Low-code accelerates bank automation

Process automation is a constant challenge for financial institutions, and low-code platforms seem to be a tool that will help speed up and simplify this task. According to Gartner, financial automation is increasingly using machine learning and artificial intelligence to use them in financial analysis, collection activities, and financial statement preparation.

McKinsey Global Institute analysts believe that available technologies allow for the full automation of 42 percent of financial operations, and for the most part another 19 percent of these operations. Automation provides financial institutions with improved efficiency by reducing errors and increasing the quality and speed of customer service. In some cases, automating activities allows for achieving results that go beyond the capabilities of employees.

Process automation in theory

In theory, everything looks easy, simple and pleasant. However, banks trying to automate processes encounter certain difficulties resulting from the methods of project implementation used so far. A large number of financial institutions prefer the traditional approach to automation and employ teams of programmers to implement projects. The work usually drags on for months, and when it is finally finished, it often turns out that customers have changed their preferences in the meantime or completely new circumstances have arisen in which the use of the application does not make much sense or is even unprofitable.

A good example here is the COVID-19 pandemic. The regulations and conditions that were changing like in a kaleidoscope meant that no one wanted to wait a dozen or so months to develop an application that would facilitate customer service during the lockdown. Highly paid developers pose an additional challenge in implementing IT projects. According to the No Fluff Jobs report, a programmer employed in Poland most often earns between PLN 4,000 and PLN 8,000 net, although of course there are also higher rates - 13% receive over PLN 16,000 net. It is estimated that programmers devote about 75 percent of their work to debugging, finding and correcting numerous errors (about 70 per 1,000 lines of code), which inevitably appear in every larger project. The traditional software development process is slow, expensive and error-prone. 

Fortunately, alternative solutions are appearing on the market to accelerate processes related to the automation of financial institutions. More and more banks and fintechs interested in accelerating process automation are focusing on low-code platforms. According to Forrester analysts, this tool allows you to create applications 10 times faster (with 70 percent less human resources involved) than in the case of coding.

Process automation example

A telling example is the Planet company, which specializes in multi-currency payments, credit card processing, and management of VAT refunds for tourists. One of its largest projects was the implementation of the electronic Tax Free system for the United Arab Emirates. When Planet's managers discovered that there was no ready-made solution, they decided to reach for a low-code platform, and it turned out to be a bull's-eye. The automatic system was developed in 3.5 months. It currently works in 12.5 thousand stores, and in a year of operation it served 1.3 million customers. Of course, not all implementations have to be so spectacular. Sometimes relatively small changes are enough.

One of the financial institutions decided to reduce the number of employees reviewing loan applications. Along with the automation of the process, employment in a department employing several hundred people was reduced by as much as 70 percent. Examples of this type can be multiplied, although in some areas, introducing improvements may be much more difficult. The McKinsey Global Institute analysts mentioned at the beginning indicated the most difficult and easiest activities to automate. Among the first are business development and building internal relations and audits. On the other hand, the easiest to automate are accounting operations, cash withdrawals, revenue management and financial controlling.