Low-code and no-code (LCNC) platforms transform how financial applications are built and maintained. While these development approaches have existed for years, the introduction of new AI capabilities is giving them renewed significance, especially for investment companies, hedge funds, and other financial firms. These tools enable faster application development with minimal traditional coding, helping financial institutions accelerate digital transformation while maintaining necessary control over governance and security, even without deep in-house technology expertise.
Current State of LCNC in Financial Services
Low-code and no-code platforms are not new to financial services, where financial firms have been adopting them for years to stay competitive. According to Gartner, the low-code application platform (LCAP) market will reach $16.5 billion by 2027, growing at a compound annual rate of 16.3% from 2022-2027. This growth is particularly strong in financial services, which is outpacing other sectors. This includes insurance, where FIs are outpacing insurance companies in the adoption and democratization of these tools, Forrester reports.
Unique Needs Among Financial Firms Make LCNC a Good Fit
Investment firms have inherent challenges and opportunities that make LCNC solutions particularly valuable. They must maintain large amounts of legacy code while adhering to strict regulations, which has historically slowed innovation. Meanwhile, fintech startups are introducing new forms of financial services, creating competitive pressure. In their July 2022 article, Forbes noted that fintech funding more than doubled to $132 billion in 2021, with an additional $28.8 billion raised in the first quarter of 2022.
By adopting LCNC platforms, financial institutions can balance the need for innovation with regulatory requirements and technical debt management. “[Financial firms] use a wide range of applications to manage customer data, financial transactions, and regulatory compliance,” the American Bankers Association (ABA) describes. “In this context, LCNC-based platforms can support many use cases (in addition to app development) such as enabling and enhancing automation of workflows, process optimization, digital banking, and data analytics.”
Key Benefits of LCNC Development for Financial Institutions
The advantages of LCNC solutions for financial firms are substantial and measurable. Perhaps most compelling is the potential for cost savings—in a joint report, Salesforce and Boston Consulting Group found that financial institutions using these platforms can save between $5 and $8 million in IT operating costs per year. Here, we consider the areas in which these savings are possible.
Faster Development and Deployment
LCNC platforms significantly reduce the time needed to create new applications. Financial institutions can decrease development cycles and standardize their approach, getting new features to market more quickly. This speed is crucial in responding to changing customer expectations and competitive pressures.
Democratizing Development
These tools enable business professionals with little or no coding experience to build applications. As Forbes notes in their July 2022 article, “The result is highly beneficial to business professionals (non-developers) who can aid in the design and building process.” This capability spreads innovation potential across the organization rather than confining it to the IT department.
Addressing the Tech Talent Gap
The financial industry faces significant challenges in recruiting and retaining technical talent. As reported in Forbes’s June 2022 article, the U.S. Bureau of Labor Statistics found that developer job vacancies could rise 22% to more than 2.2 million by 2030. LCNC platforms help financial institutions reduce their dependence on specialized developers, allowing them to make progress on digital initiatives despite talent constraints.
Legacy System Integration
Financial services firms often struggle with outdated technical infrastructure. LCNC tools offer a path to modernization by creating interfaces and applications that can connect with legacy systems without extensive recoding of core functionality.
Practical Use Cases for LCNC in Financial Services
The ABA identifies several key areas where banks and financial institutions are successfully applying LCNC approaches. Here, we consider some of those use cases and the value they deliver to financial firms.
Client Onboarding and KYC Processes
Customer onboarding is often a friction point in financial services, involving multiple verification steps and documentation requirements. Low-code platforms enable firms to create streamlined workflows that automate and optimize this process. Forms, identity verification, and approval processes can be designed visually and modified quickly as requirements change. This improves both operational efficiency and customer experience.
Compliance and Regulatory Reporting
Financial institutions face constantly evolving regulatory requirements. Low-code platforms allow for the rapid development and modification of compliance reporting dashboards that gather data from various systems, apply relevant rules, and generate required reports. When regulations change, these dashboards can be updated quickly without the need for extensive coding.
Portfolio Management and Visualization Tools
Investment firms can use low-code platforms to build customizable interfaces for portfolio management and client reporting. These tools can pull data from multiple sources and present it in formats tailored to different client needs. Business users can modify these tools as client requirements change, without waiting for IT department resources.
Process Automation
Many financial processes involve repetitive tasks that can be automated. The ABA notes LCNC platforms can aid in “automating business processes, such as account opening, customer onboarding, know-your-customer (KYC) verification, [and] transaction processing… among others.” This automation reduces manual intervention, improving efficiency and reducing errors.
Digital Banking Experiences
As customers increasingly expect seamless digital experiences, financial institutions are using LCNC tools to develop and enhance their digital banking offerings. These can include chatbots, virtual assistants, and personalized interfaces that can be quickly updated based on customer feedback.
Implementation Considerations for LCNC
While the benefits are compelling, financial institutions must approach LCNC adoption strategically. In a January 2022 article, Forbes highlights several key considerations for financial firms undertaking digital transformation with these tools:
Governance, Risk, and Compliance
Low-code and no-code platforms must be implemented with proper governance frameworks. “Implementing no-code or low-code solutions within an organization could bring its own set of challenges regarding governance, risk, and compliance (GRC),” Forbes notes. “Because these solutions lack guardrails, IT professionals have more leeway to experiment with internal technologies, leaving some room for potential error or mishaps.”
Strategic Alignment
Successful implementation requires clear business objectives. “Digital transformation is more than just an industry buzzword; it’s taking place and advancing on a daily basis. Enterprises must create a tangible plan and strategy to remain competitive.” Organizations should identify specific processes and applications where LCNC will deliver the most value.
Integration with Legacy Systems
Financial institutions often have complex legacy systems that need to be considered. Forbes highlights that “legacy systems remain a challenge as financial firms continue to scale and grow, as some firms have adopted the ‘don’t fix what’s not broken’ mindset.” LCNC solutions need to be evaluated for their ability to integrate with existing infrastructure.
Training and Resource Allocation
While LCNC platforms require less technical expertise, they still demand some training. Forbes points out that “developers and other IT professionals working with these tools must learn to use them correctly to reach their desired business outcomes.” Organizations need to invest in appropriate training and support.
The ABA recommends a practical approach to implementation: “Banks should consider starting a pilot project that allows adequate testing and evaluation of benefits and drawbacks in a controlled environment. Some key factors to consider include the platform’s features and capabilities, ease of use, scalability and security.”
The Future of LCNC in Financial Services
Now, advances in artificial intelligence (AI) are significantly influencing the development of LCNC platforms. New AI models and tools are rapidly transforming software engineering in ways that were not envisioned a couple of years ago,” according to Deloitte. “In fact, almost every stage of the software development life cycle is being reimagined with new waves of AI models.” Here are some of the implications this convergence of AI and LCNC methods has for financial firms.
Enhanced Development Capabilities
AI is making LCNC platforms more powerful. Deloitte notes that AI tools can help address development challenges by “improving engineering productivity at [financial firms] in multiple ways.” For example, some AI models can help modernize legacy code by converting older programming languages to modern ones.
Automation of Complex Tasks
As AI capabilities advance and agentic AI becomes more standardized, LCNC platforms will be crucial to automate increasingly complex development tasks. Deloitte notes that “AI agents can now autonomously convert ideas expressed by humans in natural language into executable code.” This capability will further expand what non-technical users can accomplish with these platforms.
Greater Integration Possibilities
Future LCNC tools will likely offer enhanced integration capabilities, allowing for easier connection with a wide range of systems and data sources. This will be particularly valuable for financial institutions dealing with complex data ecosystems.
Continued Focus on Security and Compliance
As LCNC adoption increases, vendors will strengthen security and compliance features specifically for financial services firms. This will help address the two primary concerns that have slowed adoption in highly regulated industries.
Driving Digital Transformation with LCNC
Low-code and no-code platforms offer financial institutions a powerful way to accelerate digital transformation while managing costs and addressing talent shortages. By enabling faster development cycles and empowering business users to create applications, these tools can help investment firms, hedge funds, and other financial companies respond more effectively to changing market conditions and customer expectations.
The benefits are clear: reduced development time and costs, greater business agility, and more efficient use of technical resources. Financial institutions that successfully implement LCNC strategies can gain significant advantages in innovation, customer experience, and operational efficiency.
As AI continues to enhance these platforms, their capabilities and importance will only grow. Forward-thinking financial firms should evaluate how LCNC approaches can fit into their technology strategies, starting with targeted use cases, then building more advanced capabilities over time.
A True Partner for Your Firm’s Digital Transformation
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