The digital revolution of financial services is here, and the question isn’t whether your organization should adopt a digital-first approach, but how quickly can you catch up with the digital leaders in your industry. Customers expect smart products; whether it’s payments, bank accounts, or finance options, if it’s not digital, instant, and available when your customer needs it, you’re already lagging behind industry leaders and losing clients to competitors.
Digitization is more than technology
When it comes to adopting digitization within an organization, it can be easy to get too focused on the technology needed to create digital products and services. Having the right technology is necessary but having the team who know how to use that technology is an integral part of creating digital success. In a recent survey, 49% of financial industry leaders listed sourcing talent to fill tech positions as one of their main concerns, this data builds on late 2017 industry stats that found an incredible 72% of financial services leaders see a shortage of tech trained workers as a threat to business growth. Think about challenger banks such as Monzo, Revolut, and N26, while technology powers their incredible digital offerings, the ability to create, optimize, and update these disruptive solutions comes from their creative, forward-thinking teams.
So, what does this mean for organizations in the financial services industry? If you want to compete, you need tech-savvy talent.
Knowing the talent, you need is easy, finding it isn’t
As forward-thinking industry leaders already know, the right talent should be the foundation for any digitization strategy. With a huge amount of financial services now automated and available online, there is a growing need for talent who can manage all aspects of the technology needed to process these services, such as data scientists, developers, analysts, cloud specialists, and many other tech skills that are critical to creating digital services that are scalable, adaptable, and can quickly respond to market changes.
For many financial services organizations finding the right tech talent is proving a challenge that continues to get worse as demand for tech-savvy employees grows. If you find yourself in this position, the digital revolution in banking probably feels as much like a curse as it does an opportunity. Unfortunately, this skill shortage is unlikely to improve anytime soon, so if you need to compete in a digital-forward industry, but have limited tech resources what are your options?
Using technology to reduce the effect of skills shortages
Businesses who are struggling to fill technology roles often have to rely heavily on existing tech-focused employees, which means that all tech projects get put into the same to-do list, whether they require heavy development skills or just basic tech knowledge. This almost always results in a tech backlog where projects take forever, and ineffective use of limited resources causes a reduction in business agility and slow reaction to market changes.
One solution to the tech skill shortage problem is to actually use technology to reduce the skill debt strain on your organization, an approach advocated by Bigbank CTO, Agur Jõgi, whose team have adopted a low-code solution for credit risk decisioning and analytics:
“In Estonia, developers are at a premium. Estonia has wholeheartedly embraced the digital revolution,” he said. “And 98 percent of banking transactions are now conducted through the internet.IT is the fastest growing sector in the country, generating up to 15 percent GDP and while Estonia is proud of its progression, for businesses, it means that developers are in high demand. A digital credit risk management solution that doesn’t require IT, experts, every time an update is needed is ideal in Estonia and everywhere else for that matter, for the time and cost savings it provides.”
The low-code approach
Low-code development platforms are designed to reduce the amount of manual coding needed to create business processes or applications. Users can create, update, and optimize business processes, using graphical interfaces and configuration systems without having to complete any kind of coding. This system allows non-developers to make quick and easy updates to business systems without relying on the tech team to deploy the required changes. This system puts the power of the process in the hands of the individuals who actually design and develop the process, which enables the business to become more agile and better equipped to adapt to market changes. Low-code solutions also reduce the time it takes to develop new processes and make changes to existing processes.
Let’s use lending as an example: your business uses software to fully automate the loan application process, and in non-low-code environments, each change must be manually coded into the system. When the risk team creates a new risk model for loan applications, they pass the model over to development team who then go through the process of deploying the model. This may involve rewriting the model in a different language, creating integrations with new data sources, manually testing the model and processes, then finally deploying the risk model into the live environment. This process can take from weeks to months and places a heavy burden on the development team who could be working on other important projects. Then, a few weeks later the risk team wants to make a change to the model, and the whole process starts again.
Alternatively, when using a low-code software platform, the process would look more like this: the risk team creates a new risk model. The risk team then deploys the new model using a drag and drop interface to create the process and manage the integrations. The risk team is in complete control of the process and can make updates quickly and easily without using development resources.
Bigbank’s Agur Jõgi told us more about the low-code approach, “Risk managers taking care of the models themselves can implement rule changes quickly. This isn’t only efficient; it also means the underwriters—the people with the insight, knowledge, and expertise—are in control. If a fix is needed, with a visual solution, they can see where the model needs attention and react immediately. No lengthy analysis and referral to a committee for resource approval to make updates. They simply develop, test, implement and launch amendments themselves, then monitor and adjust as necessary. It’s a whole lot more agile.”
Low-code technology as a skills shortage cure and business boost
When the difficulty of finding skilled workers to meet technology growth needs is increasing each year, it’s essential for any business that wants to stay competitive to find a solution to the skills shortage. The skilled tech talent burden of low-code solutions is much smaller than hard-coded options making low-code options a viable and smart solution for many organizations struggling to recruit tech employees, and even those wanting to prioritize their tech team’s time into other areas of the business. By choosing to use low-code in specific areas of a business, such as a process automation, risk decisioning, and data management, a business relieves pressure on their tech team and empowers other team members to take control of the processes they designed. Low-code, used in the right way, can create stronger, smarter, and more agile businesses that are ready to make changes, quickly.
To see a low-code platform in action, including the simple drag and drop interfaces that reduce the need for coding skills, watch the Driving Innovation with a Low-Code Platform video here.