The BFSI (Banking, Financial Services, and Insurance) sector has always been at the forefront of technological change. In the digital age, where convenience, speed, and customer-centricity reign supreme, the need for innovation has never been more critical. In this ever-evolving landscape, two transformative technologies have emerged as game-changers: low-code development and artificial intelligence (AI). And while neither of the two are subjectively ‘new’, the refined solutions now at disposal of app makers make them easier to adopt and work with. Together, they are redefining the BFSI industry, ushering in an era of unparalleled efficiency, agility, and customer satisfaction.
OPTIONAL SECTION ON FINTECH – AND HOW ITS POTENTIALLY A CHALLENGER FOR LEGACY BRANDSIndia has emerged as a vibrant hub for financial innovation. And fintech is on a roll. 2022 was a milestone year for Indian FinTech startups, ranking as the second most funded startup sector in the country. These startups successfully raised a staggering USD 5.65 billion in 2022 alone. As testament to the industry’s robust growth, the number of unique institutional investors in Indian FinTech nearly doubled between 2021 and 2022, surging from 535 to 1019 respectively. (Source)
As Indian FinTech firms harness this capital influx and burgeoning investor interest, they are poised to revolutionize the financial landscape by offering cutting-edge digital solutions and significantly streamlining traditional consumer-facing processes. Notably, self-service transactions are estimated to cost up to 99% less than those requiring human intervention, as estimated by Gartner.
Legacy financial houses and banks rely on their long standing brand names, which give them an edge over new-age players in the industry. However, they recognize that complacency isn’t an option, especially with the tech-savvy generation’s preference for digital self-service interactions. To compete effectively with neobanks and technology-driven financial services, these established financial institutions are turning to modern tools for assistance.
In this article, we will explore how embracing cutting-edge technology can empower these firms to navigate the constantly evolving regulatory landscape, introduce innovative tools for enhancing customer experiences, and optimize their technology infrastructure for improved internal operational efficiency.
During the ETBFSI Conclave conference, GPJ Gupta, President – Head of Business Solution Group at Kotak Bank, shed light on their innovative approach to meeting customer needs and streamlining operations. “A crucially important area for us is to meet the customer needs; those needs to be fulfilled whenever, wherever the customer is. And we enabled a lot of these needs by creating DIY journeys (Do-it-yourself user journeys) using low-code so the customer can, on-demand, perform the tasks in faceless channels. Another critical area is to bring operational efficiency. It is important to reduce operational costs. So we made a lot of operations completely seamless with custom tools so the time and manual labor going into transactions is significantly reduced.”
The prospects of Low-Code Development
Not long ago, digital transformation initiatives posed significant challenges, especially for organizations with vast and complex infrastructures. These initiatives involved meticulous planning and extensive, high-risk development projects, often stretching timelines and budgets. However, the advent of enterprise-grade low code platforms has changed the game entirely.
In contrast to traditional development methods, low code platforms provide an all-visual development environment, eliminating the need for long and complex development cycles. Even novice developers can swiftly design and build internal as well as customer-facing applications. And plug-and-play integration capabilities enable the creation of applications handling complex transactions across disparate backend systems including AI capabilities.
Low code empowers teams to harness AI APIs, creating AI-powered applications with numerous benefits, including faster customer query resolution, fraud prevention, compliance tracking, automatic product suggestions, and AI-based automation.
Whether it’s rapidly developing customer-facing applications, optimizing internal processes, or revolutionizing product offerings, low code empowers BFSI institutions to innovate at unprecedented speed and scale.
In the next sections, we’ll explore how low code and AI technologies are driving notable changes in the BFSI sector, pushing banks and insurance companies to the forefront of innovation.
Make application development customer-centric
Low code platforms empower business teams to think like consumers. With a visual development environment, configurable UI components representing user-facing features, back-end logic, and integrations with databases and legacy systems become accessible. This approach allows for the design of applications that prioritize the user experience.
This method enables you to swiftly create a basic but functional product (MVP), even for intricate transactions involving multiple backend systems. The sooner you deliver these apps to consumers, the quicker you can begin collecting detailed user data to understand what’s effective and what’s not. With this insight, you can promptly make improvements to enhance the customer experience, mirroring the agility that startups excel in.
Streamline Your Operations: Leveraging 3rd-Party Services and AI Integration
From identity verification to employment and income verification, even one step in a financial transaction can require complex, multi-step processes. Low-code enables you to complete digital transactions swiftly and securely. Developers can easily incorporate crucial features into their app environment. When they wish to integrate these features into their application workflow, they can simply drag and drop them into their app design. Artificial intelligence-driven analysis and natural language processing can streamline manual review processes, automate complex decision-making, and provide immediate offers to customers.
Empower Self-served User Onboarding Journeys and KYC
In a way emerging technology in BFSI is helping to design customer-centric journeys that are compliant, cost-friendly, and risk-proof. Here’s how.
Creating effective Know Your Customer (KYC) and onboarding processes is crucial when bringing new customers into the banking fold. These steps ensure a smooth and reliable customer experience. In today’s regulatory landscape, KYC has become mandatory, even for existing user journeys, which may seem complicated to integrate with a KYC verification system. However, by tapping into available AI-powered APIs for identity verification, you can design customized user interfaces and efficiently apply the right AI techniques to provide outstanding user experiences. This method reduces the need for repetitive data entry, speeds up the onboarding process, digitizes workflows to seamlessly connect with KYC and due diligence procedures, and improves the overall customer experience with self-service features.
“DronaHQ has been our driving force in rapidly creating seamless partner onboarding journeys and dynamic performance monitoring dashboards. It’s a game-changer for our marketing team, streamlining partner onboarding effortlessly,” shares Punya Samal, Program Manager, Nuvama Wealth (Edelweiss) about a low-code developer tool – DronaHQ
Take a modular approach and modernize legacy systems quickly
Low code offers an agile alternative to the traditional, multi-year digital transformation projects. It enables banks and insurance companies to start building applications without altering underlying systems. Through pre-built APIs and visual development, developers can quickly connect customer-facing elements with back-end processes.
Hence, banks can update customer-facing apps without needing to completely overhaul their current systems. Equally significant, they can stick with a top-notch approach for the future, adapting to suit business requirements while reducing the chances of disturbing customer satisfaction.
IDFC Bank used to conduct a crucial HR appraisal process using a complex, spreadsheet-based data collection for peer-to-peer evaluations and data was manually uploaded to the organization’s SAP systems. In just 2 weeks time, they were able to transform its appraisal workflows, giving its employees a mobile-enabled tool to evaluate fellow peers. Reports were generated instantly after the employee submits data and that can be updated to the SAP systems. Instead of building a custom app using traditional code, they launched the app in just 2 weeks, owing to the speed of the platform. The HR/admin would be able to download the report for further decision making. The efforts to update a complex internal process were significantly reduced. Because it was built using low-code, the solution is easily customizable and the bank can easily manage the processes without compromising security.
Meeting Evolving Regulatory Requirements
For an enterprise grade, low code platform- key capability is the fact that developers can quickly create the front-end binding it to the data sources and roll it out in a secure fashion and what enhances that speed is the ability to quickly iterate on top of the applications and make changes in a short span of time. Banks can whip up front-end and securely embed it in their existing customer portals or websites. Think adding a new form on your website to allow customers to raise requests for your newly launched limited time, credit card offer or adding a new graphical view on your customer portal for users to track their expenses. All this can be built in a matter of weeks rather than months.
What about Security
Security, compliance, and governance are paramount concerns. Large financial institutions have been understandably cautious about embracing digital innovation, fearing potential risks such as data breaches, regulatory violations, or financial governance lapses. However, the need for innovation remains pressing. Fortunately, with enterprise-grade low-code platforms BFSI institutions can strike a balance between security and innovation.
These platforms rigorously test every element for vulnerabilities, ensuring robust security and compliance. The all-visual development environment significantly reduces the risk of introducing new security weaknesses.
Understanding the Return on Investment and Identifying right applications for lowcode approach.
“We have to look into a lot of soft aspects as well for the digital apps, operational apps that are rolled out. Low code tools can help optimize cost while making the solution. But we also have to carefully identify which solutions can be best made with these tools. We identified a lot of branch level applications, operations schema were right fit and sped up the turnaround time. Lifespan of these apps have come down from 3 years to 12 months, so a faster GTM makes lot of sense” added GPJ Gupta
In conclusion
The examples we’ve shared are just the tip of the iceberg. Low code empowers backend developers to swiftly create frontend applications, opening doors to a wide range of possibilities. These include streamlining approval processes, crafting internal operational tools, building lightweight microservices, developing CRUD applications, and implementing lightweight ETL solutions.
The BFSI sector is undergoing a remarkable transformation driven by the integration of new technologies. With low code and AI as their allies, BFSI institutions are poised to lead the way into a future of unparalleled innovation, customer-centricity, and efficiency.
(Brand Connect Initiative)
