Experts in banking IT analyze the surge of low-code technology - evolving from a niche to essential application development
Low-Code platforms are revolutionizing the banking and financial services industry, enabling comprehensive digitalization and transformation. These platforms offer a full Low-Code solution for interfaces and rule sets, along with case management, workflow management, AI-based decision-making engines, and AI agents.
Boosting Innovation and Resilience
BOAT (Business Orchestration and Automation Technology) platforms are playing a pivotal role in this transformation. They empower banks and insurers to innovate quickly and securely, strengthening their resilience and maintaining their competitive edge.
Bridging the Gap Between Standard and Individual Software
Low-Code doesn't replace existing software solutions but expands the possibilities for both companies and IT service providers. It brings flexibility and independence to companies, allowing departments and developers to create applications tailored to their needs with reduced development effort. The boundary between standard and individual software is shifting in favor of in-house developments.
Streamlining Banking Operations
Low-Code platforms are most suitable for banks and financial institutions primarily in areas such as customer lifecycle management, product fulfillment, operations, risk and compliance management, lending and loan origination, and integration with core banking systems.
Enhancing Banking CRM and Workflow Automation
These platforms facilitate banking CRM and workflow automation, enhancing customer acquisition, personalized interactions, front-office productivity, and operational workflows like onboarding, marketing, sales, service, and contact center operations.
Simplifying Product Fulfillment
Low-Code platforms manage deposit accounts, lending, credit cards, mortgages, wealth management, and insurance with pre-built workflows.
Improving Operations
They streamline account maintenance, payments, commercial sales, and servicing of financial products.
Ensuring Compliance and Risk Management
Low-Code platforms use out-of-the-box workflows to ensure compliance, mitigate risks, and generate reports, particularly crucial given regulatory demands in financial services.
Accelerating Loan Origination Systems
Low Code combined with AI enables near real-time loan application evaluation, underwriting automation, and predictive credit scoring, accelerating the creation, customization, and launch of various credit products.
Responding to Regulatory Changes and Integration
Low-Code platforms enable banks to rapidly respond to changing regulatory requirements and seamlessly connect with core banking, collateral management, credit risk, fraud verification systems, and digital consent mechanisms.
Supporting Open Banking and API Orchestration
These platforms support the bank’s digital transformation by providing low-code orchestration on top of robust APIs that meet PSD2/PSD3 compliance while fostering innovation and integration with fintech ecosystems.
Achieving Speed and Efficiency Gains
Financial services lead enterprise Low-Code adoption due to benefits like 10x faster development cycles compared to traditional platforms, rapid compliance workflow automation, and significant operational improvements.
Leveraging Emerging Technologies
Low-Code platforms facilitate the integration of AI and machine learning, improving decision-making and enabling banks to innovate quickly without heavy coding resources.
In summary, Low-Code platforms are especially impactful in automating workflows, accelerating product launches, managing compliance, enhancing lending processes, and enabling digital transformation via integration and AI in banking and financial institutions. They are particularly suitable in areas where digitalization and transformation play a central role, such as credit granting, the introduction of new products, risk analyses, internal approval processes, or marketing campaigns.
Michael Baldauf emphasizes that the type of Low-Code platform is crucial. Conventional Low-Code platforms are suitable for quick implementation of smaller processes for individual departments, but they create isolated solutions and have to program interfaces to other systems classically. Enterprise-Low-Code platforms can significantly speed up the adaptation process, with changes often taking hours instead of months.
Low-Code platforms can replace entire traditional system landscapes, including adaptable standard applications and in-house developed legacy applications. They are especially suitable for customer service and operational excellence, as they can reduce credit processing times by up to 90% and improve the customer experience through more transparent processes.
BOAT platforms are particularly important for connecting legacy systems and can be seen as a transitional technology. Large Language Models (LLMs) have the potential to be implemented by iPaaS platforms for AI-based use cases for their customers. The boundary between iPaaS and BPA is becoming increasingly blurred, especially for platforms that can also model long-running transactions and asynchronous process logic.
BOAT platforms bring together various automation technologies under a common functional roof, improving system integration and reducing IT complexity. Low Code offers a flexible complement to established standard software, especially in situations where quick adjustments are needed due to changing market conditions or new customer expectations. These platforms are increasingly indispensable for bridging the gap between core systems and specific business requirements, often providing clear competitive advantages for banks.
- The finance business sector can leverage Low-Code platforms to boost innovation and resilience, as BOAT platforms enable banks and insurers to automate workflows, accelerate product launches, manage compliance, and enhance lending processes, ensuring a competitive edge.
- In the technology realm, Low-Code platforms offer flexibility and independence to companies, bridging the gap between standard and individual software, allowing departments and developers to create applications tailored to their needs with reduced development effort, thus shifting the boundary in favor of in-house developments.
