Peter Faulkner, DB Results, and Richard Davies, OutSystems, discuss the advantages of low-code in the financial services industry with The Informer's Michael Ray.

Michael Ray: Joining us again today is Pete Faulkner from DB Results. Now, Pete's got over 20 years’ experience working in the digital realm. He leads the delivery of innovative digital capabilities for his customers with a wealth of experience and passion. Now, Pete's helped many organisations transform their digital assets and he's accumulated experience across all aspects of the digital solutions, from the creative side, all the way through to the detailed technical systems integration end of the spectrum. Now, last time, we spoke with Peter about low-code. This time, I want to speak to Peter about some of the real success stories in the financial services industry, which involve the next generation of digital technology with that low-code. Now, Pete, I understand today you've brought along a guest to join us.

Peter Faulkner: Yeah, I have, as you said we're building on that story from last time. So last time we spoke about low-code in general and what techniques or but we wanted to make it really specific today and talk about some real examples. So, I brought Richard Davies along with me from OutSystems, we work with Richard at OutSystems. So, I guess one of the leading low-code platforms globally today and consequently, there are some great success stories and real takeaways that organisations, CIOs, business leaders, etc can take back to their organisation to consider, and think about, as far as embracing that next generation. So, Richie and I'll talk about that today.

MR: Alright, great to have on board Richard. Now Pete, what trends and requirements are you seeing across the financial services that are requiring a different approach to what we've always had?

PF: Yeah, well, it's interesting. If you look at the market at the moment, it's obviously being compressed by the challenges of COVID and working virtually. We've got closed borders, but through that we've got a resource shortage. But if you look at what the banks are doing, what the insurance companies are doing, well, super and so on. They're ramping up activity and consequently, they're running out of capacity to get work done and it's further compressed by the fact that there's a really competitive market out there. There's lots more FinTech organisations coming on the scene and these organisations are looking to be more agile or responsive and deliver more with less. But they're butting up against the problems of the old or current frameworks and legacy within their business, it's holding them back from moving at the speed necessary to, I guess, break away from running the business and keeping the lights on sign regulated, to being in a very competitive, agile, digitally enabled space.

MR: Now, Richard, we often hear about the next generation in the digital world. Next generation Wi Fi, next generation operating. What does next generation actually mean for the financial services industry?

Richard Davies: Well, maybe I'll position it this way. A lot of people know about the idea of buy versus build and this is a classic decision that a financial services IT organisation has to make. Is there something off the shelf, or do I build it myself? And they realise that building is the way to get differentiation, but there's often a lot of costs associated with it. So, a lot of them are turning to platforms. Platforms are typically things that these organisations look to build themselves, often throwing huge numbers of resources and using a whole bunch of open-source software to construct these, as well as leveraging things like cloud services. So, from our perspective at OutSystems, the next generation is really looking to provide an out-of-the-box platform that a customer doesn't have to go and spend a massive amount of money on themselves to build and to maintain, which will then let them provide the sort of differentiation that will let them get ahead in the marketplace.

MR: Now, Richard, we at the front end, all the consumers, don't really notice a lot of this. Is there a competitive advantage for adopting this new generation?

RD: Yeah, look, you end up seeing the front-end effects on you in a number of areas. One is sometimes there's actual customer facing digital capabilities, things like the mobile apps, the banking portals that you're used to interacting with, for instance, with a financial services company, sometimes that's the area of improvement. Some of the other improvements are more in the back office, and you see those sorts of tangible improvements in things like loan processing times, which are often taken up by a lot of compliance activities which aren't directly visible to the customer, but which creates a big drag on the bank’s efficiencies. And then you'll also see it hopefully, in things like increased interest rates when banks can reduce their costs, which are absolutely massive to maintain the IT systems that they have.

MR: Great, now Pete, last time you spoke to us about the spectrum of low-code technology platforms, and now I'm hearing about OutSystems. Where does this fit into in this spectrum?

PF: Yeah, so I guess just to recap on that, if we look at low-code, which is a widely used term now. This is the next generation, we're seeing where development is going for organisations, that there was a spectrum of different types of low-code platforms. So, we've got business process management platforms, which are all about workflow. Domain centric platforms such as, take Salesforce for example, a CRM, which has its own low-code development environment, but within that domain. But then we get to the, I guess, the top end of that spectrum, which is what we refer to as pro-code, which is where OutSystems sits. And this is a direct competitor to traditional development where you can build anything that you need for a business. From portals to mobile apps, to business process solutions, integrate with your existing systems, grade integration points, all the things you need to do in one convenient place. And this is one of those things I think for people, watching this segment to understand, is that there is this spectrum, and you might have some of these platforms in your network or in your environment. But if you really want to take cost out of the development, bespoke solutions, something like an OutSystems which provides you the capability to deliver end-to-end.

MR: Pete, these OutSystems platforms sounds great, but are they already being used across the Financial Service industry? And if so, can you tell us about some of the success stories?

PF: Yeah, they're certainly being, I'll refer to Richie as well on this one, but they are certainly being used across the board, both within Australia, across Asia, and globally. Banks, insurance companies, well, across the spectrum we have a number of customers ranging across those industries. One that springs to mind is a large life insurer we're working with. Who've really standardised on this approach globally, because a) they couldn't find the people that they needed, b) they were going through a pathway of acquiring lots of businesses and needing to move with speed to integrate those businesses into their broader organisation framework and having very bespoke requirements around that. So, it was really a question of what's the cost equation of buying before build, versus build before buy, and what they've standardised on OutSystems. Because they could move faster and build stuff cheaper by using OutSystems, than if they bought a product off the shelf and configured it, and then they get what they want. In fact, just to give the viewers an idea, we were able to build an entire policy administration system, which is a complex backend system, within three months with this type of approach. That's a real game-changing approach, which is really taking cost and time out of these sorts of initiatives, which are integral to a business like that. So that's an Australian based example. Richie, you want to talk to some others?

RD: Yeah, look, there's a really interesting example in the Philippines, which is Union Bank. So, Union Bank became a customer of ours in 2018, not too long ago. They've already... when we did a bit of a checkpoint with them six months ago, they'd built 67 new applications, in which 25 are key business critical apps. They range from their core retail mobile app, and an in-branch robot they've built, with this really cool iPad behind it. A whole bunch of employee facing portals, back-end processing such as AML screening. They've been able to derive increased efficiency through a new document management system, and they've also been expanding into specialised banking areas, like being able to do cheque deposits just by scanning a photo of the cheque. Now, in terms of tangible benefits, what they've been able to achieve between 2018 and 2020 is, not only has their net revenue gone up 28%, but at the same time, their cost of income is down 22%. And if you look at Bankquality.com, in the last year from 2020 to 2021, they've gone from 25th to 1st place in terms of net promoter score. So, they've really been able to achieve the trifecta of what banks are even struggling to achieve. One of which is increasing their revenue and also increasing their income and increasing their customer satisfaction, and a lot of these they put down to their strategic shift to using the OutSystems platform.

MR: Well, it's really pertinent at the moment with insurance companies at the forefront, given the horrific floods that we're seeing up in our northern end of Queensland and New South Wales. Banks are often in the picture as well and we hear about them spending hundreds of millions of dollars on this, those savings you've just mentioned, is that because you've managed to simplify the complexity and reduce their spend.

RD: So, there's a number of different areas that it comes from. One that I'd really like to call out is there's definitely an increase in developer productivity, but what a lot of people I guess don't realise around the sort of mature low-code platforms that are enterprise ready like OutSystems is. There's also a significant reduction in BAU resourcing and costs. So, you don't need teams to be setting up and configuring, and maintaining, complex cloud configurations. All of the different services that organisations are typically using, AWS, or as you require a massive team typically to configure and maintain. So, there are cost savings at that end as well around the whole application lifecycle, as well as productivity increases around development. And all of these pay sort of a dividend in terms of being able to innovate faster, as well as saving costs. And that helps these organisations not only differentiate, but in the case of things like floods that you mentioned, and obviously when the pandemic started, there's a need for organisations to move faster to adapt to changing conditions, you know. With all these, this chaos that we're seeing in the world at the moment, all organisations need to be able to move more rapidly and that's what we're seeing our customers being able to do with these new capabilities.

PF: I was just gonna jump in there just on your point about the insurers. Imagine what it means to the customers of that insurer if they can now get a solution related to the floods, and helping those customers who've been affected, out in days to weeks, rather than waiting weeks to months to get a solution. And that's part of the speed approach, we've had solutions go from zero to complete, into production, used by customers, within I think the shortest was four days. And it's in a large financial institution with compliance requirements and testing, having to get everything approved and ticked off. And this is the sort of game-changing agility that can be unlocked with this type of approach.

MR: Well, Richard, you've sort of answered one of my next questions here because ironically getting digital done right, used to require or seem to require lots of people and it's often announced that financial services organisations see themselves as technology companies, and often set out to build their own platforms at great expense on which to deliver those various solutions. Do they actually still need to do that, given what you've told us now?

RD: Look, I think, as I mentioned, right up front, that's been the traditional approach of these organisations. And also, maybe when they've looked even in the low-code space, they've looked at sort of the more well-known players in this space. Pete mentioned a couple like Salesforce and Microsoft, and they've got capability in that area, absolutely. But usually, it's not enough for say, a banker or an insurer to go right I can really change strategically how I am approaching my development. They just don't have the breadth of capability in there, and part of what's important when you're looking at a platform is to understand what is going to be the resource impact. So as I mentioned, I think that a mature enterprise like a platform like OutSystems, really gives organisations the ability to change their strategy on how they do custom build, which is always going to be a key component and the savings are going to be around the sorts of resources. Now, the other point is we know that these savings won't necessarily mean cutting staff, it's just re-tasking the staff within the organisation to work on a platform that's going to be vastly more productive, so that they can attack their backlog better than they currently are. So that's what we're starting to see in the market, the financial services industry is waking up to the fact that there is a better way of doing things and we better jump on, otherwise we're going to get left behind.

MR: Now Pete, we also know that with change there also comes pain. I know that my 10-year-old daughter is now my IT manager as far as the password goes when we upgraded our modem. So is going to the next generation of technology, obviously has its own set of challenges. And what does this change mean for actual organisations and developers and their customers?

PF: We are creatures of habit aren't we, and we do like to be in that status quo, and you can't innovate without pain. You can't change without pain professionally; you're changing before the pain gets too much that you're forced to change. But for organisations, there's lots of commitment to strategies. There's lots of people that have been hired, which have spoken about how hundreds of people are often brought in to build these frameworks and stand up the technology. Then these people ever-refreshing and replacing that technology every three years to keep things current, but it's sort of a endless battle of keeping things current. And that's the change here is a bit of a mindset, it's going from doing what they're currently doing around maintaining that framework and how the organisation operates, to switching around to thinking about outcomes and what they can do for the business. How much more value can they deliver if they can move faster? What else can they do if they can make fast, and it takes a bit of a set of belief. It takes a bit of faith in there because this is new for everyone. And we're finding successes with the organisations who can say here's a small area where we can start, we can prove that it's actually going to deliver value, demonstrate that value and play it back to the organisation. We went through this about seven years ago now when we changed our development teams across from the people who defined themselves by the technology frameworks they knew, so that they could look on LinkedIn and find jobs, to now, they are developers who think about how much revenue they're helping an organisation to bring in, to how much they're uplifting customer experience. If it's not for profit, how much they're bringing a valuable service to people. If it's the government, like the NDIA, how they're helping people with disabilities, but it's spending money using the solutions they've built to get the services they need, and it's much more rewarding. It does take a mindset shift and it takes support from the top and across the organisation to really reinforce a culture and the belief required to make this part of path forward.

MR: Alright Richard, so if I was a Chief Information Officer of a bank and not, you know, a second-rate host on a first rate news organisation or an insurance company. What recommendations would you have for me to take advantage of this new generation of technology?

RD: Okay, so first of all, I'd really recommend having a good look across the board of what's available. As Pete mentioned early on, there's a lot of technologies out there that have got the low-code stamp on them. They have very different heritages and very different sweet spots and sets of capabilities and for something like a large bank, there's really only some of them that are suitable across the board. There are lots of analyst reports that will help you know these sort of thought leaders understand what the differences are. And secondly, to Pete's point, I would also recommend starting with whatever a particular pain within the organisation is. Obviously, you're not going to go wall-to-wall changing how things work on day one, but there are plenty of fires that we see in financial services organisations that need to be addressed. So, it's sort of like the, think local, act local, think global kind of message. So, think about what you can fix now, but look at what the strategic advantages you can bring to your organisation by shifting more broadly how your how your custom development is done, and consider those so those would be my two key messages. Look at what's available now. Look at it in detail because there is a lot of differences and look at it strategically, how it can have an impact on your organisation.

MR: All right, Richard and Peter from DB Results. Thanks so much for the insights.

PF: No worries.

RD: Thanks very much.