Five steps to prepare for the low-code revolution

The ultimate goal of effective technology is to cut complexity, simplify processes and make our lives easier. Over the next five years we will see a combination of cloud technology, powerful Application Programming Interfaces (APIs) and low-code platforms transforming the way financial services firms think about developing, tailoring and connecting systems. It sounds like a utopian vision for the future of financial technology, and it certainly has huge potential, but there are crucial steps firms must take to ensure these technologies function successfully together.

Taking it back to basics, why is the culmination of these technologies so compelling? Low-code development platforms are designed to drastically reduce or even eliminate the amount of coding required to deliver new business applications. As the name suggests, minimal coding knowledge is needed to allow firms to build sophisticated bespoke systems, either by writing basic code in an Excel sheet or even simply dragging and dropping icons through a graphic interface to connect new applications.

Low-code platforms are not new, but we are seeing exciting leaps forward in their use in conjunction with the cloud and APIs. The cloud has fundamentally changed the way we access services, not only providing extra processing and storage capacity, but also transforming how we add additional services through APIs. When using a low-code platform, financial services firms can pull in cloud-based APIs that act as a means of communicating between cloud services using a simple web request – in a similar way to how a browser requests a web page –  to gather data or execute an action. The powerful combination of a low-code platform, cloud technology and cloud-based APIs means firms can remotely pull in and integrate resources into systems that did not exist before.

As we become increasingly reliant on technology, the pandemic has been a time to assess systems, to make sure they are suited to the pressures of a new working environment. Many firms have looked to streamline services, for example consolidating risk and post-trade platforms, to ensure a more efficient way of working.

Historically, this undertaking would have been complex and lengthy, requiring significant IT manpower, vendors working together, testing, prototyping and much more. Now, using low-code platforms, it is a much faster and simpler process, allowing firms to connect with vendors and APIs through the cloud.

Simplicity and efficiency are huge benefits of using low-code platforms with cloud-based APIs, but this also allows firms to open up and optimise their systems. Take, for example, the back office: APIs allow you to go inside traditional black-box systems, shining a light on a wealth of data that can be used and leveraged across a platform – delivering critical insights and making it easier to automate processes in order to drive overall efficiency and performance.

Unlocking this potential can be revolutionary to financial services firms looking to add or simplify workflow. However, firms must take important steps to avoid potential pitfalls. Here are the most important ones:

1. Ensure you have powerful APIs: A low code platform by itself does not do anything. You need to invest in powerful APIs and systems that can be driven by local platform to reap the benefits. You also need to make sure that your systems from the back to the front office are available for automation in order to drive efficiencies.
2. Ensure you have a modern platform: A platform created 20 years ago, or even 10 years ago, is not going to have the features that you will need to implement and connect APIs. Making sure you have an up-to-date platform is essential.
3. Manage and test your systems: Change management and testing is vital. You are building a system that is joining together many disparate systems and may be critical to your business function. Making sure these systems work is fundamental to your success.
4. Plan carefully: Ask yourself who will manage these systems when you are out the office and what happens if it all goes wrong. Make sure the system is fool proof, ensure you understand how to fix problems and ensure others are comfortable with the system and how it works.
5. Be wary of the vendor arms race: The low-code revolution has not gone unnoticed. There has been a boom in low-code vendors which offer different types of solution – some using Excel style platforms, others offering simple text and other in between. The risk of a technology arms race is that there are inevitably losers as some formats fall out of favour. Be wary of this risk and keep informed about the market to mitigate the risk of APIs falling into obsolescence or becoming difficult to maintain.

Overall, low-code platforms, cloud technology and APIs will fundamentally change how the financial technology landscape operates over the next five years – particularly in post-trade services. The benefits of preparing for this future are huge, but firms must do their due diligence and ensure their platforms are up-to-date.

It is an exciting juncture in financial technology – these leaps now represent a revolutionary foundation on which the industry will evolve to fundamentally improve and simplify how we approach platform evolution as it adapts to changing demand.  But, as the Scouts say – Be prepared.

 

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