Partner Article

Four Ways Financial Institutions Find Value in Agile

Financial services institutions face daunting challenges in this increasingly competitive, technology-driven, and globally connected market. They have to manage complex data and delivery platforms, prove compliance with government regulations, meet high customer expectations with low risk, and sustain revenue growth despite growing competition and thinning margins.

Transforming their application and portfolio management to more modern approaches has been unappealing or infeasible for companies burdened by legacy systems or a reliance on waterfall approaches, like cost analysis and big upfront planning. But the demands of a dynamic market have changed the calculus for companies in financial services. According to The Forrester Wave™: Global Banking Platforms, Q4 2012 report,

…the majority of financial services firms, and banks in particular, are either working on modernizing their application landscape or planning to do so within the next few years.“

The Forrester report identifies four requirements for financial services firms considering transformation. Let’s take a look at these requirements in the context of Agile development approaches and identify the value to companies of going Agile.

1. Comply With Growing Regulatory Requirements

Regulatory requirements are now a globalized pain point: businesses in countries around the world are required not only to adhere to multiple sets of rules, but prove their adherence through detailed documentation. These heavy regulations require increased monitoring, transparency, and traceability, which is time-intensive and, accordingly, expensive.

Many waterfall approaches to management only pile on the burden with yet more requirements documentation. Agile, with its baked-in approach to tracking, can actually help support compliance requirements. For example, Rally’s Application Lifecycle Management (ALM) platform can be used to create specific business requirement documents and can produce a BRD-type report for audits. Twenty of the largest finance companies use Rally, and as auditors become more familiar with Agile processes, Agile-driven reporting will become even clearer.

2. Enhance Customer Experiences

Financial services have become much more consumerized, and companies now have to compete in an environment where the customer experience is a key differentiator. Frequent online transactions and tech-savvy clientele are driving demand for companies to create innovative tools and experiences. As Graham Edmeads, Product Development Manager at MYOB, puts it, “Movement to an online organization—delivering ‘live’ and frequently—has not only shifted the market and customer expectations; it has shifted the culture of our organization.”

Fortunately, customer feedback is an inherent part of the Agile lifecycle. Agile gives financial services firms the ability to quickly and effectively integrate feedback into a range of business processes, from enhancing online banking interactions to improving customer response times.

3. Increase Business Agility

“Disruption” is a term more frequently associated with startups than with financial services firms. But with startups and other non-regulated companies making a tech play for market share in this sector, financial services institutions can no longer afford to stick with a traditional approach.

The Agile approach is flexible, responsive, and adaptable to changing markets and new innovations. Going Agile not only enables companies to react quickly, with more efficient and targeted outcomes, it provides executives with the data they need to make leadership decisions.

4. Improve Cost Management and Efficiency

Technology is crucial in banking, where “low-latency execution” equates every nanosecond to millions of dollars in profits or lost opportunities. Yet IT isn’t always aligned with strategy: business units often have to compete internally for funding, projects are over- or under-staffed, and communication breakdowns cause redundancies or dropped balls.

What if you could harness technology to identify and improve the most critical projects? Agile helps companies build the right things, and build things right. Rally’s platform can track and prioritize work according to its value—building trust between business units so you can fund the projects that really count—and coordinate efficient delivery of products and services, even across distributed teams.

Execute a Successful Transformation

The traditional culture of banking has tolerated competitive, siloed business units and a snail’s pace of change. Yet The Forrester Wave™ report stresses that “banking platform transformation is crucial for business success.” So how do financial services institutions undertake transformation initiatives?

Rally can guide companies in successfully implementing Agile approaches, with impacts that improve not only business outcomes but business culture. Erik Holland, Manager, Business Analysts atHoover’s, says:

“I think the biggest benefit of adopting Rally has been the teamwork. We have people from very different teams—QA, Development, User Interface and Business Analysts—all working together to solve problems. We have really burned down the walls between groups…and the result is that we are building the right things, the first time around.”

This was posted in Bdaily's Members' News section by Rally Software .