Financial Services Firms Heading for Adoption of Low-Code No-Code Apps

With change on the horizon, let’s take a look at low-code and no-code applications and their adoption in the financial services sector.

The rapidly increasing pace of change and need for code in many industries, including banking, has driven major growth in two alternatives to traditional software development: “low-code” and “no-code,” according to Steve Cocheo, executive editor at The Financial Brand.

Low-code and no-code software provides users with the basic code elements, enabling financial services firms to do much or all customization in-house, so changes can be made more quickly and economically than if a tech vendor was involved in any tweaks.

While information technology still has oversight of the technology, the availability of low-code and no-code frees the technicians for more complex tasks because marketing or other departments can do most or all of the development of an app or program.

 The use of low-code and no-code is still in its early days in financial services. Below are three of the areas where they are commonly used today:

1. Reducing Risk

IT budgets and capacity have not grown at the same rate as the application needs of operations, but low-code platforms provide the ability to address immediate business needs without requiring significant IT support, said Jason Noran, managing principal at Capco

However, most financial services organizations have built end-user computing applications, such as Excel spreadsheets, that enable flexibility for the business, but might lack proper governance, data lineage or security, potentially causing risk for customers, who could be penalized for the errors caused by the applications. 

Building these applications on a centralized, low-code platform reduces those risks in a quick, cost-effective manner, according to Noran. “As with any new technology, however, organizations must be careful not to see low-code platforms as a hammer and every problem as a nail.”

However, requirements driven by regulatory concerns have less variance across organizations, and there is already an abundance of software solutions leveraging machine learning and artificial intelligence that solve these problems effectively, he said.

Low-code and no-code are also helpful in fraud and risk management due to evolving risk patterns, added Samson Aligba, founder and chief solutions architect of Deposits Inc

“With low-code/no-code, anti-fraud policies can be modified quickly with recent learnings and regulatory compliance. A hybrid of rules bases and ML inference engines behind a no-code interface that allows compliance teams to predefine and manually adjudicate risky transactions will significantly increase customer confidence in financial services and improve customer experience,” he added.

Low-code platforms offer a wide field of new opportunities for financial services organizations to unlock innovation and empower non-IT personnel to meet their own IT needs. Still, these tools should be used selectively and within a governance framework that prevents the creation of new shadow IT and unnecessary software spending, Noran advised.

Related Article: How Low-Code/No-Code Are Changing CX Design

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