The financial services industry is said to be among the first to face Technological Disruptions in the next five years
According to a PwC survey, 80% of the respondents, when choosing a financial institution, would take into consideration if it offers digital financial services without requiring clients to show up at the bank counter in person. Particularly since 2020 when the Covid-19 pandemic broke out worldwide, remote lifestyles have taken hold and directly challenged the conventional commercial model of brick-and-mortar businesses. In addition to branches and ATMs, traditional financial institutions are being forced to compete with their rivals in areas of smartphones, Internet, data, interactive human-machine interfaces, and AI smart services.
Challenges of digital transformation in the financial services industry: Strict regulations and internal innovation stagnation
According to a PwC report, “Productivity 2021 and Beyond”, 72% of the financial service providers, as a response to the changes brought on by the pandemic, have started rethinking change functions, embracing the platform economy, bringing an agile mindset to the mainstream and mastering the digital labor, based on a productivity strategy that takes into account sustainable business growth. However, despite having invested up to 30% of their annual budgets in reform initiatives, most financial institutions have yet to receive returns of the same value.
The primary factor behind such mounting challenges in digital financial transformation is that the traditional financial industry is supervised by stringent regulations, which greatly impacts the financial institutions’ freedom and possibility in their attempts at innovation. Meanwhile, many financial institutions hope to build on top of existing software structures digital services offering comprehensive user experience. However, their existing systems are often too bulky and dated to be easily shifted, and most of them require redevelopment. Within the banks, the shortage of talents skilled in data, design and technology could translate to extensive hours and laborious efforts for cross-departmental, cross-level communication during the product development stage. As a result, implementation of internal innovation becomes a huge challenge.
Given existing resources, to find a highly agile development model that meets market demands, many financial service providers outside Taiwan would opt for low-code development tools for their digital transformation. Such tools allow development and sales personnel to build an App via an intuitive “visual interface” and accelerate the development of product prototypes, as well as improving the coordination between sales, operation, and engineering departments. The former will enhance development efficiency, while the latter will most likely reduce communication barriers.
Outsystems powers financial innovation with a low-code development tool helping clients launch new features in 7 days
Take the UK-based fintech firm, thinkmoney, for instance. thinkmoney aims to help users better manage their finances, users that have no bank accounts and not enough time, either, to open one at the counter. As a long-standing practice in the past, users intending to open an account with thinkmoney had to contact the customer service to obtain their personal account number. It took up to five days to “obtain account/password” and “verify ID” as part of the account opening process, which directly resulted in a 30% loss of potential customers.
thinkmoney works with Outsystems, a low-code, visual-based, IDE platform provider to enable customers to complete the entire account opening process online. In only 7 weeks, thinkmoney had launched its first edition of the digital on-boarding feature which customers could access seamlessly across desktops and mobile devices. Within four weeks of going online, the aforementioned feature had increased user conversion by 30% and reduced the marketing cost of customer acquisition by 20%.
thinkmoney opted for a low-code development platform to undergo customer-oriented digital transformation and to solve the many problems arising from traditional development processes. For instance, in their previous software development processes, users often had to provide lots of complicated information, e.g., business procedures, user data, and interface design, in order for the programming team to target user needs and produce a logical and fitting development result. Further, communication didn’t always go as planned. When both parties were insufficiently informed about each other’s needs, there would be misperception and miscommunication. That is also one of the factors causing the extensive development periods that somehow produced unsatisfying results.
Thanks to its visual-based, easy-to-grasp configuration, the low-code development platform enables sales and operation personnel to effortlessly develop applications through its added features. Developers can also make the program logic easily comprehensible to sales personnel via the platform interface and user guidelines. For follow-up product evolution, the platform offers great flexibility and supports updates and edition testing in short periods of time. It continues to renew program application performance based on user feedbacks to better meet user needs.
Master Concept helps businesses incorporate low-code development platforms to provide employees with digital education resources
Besides incorporating products to resolve existing development issues as part of a company’s digital transformation efforts, helping employees develop a digital mindset is also important. When previous solutions are no longer applicable, relying on the injection of new technologies is inevitable for the execution of all tasks and product development. As Microsoft founder Bill Gates said in an interview in January 2020, “It’s not necessarily that you’ll be writing code, but you need to understand what engineers can do and what they cannot do.” Likewise, you don’t have to be an expert in coding or the periodic table, but having the ability to think the way these experts do will help you tremendously.”
A renowned life insurance company in Taiwan has teamed up with Master Concept, OutSystems’ partner in the APAC region, to set up “Easy Steps to App Creation” workshop for employees without a technical background. The aim is to instill employees entry-level programming concept and to shape a digital corporate culture.
During this two-month training, Master Concept and the client’s HR team went on extensive discussion on the workshop theme and depth to build a hands-on App development course based on OutSystems’ low-code development system. The course consists of three main subjects: Address Book App, Instagram App, and Events Platform App. Notably the Events Platform App is OutSystems’ native application with the most web pages, server logic and more in-depth hands-on practice like data comparing/contrasting. Participants are encouraged to initiate a social event through the App they have built, e.g., a game of basketball or badminton, for a bit of team building or social bonding within the company.
Through this training, employees with no engineering background would learn to develop applications based on product requirements by way of “drag-and-drop interfaces” and “logical design processes”. Besides the training course, the client also held programming competitions where system users proposed certain “Web/Apps” that could be developed within the company, and the course participants would then develop the products accordingly. In addition to expanding non-technical staff’s potential for program development, IT-trained employees were invited to the final competition for the product prototype collaboration.
The entire collaborative process can promote better collaboration between the “non-technical staff” and “technical staff”, as well as helping both parties reach a basic consensus on App development. The goal is to truly implement the concept of digital transformation and low-code development in the company workflow.
Without a knowledge gap, development efficiency will increase more than 4 times
The colossal obstacles faced by companies undergoing digital transformation today are growing backlog of tasks; insufficient time for innovation; scarce and expensive tech talents. If not tackled, such problems will only worsen. To avoid falling behind competitors and prevent resulting economic losses, digital transformation must be done promptly.
The highly competitive financial services industry that requires speedy response to market demands is right at the forefront of facing such obstacles. Using a low-code platform will accelerate the development process 3 to 4 times faster than traditional development methods; its benefits include reduced development labor costs and continuous updates/expansion of application performance according to user feedbacks. When users are willing to stay on the App for its services, the company can also generate more value for the services.
When there is no longer a knowledge gap in the programming development, it will gradually close the communication gap between technical and non-technical personnel. This is also part of the democratization process for professional know-how and technology. As an OutSystems partner in the APAC region, Media Concept, in the past five years has worked with clients across various industries, e.g., financial services, life insurance, transportation, media, and manufacturing. For the past two years, OutSystems has begun partnerships with government agencies to provide services such as project planning, application development, technology integration, and after-sales support. We also offer customized on-boarding services and training, designed to meet client needs and accelerate companies’ digital transformation.
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