In the digital age, consumers increasingly expect new services that meet their needs and enhance their experiences. As banking becomes more commoditized, innovation is key to remaining competitive, and banks are beginning to realize that collaboration is the fastest way to innovate. Innovating internally is a slow process, but the rise of low-code development tools in conjunction with a Platform-as-a-Service approach is giving banks a new way to create more immediate value for customers by utilizing the skills of a new type of developer: the mashup coder.

Traditional developers are the architects of the core infrastructure in place at most banks today. They are typically from computer science backgrounds and the coding they do is complex in nature. As maintenance of legacy systems consumes 80 percent of banks’ IT budgets, the demands on these developers leaves them little time to innovate. If they are expected to create new applications on top of legacy, progress will inevitably be slow.

Mashup coders, on the other hand, who rely on open APIs, web apps and open data sets, are the agile, thriving inhabitants of low-code platforms. The skills needed to create applications in these environments are less traditional in a development sense. Mashup coders don’t need to be from heavy science backgrounds, nor do they need the technical knowledge necessary to build out core infrastructure. The key attribute they possess, which allows them to innovate at pace, is the ability to see the potential of combining data sets and functionality to create new applications.

Data directing development
Legacy systems are full of valuable transactional data, but for many years banks have not been able to use this data in a way that services their customers. With a platform-based approach, banks can open up their systems to trusted mashup coders via open APIs, allowing them to combine proprietary data sets with external data. An example of this might see a mashup coder combine transactional pattern data with weather pattern data, creating new insights about customer behavior. This might then be used to feed a new app that provides data-driven recommendations to customers.  

Mashup coders can use any ready-made smart elements incorporated in low-code platforms to create new, customer-orientated apps. The use of standardized core components means less source code needs to be written. Mashup coders can readily combine components just by dragging and dropping them, helping them create new applications more quickly. Just as services such as LinkedIn provide endpoints from which mashup coders can pull data and embed it into their applications, low-code platforms allow banks’ data endpoints to be used in a similar way.

Freedom to innovate
Key concerns for full stack developers when building applications from scratch is that they must be security and regulation compliant. But with a platform-based approach, these concerns are no longer a block to innovation. A mashup coder creating applications in a low-code ecosystem does not need to be regulated by the relevant financial authorities – it is the banks who bear the regulatory burden. As mashup coders work with the components created for them by their full stack counterparts, their applications should be fully compliant by default.

Just as Zoopla can be confident that Google Maps is secure and compliant with relevant regulations when using Google Maps on its website, mashup coders can work in a similar way with the available components in a low-code environment. In turn, banks can deliver more immediate value for customers – without compromising mission-critical systems, which will continue to evolve at a slower pace.

Aligning development strategies
Bank legacy systems are often decades old and have been gradually built upon and upgraded over the years using new file formats, programming languages, and standards. The consequence of this approach has left banks with a complex framework of isolated solutions which they must contend with when they want to create new applications.

Starting with an application infrastructure that is both dynamic and modular is one way challenger banks can avoid the problems of legacy. But while they may have the upper hand when it comes to innovation, as they are able to take advantage of advances in computing power and the availability of more mature, off-the-shelf components, they will start to face the same legacy challenges as they scale out – unless they think in a more agile way.

Banks realize this and are now defaulting to a two-speed innovation model. While in-house development focuses on making core systems more dynamic, future-proofing them so they are able to adapt to new advances in technology, innovation from the outside takes the form of collaboration with smaller, more agile entities.

As collaboration becomes the standard for innovation in banking, banks should be looking to create environments that facilitate this. Low-code platforms support this collaboration by giving third parties access to data which has previously been locked within legacy systems. If banks are serious about delivering more immediate value to customers, they need to think about how they can attract this new breed of mashup developers and incentivize them to deliver the innovation and service digital customers crave in the digital age.