Is no-code technology the future of WealthTech?
No-code technology is quickly becoming a major trend in software development. As wealth managers continue to increase their exposure to digital services, will no-code technology be their go-to solution?
According to research company Gartner, 70% of new applications developed by enterprises by 2025 will use no-code or low-code technology, up from less than 25% in 2020.
So, what exactly is no-code technology? It describes software products designed for fast, easy implementation without the need for programming skills. Leveraging graphical user interfaces and prebuilt configurations, these solutions are often drag-and-drop and can quickly digitise processes with significantly fewer IT resources. No-code is designed to allow businesses to customise products, without needing to hire a team of coders.
Another report from Gartner predicts that by 2024, 80% of technology products and services will be created by those who are not technology professionals.
With the current emphasis on digital transformation and personalisation, it is easy to see the appeal of the technology.
The question is, will no-code be the future for WealthTech solutions? Put simply, Stefan Willebrand, founder and CEO of SaaS financial services platform Bricknode, said “As with most things there is no silver bullet.” Willebrand stated it all depends on the problem that needs to be solved.
“I have always liked to combine working with no-code platforms with building my own custom components through coding. If you are only using no-code solutions, you will have a hard time creating unique experiences so I think that there are only so many shortcuts that you can take.”
For example, Willebrand said he would utilise a no-code solution when building a new website or building a company’s first customer portal within wealth management. This will help get experience with development and a taste of what can be done. Once this has been operational for a while, Willebrand would use the gained knowledge to create a unique customer experience from the start with his own code.
Moving even further away from the benefit of no-code technology, Fredrik Davéus – co-founder of financial analytics API developer Kidbrooke – sees little value in the technology. Davéus said, “I’m sceptical of low/no-code solutions overall. You can only do what the platform allows you to do. Few people have training on each solution vs more general programming languages. It does not take away the need for skills associated with software development since any large project will require classic dev ops.”
Is no-code better for scalability?
As mentioned, there is clearly a rising interest for no-code and low-code technology. Willebrand believes this is also happening in the wealth management space, with firms seeing the technology as an easy way to start a business without needing a big investment in development.
It is no secret that firms have been held back by legacy technology. This has often hindered firms’ ability to adapt to new solutions, and as a result, firms are often keen on scalability. Having a solution that can scale for the future is beneficial in the long run. No-code technology, like most software, has pros and cons for scalability.
Willebrand stated that it all depends on the company’s requirements. For example, if the company is launching a customer portal where a few thousand customers will log on a few times a month to monitor their portfolio, there would be no issues with scalability from a performance perspective. However, if a firm is releasing a day trading platform that is data intensive and needs low latency, Willebrand believes full control of the code is essential.
As for a maintenance and development perspective, Willebrand stated no-code has benefits of not requiring staff to learn complicated code, particularly new joiners.
Davéus also highlighted some potential challenges with scalability around maintenance and flexibility when relying on no-code technology. He said, “Maintenance since you have to train people specifically on the solution and flexibility since you can only do things that are supported within the framework of the low code solution.”
Benefits of no-code
Karen Oakland, VP of industry marketing for financial services at customer conversation management software developer Smart Communications, highlighted that many wealth managers are already benefiting from no-code. For example, many are transforming their business processes from traditional PDFs and static web forms into a guided digital interview instead, which enables a more personalised, adaptive customer experience.
Oakland explained that these adaptive digital and mobile interviews are integrated with the core systems, eliminating the need to rekey information or upload documents. Questions and rules can be updated within minutes as market conditions or regulations change, all while meeting internal guidelines for security and data management. Additionally, complex documents and document packages can be generated on demand and automatically delivered via e-signature solutions to streamline customer experiences.
Oakland added, “With pre-built, validated connectors to many of the core systems used in banking today, as well as a flexible architecture and open APIs, SmartIQ can be implemented in weeks. Like many low-code solutions, it’s also purpose-built for business users, with no Java or programming skills required. Without putting in an IT request for help, analysts or other non-technical users can further control a range of visual and brand elements—from logos and colours to typography and styling—and view them in a live preview that makes it easy to view changes instantly and in context.”
Another benefit Oakland outlined with no-code technology was increased operational efficiency due to reduced paper and manual workloads when opening, onboarding data collection, servicing and reporting. There is also the chance for improved data quality and eliminating Not in Good Order rates, as well as improved speed to market by quickly onboarding new investments faster and improving customer satisfaction and speed to revenue.
Oakland also said no-code offers a better use of resources by reducing manual workloads, and reduces IT development costs through the easy-to-use interfaces.
Problems with the technology
That said, there are some challenges companies need to be aware of before they dive into the world of no-code technology. Alongside flexibility issues, Davéus stated that there is a shortage of people with knowledge of these specialised solutions, compared to those with general programming language skills.
Willebrand echoed the same challenge around flexibility. When using standardised components, even if they are configurable, there is a limit on what can be done. But not everyone will need to go beyond the limits. “The most annoying but also true answer that I usually get from my developer friends in our discussions is ‘it depends’.”
Another challenge both Willebrand and Davéus highlighted was the risk of getting too excited by the hype and not properly assessing solutions before engaging with no-code solutions. Willebrand said, “You need to find some sort of balance between paralysis by analysis and jumping the gun too early. The risk is the same with any new project that is started and nothing that in particular relates to no-code solutions other than it might be even a bit easier to jump the gun too early since the barrier of entry is lower.”
While it might be tempting to jump straight in, firms need to know what they want and go in with a vision and plan.
Willebrand added that a long-term mindset is key. He added, “Platforms and systems within finance should be bought in the same way as firms are buying CRM systems like Salesforce or project management systems from Atlassian. There should not be a crew of consultants needed for a year to get a solution going for you, it should be instant, and you or maybe a single consultant should be able to get things configured and going for you.”
Oakland also warned firms to be thoughtful about their adoption of the technology. “No code / low code applications aren’t a panacea for all ills,” Oakland said. She added that using many different platforms and solutions multiply the risks of bad apps and information chaos. As a result, IT teams need to have processes ready for system governance to support business agility and information security.
Oakland added, “No code solutions are not always designed to scale to meet enterprise needs, and customers today are unforgiving when a system goes down.
“Not only that, but it’s important to look at interoperability and integration with your core systems. It’s difficult enough to live with data silos with legacy on-premise software. Don’t let your business users create even more silos. IT leaders need to partner with them to create the data connections they need, then make sure they are able to manage the day-to-day changes and optimisations. Furthermore, IT needs to make sure that the business keeps up with training, or the system can end up sitting on the virtual shelf.”
The future?
With a look into the future of no-code technology, Oakland concluded, “No one wishes for a global pandemic, but most industry experts agree that as customer behaviour shifted to digital channels in the years since 2020, this has accelerated investment in digital innovation. This puts pressure on IT leaders to build a strategy that delivers competitive differentiation.
“This competitive pressure will continue to grow. Celent reports a Microsoft estimate that 500 million new apps will be built by 2026, more than was built in the previous 40 years. Demand for applications is growing five times faster than IT departments can deliver. This need for business agility requires IT leaders to take a step back from the desire to control, and to consider where low/no code solutions can actually reduce the burden on their departments and deliver value to the business in weeks, not years.”
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