediums across the web, mobile or more. The consumer gets exactly the same journey in any format, making it very simple to use.
Moreover, no-code apps allow easier visioning of solutions. They have a drag-and-drop interface that allows actual bank users to create the basic framework. This makes the solution a lot more effective and customer friendly.
Lower Risk
Financial fraud is a huge and growing problem in banking. Customers are getting duped of billions of dollars every year due to data theft, identity theft, and phishing attacks.
No code app development has built-in features to help plug these gaps quickly and effectively. Since the platform on which the application is built gets updated with the latest security updates regularly, there is a lower likelihood of problems.
Moreover, no code has extensive tracking capabilities that allow users to monitor usage more minutely. Banks can pinpoint sources of fraud much earlier with no code than with traditional application development.
Improved Regulatory Compliance
All applications developed by banks must comply with strict regulations prescribed by banking authorities in the country. These regulations can be complied with easily using no-code development.
For example, no code platforms have a lot of built-in reporting and auditing facilities to monitor regulatory requirements. Moreover, they offer services that help comply with regulations such as GDPR and other international standards.
Enhanced Innovation and Agility
No-code platforms often include workflow tools and collaborative features that help in making banking processes easier to map and deploy. Moreover, since they require minimal coding and have a simple development process, it is easier to create new applications with no code. The time to market is shortened, making banks more competitive.
No code platforms use composable architecture, which makes it easy to reuse an application built for one function for other purposes. Only minimal changes are required to customize an existing application workflow for another application.
No code uses a lot of prebuilt modules that have already been tested extensively and deployed in various places. This means that the likelihood of bugs after deployment is lower, and if any issues crop up, they are also easier to fix.
Legacy Modernization
Perhaps the most important benefit of no code is in IT transformation at banks. As we mentioned earlier, banks are often saddled with a lot of legacy IT infrastructure that works well but is not easily moldable to meet new-age needs.
The most important question for any banking digital transformation strategy is whether they should buy new software or redesign the legacy code.
No code helps sidestep this debate entirely. With their well-equipped libraries of APIs, no code platforms can easily interface with legacy applications. They can bring their data and capability to a common platform and create a link between a new UX/UI interface.
This way, the legacy code gets reused, but the front end gets sleeker and up-to-date, helping banks transform quickly.
Wrap Up
No code is helping traditional banks struggling with their return on equity by giving them the tools to transform their technology. With so many challenges facing banking currently, no code is an absolute must for them.