How low-code platforms with AI are revolutionising financial services?

The financial services sector is experiencing a significant transformation driven by technological advancements, evolving customer expectations, regulatory demands, and the pursuit of operational efficiencies.  

The growing complexity of client requirements and expectations has rendered traditional software development paradigms obsolete. We are fast approaching a tipping point where the combination of low-code/no-code interfaces and AI integration are beginning to accelerate. 

In Gartner's research, the forecast is that 70% of applications will use low-code/no-code technologies in 2025, up from 25% in 2020. The chart showed a remarkable increase in a few months. Such platforms enable users to design applications without requiring any programming knowledge, through a point-and-click interface. 

The potential for financial institutions to advance and maximize operational efficiency becomes unparalleled when AI functionalities are incorporated into these platforms.

Combining low-code platforms and AI
With low-code platforms, the process of application development has become quite simple. Low-code platforms enable business users, called “citizen developers”, to develop solutions in collaboration with the IT department at an accelerated rate. This visual approach greatly minimizes development time and AI enhances these platforms significantly. 

In 2024, the global AI in finance market was valued at USD 38.36 billion, and is projected to reach USD 190.33 billion by 2030, with a remarkable CAGR of 30.6%. AI algorithms integrated into low-code applications automate processes, extract insights, personalize interactions, and apply intelligent predictions. 

There is now an accessible framework provided by low-code/no-code platforms to deploy sophisticated AI tools. This remarkable combination accelerates digital initiatives such as automated underwriting or intelligent customer support, all built with speed, flexibility, and agility.

Accelerating innovation and time-to-market
Another key impact includes the most significant effect, time-to-market. In the present scenario, low-code platforms are reported to greatly speed up software development processes, achieving acceleration rates nearly 10 times faster than traditional methods. 

In fact, one survey suggests that close to 60% of respondents accepted the fact that low-code development was at least 40% faster than using traditional approaches for software development. This allows financial institutions to respond in a timely manner to changes in the market, introduce new products such as digital payment offerings, and experiment far more freely than ever.

Increasing operational efficiency and automating workflows
Manual processes remain a major challenge for banking institutions. Generative AI-powered automation is set to add financial institutions the utmost value. As per the projections made by McKinsey, the value generative AI can add to the global banking sector, mostly due to productivity, stands between $200 billion and $340 billion. 

In addition, a survey conducted by Nvidia in 2024 stated that more than 70% of financial institutions using AI reported an improvement in operational efficiency, with 60% noting up to a 30% reduction in operational costs. 

The same findings were reported by Bain, which stated that there is an observed 20% productivity gain on average from the use of generative AI. The benefits enjoyed by users of low-code/no-code platforms include 44% increased efficiency and over 36% of users reporting a notable reduction in costs. 

With the advantage of automation, skilled employees are increasingly freeing previously tokenized work, which leads to a more effective allocation of resources.

Bolstering compliance and risk management
Monitoring low-code/no-code-enabled artificial intelligence reduces the burden of maintaining ever-changing financial regulations. Integrated into low-code systems, AI offers remarkable opportunities. 

Algorithms have the capacity to supervise transactions perpetually to detect fraudulent activities, help in automating and modernizing reporting, assist in risk evaluation and analyze massive amounts of data. 

While emerging data might highlight the extent of compliance automation through low-code/no-code platforms, the overall organizational productivity improvements and AI’s analytical prowess justify the need for effective compliance-driven oversight. 

This enables organizations to manage risks proactively, utilizing automation AI, thus evading fines while building trust.

In conclusion, the integration of low-code platforms with AI can be considered a definite game changer for the financial services sector. It allows institutions to operate more efficiently with reported cost savings alongside productivity boosts, optimize customer experience, mitigate risk, and improve overall operational management. 

With the market growth reaching new highs and the adoption rate skyrocketing, this combination of technology is fundamentally aiding innovation and the advancement of the financial services sector.

-- Lalit Mehta, Co-Founder and CEO, Decimal.