Is no-code technology the future of WealthTech?

by James · August 31, 2022

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 firm Gartner, 70% of new applications developed by enterprises will use no-code or low-code technologies by 2025, up from less than 25% in 2020.

So, what is no-code technology? It describes software products designed for quick and easy implementation without the need for programming skills. By leveraging graphical user interfaces and pre-built configurations, these solutions are often drag-and-drop and can quickly digitize processes with significantly fewer IT resources. No-code is designed to allow companies to customize products without having to hire a team of coders.

Another report from Gartner predicts that by 2024, 80% of technology products and services will be created by non-technology professionals.

With today’s emphasis on digital transformation and personalization, it is easy to see the appeal of the technology.

The question is, will no-code be the future of WealthTech solutions? Simply put, Stefan Willebrand, founder and CEO of financial services SaaS platform Bricknode, said “As with most things, there is no silver bullet.” Willebrand said it all depends on the problem to be solved.

“I’ve always liked to combine working with no-code platforms with building my own custom components through coding. If you only use no-code solutions, you’ll have a hard time creating unique experiences, so I think there are only so many shortcuts you can take.”

For example, Willebrand said he would use a code-free solution when building a new website or building a company’s first client portal in wealth management. This will help to gain experience with development and a taste of what can be done. Once this has been operational for a while, Willebrand would use the accumulated knowledge to create a unique customer experience from the start with its own code.

Fredrik Davéus – co-founder of Financial Analytics API developer Kidbrooke – moves even further away from the benefit of no-code technology, seeing little value in the technology. Davéus said: “I’m skeptical of low/no code solutions in general. You can only do what the platform allows you to do. Few people have training in each solution versus more general programming languages. It doesn’t take away the need for software development skills since any large project will require classical developers.”

Is no-code better for scalability?

As mentioned, there is clearly a growing interest in no-code and low-code technology. Willebrand believes this is also happening in the wealth management area, with firms seeing the technology as an easy way to start a business without needing large investments in development.

It’s no secret that businesses have been held back by legacy technology. This has often hindered companies’ ability to adapt to new solutions, and as a result, companies are often concerned with scalability. Having a solution that can scale for the future is beneficial in the long run. No-code technology, like most software, has advantages and disadvantages for scalability.

Willebrand stated that everything depends on the company’s requirements. For example, if the company launches a customer portal where a few thousand customers will log in a few times a month to monitor their portfolio, there will be no scalability issues from a performance perspective. But if a firm is releasing a day trading platform that is data-intensive and needs low latency, Willebrand believes full control over the code is essential.

From a maintenance and development perspective, Willebrand stated that no code benefits from not requiring employees to learn complicated code, especially new members.

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 the flexibility since you can only do things that are supported within the scope of the low-code solution.”

Advantages of no code

Karen Oakland, VP of industry marketing for financial services at client call 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 online forms to a guided digital interview instead, enabling a more personalized 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 a few minutes as market conditions or regulations change, all while meeting internal guidelines for security and data handling. In addition, complex documents and document packages can be generated on demand and delivered automatically via e-signature solutions to streamline customer experiences.

Oakland added, “With pre-built, validated connections 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 is also purpose-built for business users, with no need for Java or programming skills.Without filing an IT help request, analysts or other non-technical users can further control a variety of visual and branding elements—from logos and colors to typography and styling—and view them in a live preview that makes it easy to see changes immediately and in context.”

Another benefit Oakland outlined with no-code technology was increased operational efficiency due to reduced paper and manual workloads in opening, data collection, service and reporting. There is also the chance for improved data quality and elimination of Not in Good Order rates, as well as improved speed to market by quickly onboarding new investments and improving customer satisfaction and speed to revenue.

Oakland also said that no-code makes better use of resources by reducing manual workloads, and lowers IT development costs through the user-friendly interfaces.

Problems with the technology

That said, there are some challenges companies need to be aware of before diving into the world of code-free technology. Alongside flexibility issues, Davéus stated that there is a shortage of people with knowledge of these specialized solutions, compared to those with general programming language skills.

Willebrand repeated the same challenge around flexibility. When using standardized components, even if they are configurable, what can be done is limited. But not everyone needs to cross the line. “The most annoying but also true answer 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 about injection drug use and not properly evaluating solutions before engaging with non-code solutions. Willebrand said: “You have to strike a kind of balance between paralysis by analysis and jumping the gun too soon. The risk is the same with any new project that is started, and nothing particularly related to code-free solutions, other than that there may be even a little easier to jump the gun too early since the barrier to entry is lower.”

While it can be tempting to jump right in, businesses 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, “Financial platforms and systems should be purchased in the same way that companies purchase CRM systems like Salesforce or project management systems from Atlassian. It shouldn’t be a crew of consultants needed for a year to make a solution work you, it should be instantaneous and you or maybe a single consultant should be able to get things set up and running for you.”

Oakland also warned firms to be thoughtful when adopting the technology. “No code/low code applications are not a panacea for all ills,” Oakland said. She added that using many different platforms and solutions multiplies the risk of bad apps and information chaos. As a result, IT teams must have processes ready for systems management to support business agility and information security.

Oakland added: “No code solutions are not always designed to scale to meet business needs, and customers today are merciless when a system goes down.

“Not only that, but it’s important to look at interoperability and integration with your core systems. Living with data silos with legacy software on-premises is hard enough. Don’t let business users create even more silos. IT managers need to work with them to create the data connections they need, and then make sure they’re able to manage the day-to-day changes and optimizations. Also, IT needs to make sure the business keeps up with training, or the system could end up sitting on the virtual shelf.”

The future?

Looking into the future of no-code technology, Oakland concluded: “No one wants a global pandemic, but most industry experts agree that as customer behavior 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 provides 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 were 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 their desire to control and consider how low/no code solutions can actually reduce the burden on their departments and deliver value to the business in weeks, not years.”