Why Agile Is Now Required for Banking | Agile in Banking
The majority of banks in existence today are shackled to a physical branch distribution model, making them just as vulnerable to upheaval from internet firms as the retail sector was. Even century-old colossi like Sears, Levitz, and Woolworth’s rapidly fell to innovative internet rivals. Financial organisations that fail to quickly digitally alter their business models will suffer the same fate.
It’s critical to understand that digital transformation involves more than merely offering online banking to users. Numerous huge retailers and other companies have previously fallen victim to sophisticated intruders. They had also put forth their own brave (but tardy) attempts to digitise by establishing an online presence.
Real change originates internally. The best chance for banks in the future (and the success of technology companies today) hinges on reframing development so that it prioritises consumer needs over organisational ones. To make change an essential component of this process, the entire business process must be transformed. Agile technique offers the answer. This essay will discuss the value of agility in the banking industry.
Agile: It’s No Longer Just for It
Financial institutions must adopt the same data flows and project management practises as software development companies in order to remain competitive. Agile principles allow businesses to adopt a transparent, data-driven methodology and conduct continuous testing and learning, in contrast to “waterfall” development, which involves delivering a completed product before testing. By offering a minimal viable product (MVP) that satisfies user needs and is adaptable right away, this method also aids in shortening time to market.
According to a McKinsey & Company analysis, “Agility is the most crucial mode of execution for digital transformation.” Agile approaches, according to McKinsey, can boost decision efficiency and product development speed by five times.
Agile approaches aren’t just limited to IT-related projects in the banking industry. Agile business methods may help banks across the board, especially in customer service, wealth management, and marketing.
Agile Banking: A Real-World Approach
Agile is still a relatively new concept in the banking industry. Banks’ access to their data is complicated, compared to many of their new tech competitors, because of the prevalence of internally designed systems, mergers and acquisitions, and aged core platforms. The possibility to try agile techniques of software development start opening up as time goes on and legacy systems are replaced by new platforms created in more contemporary languages, according to James O’Neill, senior analyst at Celent.
A model focused on the customer
Agile methodology’s emphasis on meeting customer demands rather than just creating goods and back-end technologies is one of its core principles. The top priority is to enhance the customer experience at all touchpoints.
The customer experience is crucial to an agile banking provider, according to Jeffry Pilcher in The Financial Brand. “The company prioritises the needs of the consumer before considering its own interests as a financial institution.”
Because of the breadth, accuracy, and intimacy of their client data, banks enjoy a considerable competitive edge. Agile enables the quick and flexible development of applications that exploit such data by utilising advanced analytics. At critical junctures in the customer journey and major life events, this strategy helps engage with and provide customers with more innovative products. Banks may show that they understand their clients by continuously developing and improving such customer-centered goods. Recognize their wants and suggest the most pertinent offers at the best opportunity.
Making the Transition to Agile
According to business consultants Marc Harrison and Isaac Sacolick, “In banking, the iterative methodology that is the hallmark of agile enables speedier creation of and improvement of digital banking platforms in response to client demand.”