EXCLUSIVE: “Low and Behold!” – Elmar Handke, UBS and Nihit Ahuja, Volante Technologies in ‘The Fintech Magazine’

Low/no-code solutions are increasingly seen as a potential answer to IT prayers in all manner of business environments. Could ISO 20022 represent a defining moment for its adoption in finance? Elmar Handke of UBS and Nihit Ahuja from Volante Technologies think so.

The challenges banks face in transitioning from old and cumbersome legacy systems to the kinds of adaptable IT solutions needed to meet the demands of today’s customers and operating environment is not, as they say, ‘new news’.

There is growing evidence that the world’s major institutions are waking up to the increasing urgency surrounding this agenda, including the most recent Lloyds Bank Financial Institutions Sentiment Survey, which points to an overall increase in technology investment, to 77 per cent in 2021, compared to 62 per cent the previous year – and all focussed on developing new products and services, improving customer experience and responding to ever-more-complex regulatory requirements.

Now, it appears that a further catalyst for change could be coming from the imminent migration by key payment infrastructures to the ISO 20022 payment messaging standard. Or, more precisely, according to Elmar Handke, project manager for UBS bank, from the realisation by some institutions that the only way they will meet deadlines imposed in multiple markets for such a change, is by adopting low/no-code programming solutions – characterised by drag-and drop tools, pre-packaged code and reusable components.

Nihit Ahuja from Volante Technologies, which partnered UBS on its low/no-code journey, also believes such an approach is the best and, for some, the only way they’ll make it in time, given that the implementation deadline for a switchover in the US, Europe and the UK – and globally for any institution plugged into SWIFT – looms in November 2022. This is because these plug-and-play offerings have the potential to supercharge time to market, without the need to carry the additional overhead of specialist in-house developers and programmers – if businesses can even recruit them.

Quite apart from the skills shortage, the revenue challenges banks also face in an increasingly competitive and commoditised financial services marketplace, placed under additional pressure by the pandemic-related rise in high-volume, low-value payment transactions, makes low/no code an attractive, cost-efficient option. Low- and no-code have been seen by many industries as a way of releasing the IT logjam caused by a customer swing towards digital.

A survey of IT decision-makers by customer relationship management platform specialist Salesforce, carried out in May 2021, gives some idea of the scale of the challenge. Eighty-eight per cent said they’d seen their workloads increase over the previous 12 months, while 96 per cent said the demand they were experiencing for apps was not sustainable using traditional coding. As a result, more than 90 per cent had turned to low-code tools that general team members could use with appropriate training. In response, over the last 18 months, Salesforce has created a mind-boggling 1.4 million low-code apps. Among the list of major financial institutions adopting an app-based approach, according to the report, are RBC Wealth Management, Academy Bank and Brazil’s Banco Bradesco, for functions ranging from digitising account opening and loan application processes, to streamlining wealth management, trading and compliance services.

Nihit Ahuja looks after Volante’s global financial messaging low and no-code platform offering, and has seen the same sudden shift in operating requirements. Volante was one of the first providers to offer companies a way of accelerating the software development lifecycle by enabling them to build solutions quickly without deep technical knowledge. When it comes to ISO 20022, he believes payment providers have three options.

“One is to do open-heart surgery and bring in a shiny, new payments engine that solves the problem. The second is to build in some sort of business application that takes care of the challenges. The third is to enhance your existing system, ready for ISO 20022 adoption,” explains Ahuja. “Volante provides all these solutions, but the low/no-code platform offers an accelerated approach. It enables organisations to adopt the new standards quickly and gives them the flexibility to create tailored experiences.

“ISO 20022 is all about leveraging data to make it meaningful for customers. Our platform offers that in a tailored way, with acceleration capability.”

For UBS, ISO 20022, while it focusses industry minds, is just the tip of a transformation iceberg. It commenced its IT evolution almost a decade ago, leaving it in a relatively strong position today. Handke explains: “We’re not completely new to data conversion; that was part of the message broker platform, which, at UBS, is a legacy application with about 20 years on its charter. The data converter was giving us maintenance issues and, about nine years back, we were looking at opportunities to modernise our architecture. We stumbled across Volante’s graphical developer interface platform and code generator for specifying data conversions. The deciding factor was that it was extremely flexible and could generate output for multiple different platforms and runtime environments – Java, virtual machines and standalone programs.

“With Volante’s technicians, we built a framework to integrate this generated code into our existing applications, ripped out the old converter solution, slotted in the converted code and started to grow from there,” he says. “Initially, we were purely mainframe-based, still running on heavy irons, z/OS mainframes, due to the scalability. To our surprise, even with Volante’s development workbench being a 4G implementation tool, it was very easy to integrate the output from it into our mainframe. From there, we went into the hybrid space and now have solutions for decentralised platforms, too.

“Volante’s second big strength is providing libraries for different market standards, be they SWIFT FIN messages, Fed and CHIPS messages, or Swiss-specific SIC messages. That helps, even if you still need to define your data conversions,” continues Handke. “We went back to Volante for the ISO 20022 migration challenge, because time was short and we needed something to convert those messages. In this case, it’s a SWIFT MX to a SWIFT FIN message. What Volante gave us was on top of our existing market library – with really no code.”

Answering the Call

Volante intends to further invest and develop its offering over the next five years. In January, it announced a partnership with banking-as-a-service platform and low-code champion Mambu, which will see its low-code technology made
available to financial institutions through the Mambu Payments Hub. It promises to give processors the power to modernise their payment systems and ‘deploy the elements needed to deliver an exceptional 24/7 experience to their customers’ within a matter of hours.

Ahuja adds: “We are aligning our business to the challenges customers are facing. The scale of change is huge – it’s not just one market, or two markets – so, our focus has been standardising the way we do it, rather than doing it per payments scheme, or per requirement that’s changing.

“Now we’re looking at how we can make it easier to use our development platform to do the job. Because, now we’ve standardised it, we don’t want there to be a lot of effort around using the data or embedding things.
“As there is a huge quantum of work, we’re also looking at creating a stronger partner ecosystem to offer more value-added services for clients wanting to create a more tailored proposition or a unique experience. Then, we want to leverage artificial intelligence and machine learning.

“Automation is in our DNA but we now want to take it to a different level and make it easier to get the job done.”

ISO 20022 is just one aspect of the multiple challenges facing financial services, including new regulations, increasing customer expectations and the need to operate in a global and diverse marketplace, adds Handke.

“Being globally exposed, UBS works under different legal restrictions from the various regulatory authorities, so our challenge has been turning around the payment business to operate 90 per cent differently from the way it did 20 years ago.

“A lot of companies have had to look into their operational processes and the way their payment, accounting, client reporting and reconciliation applications work. Probably, as in our case, some of these applications are fairly old, so they run fine day-to-day, but it’s possible that there’s code out there that they have to put on their Indiana Jones hats and dive into, because the people that originally defined the business rules around these applications are no longer there,” he says.

As with most things, there is a counter to the growing argument for low-code; sceptics say that while it does indeed offer quick fixes to urgent needs such as product development, customer information management and financial crime management, it perhaps should not be viewed as a silver bullet. Some would argue banks need to ensure that, by firefighting today, they don’t add further complexities to already-patchworked legacy infrastructures, which will then need undoing tomorrow.

Whether low-code can stave off the need for front-to-back, bespoke legacy upgrades in the long term is the subject of ongoing debate. Notwithstanding that, the argument put forward by UBS and its own low-code implementation partner Volante, is a persuasive one. At least for now.

This article was published in The Fintech Magazine #23, Page 49-50