Challenges for developers in commercial banking
Like many other industries, the banking industry has had to step up its digital transformation efforts due to the COVID-19 pandemic.
Retail banking today is a far cry from what it was just five years ago. Consumers no longer have to physically go to their bank to process payments or open new accounts. Mobile and web apps offer intuitive experiences and sophisticated functionality. Overall, retail banks and their software development teams have done a tremendous job creating tools that are an integral part of personal banking today.
However, while significant gains have been made in retail banking in recent years, the commercial banking industry is lagging behind. Despite all the innovations within the retail banking experience space, the commercial banking space is still as fragmented and “non-technical” as ever. For developers, that means they have their work cut out for them.
If you’re a developer looking to dig deeper into banking, or just starting out on commercial banking products, here are a few things to keep in mind.
Be prepared to work with outdated technology
One of the biggest challenges developers will face is that more often than not, commercial banks rely on decades of legacy infrastructure.
As banks have evolved, their IT teams, vendors, and consultants have regularly built layers above and alongside core banking systems. The problem is that in many cases these layers were designed and implemented when delegation of authentication, microservices, and event architecture were either too new or nonexistent.
Therefore, developers have to resign themselves to meeting with the banks where they are in terms of technology. For example, they might see files instead of APIs, obscure XML schemas (not to mention JSON), unexpected throttling and batch processing in addition to a general lack of more advanced tools like webhooks, events, flows and reports.
Patience is the key
While elsewhere in the computer industry speed is king, many large organizations such as commercial banks tend to operate at a much slower pace. It goes beyond simply using a “slower” methodology or a “slower” development process with longer iterations. Unlike a startup, the development process in larger organizations is part of a larger business process – and business processes in banks take a lot more time and effort and come under a lot more scrutiny. thorough. Developers should expect a slower pace and understand the need to be patient.
Embrace the unknown and experiment (responsibly)
Banking, finance and accounting are very complex and complex fields. Additionally, banks are large and complex organizations that most developers are generally unfamiliar with in their inner workings. Therefore, developers can be afraid of making mistakes and go for security over creativity. It just cannot happen. Of course, no one likes to make mistakes. However, mistakes are often a key part of innovation. Instead of leaving stunt innovation unknown, developers should seize this uncharted territory as an opportunity to experiment. Certainly, quality control steps need to be put in place to ensure that these experiences don’t wreak havoc or derail critical functionality.
Here are some good practices that each role can follow to find the right balance between experimentation and goal achievement:
- Engineering managers:
- Build a culture that encourages writing clean code followed by refactoring.
- Make sure developers understand the business and prioritize solving customer issues.
- Make sure the organization allocates sufficient capacity to meet the cost of innovation.
- Developers:
- Don’t rush to get things right on your platform.
- Move the side effects to the edges of your application and decouple them from the business logic. Additionally, strive to keep the business logic as pure as possible when it comes to functionality; for example, make sure that the same inputs produce the same outputs without creating or depending on side effects.
- Everyone:
- Use the Theory of work to be done to better understand customer needs. It takes much longer to understand how the banking industry works than it does to understand clients’ jobs and needs.
Having these beacons in place will help developers feel more comfortable driving innovation in commercial banks and allowing creativity to flourish. Understanding and embracing these challenges will allow developers to create sophisticated tools and experiences long overdue in the commercial banking space.