A sprawl of shadow IT solutions and evolving customer needs led ABN AMRO to adopt low-code as a way to deliver systems of innovation more quickly in the banking sector.

Banks around the world have seen rising demand for the digitalization of their services — a trend that became even more pronounced with the onset of COVID-19 in 2020.

ABN AMRO, the third-largest bank in the Netherlands, offers private, retail, commercial, and institutional banking services across Belgium, France, Germany, and the United Kingdom. Serving more than 3 million customers and managing €197 billion in assets, ABN AMRO was not immune to the pressure to deliver more digital touchpoints for both customers and employees.

With a workforce of 19,000 employees, ABN AMRO began to see a rise in shadow IT solutions built to meet these needs — a risk in the context of the banking sector’s high regulatory and compliance standards. In 2016, ABN AMRO reassessed its IT landscape and determined it needed a more complete development platform to deliver innovative solutions faster while maintaining a level of governance that met industry standards. After evaluating its options, the bank concluded that low-code was the answer. Since adopting the Mendix platform, ABN AMRO has delivered more than 60 low-code applications to help automate internal processes, with plans to expand into customer-facing markets in 2023.

“We are also an organization that, like every company, needs the capability to deliver software quickly.” Mark Bus / Product Owner, Rapid Application Development

Over more than 20 years, Mark Bus has held various roles at ABN AMRO, currently serving as Product Owner of the Rapid Application Development (RAD) capability. Bus sums up the situation well: “People want to be able to complete their banking transactions whenever and wherever they want. As a bank, we play an essential role in the financial system, the economy, and our society. Our regulators and customers have very high expectations of us, and that drives the choices we make around software development. We always focus on reliability, stability, and security. We are also an organization that, like every company, needs the capability to deliver software quickly.”

More Control in IT

ABN AMRO’s IT team was stuck in a familiar cycle — growing demand for solutions across the company created a massive IT backlog that couldn’t be cleared fast enough using traditional development methods. This led to the creation of hundreds of shadow IT solutions, which in turn introduced new challenges and regulatory concerns, putting even more work back on the IT team’s plate.

“If your IT department doesn’t deliver solutions for you, business users will find ways to get them on their own. That’s how we ended up with a huge portfolio of end-user-developed applications, complex Excel spreadsheets, MS Access or SharePoint solutions, and IBM Notes applications. We had hundreds of them — and we’re not alone in this situation, because there are many banks that still run mission-critical processes through Excel spreadsheets,” Bus recalls.

Inspired by Gartner’s concept of bimodal IT, Bus and his team concluded that Mode 1 — traditional development platforms powering predictable systems of record — was covered by their existing Microsoft and IBM solutions. Mode 2, however — solving new problems and delivering faster turnaround times — was a need the organization still had to address.

“The second mode was where we didn’t yet have an explicit strategy, which resulted in this enormous portfolio of shadow IT applications. We decided to fast-track our research, and it quickly became clear that low-code was the answer we were looking for,” says Bus. His team turned to Gartner and Forrester analysts, looking explicitly at the leaders in the upper-right quadrant of their latest reports, which combine quantitative and qualitative market research to identify industry trends. “We created a shortlist of low-code vendors — Betty Blocks, OutSystems, and Mendix. After going through all the details, we ended up selecting Mendix as our Mode 2 solution.”

The choice of Mendix was based on strict platform requirements, both centered on the regulatory standards enforced across the organization:

  • Flexible deployment options, allowing ABN AMRO to fully manage and deploy applications on Mendix Public Cloud as well as in any on-premises or private hosting environment. “As a bank, we were looking for an option where we could deploy low-code applications on our own fully managed infrastructure. At the time, Mendix was the only low-code provider that supported such a broad range of deployment options,” Bus said.
  • Guardrails for controlled development, since ABN AMRO must adhere to an internal risk control framework.

“With Mendix, we were able to set up guardrails that let teams across the organization build applications quickly, but within the boundaries of our organization’s information risk policies.”

Read more about how Mendix can enable digital transformation in the financial sector!

Driving Agile Automation

Adopting Mendix in 2017 naturally allowed ABN AMRO to start working in an agile way with smaller, leaner teams. Over five years, ABN AMRO has scaled up to 16 teams working in Mendix, delivering 61 low-code applications at various stages of production. These applications support nearly every facet of the business, including ABN AMRO’s customer management, risk, human resources, finance, operations, and facilities departments.

As a company operating with a bimodal strategy, Mendix is not the only development language available to ABN AMRO. What Bus and his team have built over the past five years is a clear framework for what suits a low-code application versus what is better served by a high-code programming language. “What we do now is focus on matching the right use cases with the right development means,” says Bus. “For example, we created a positioning document where we defined a set of standards that help identify when to use Mendix, high-code development, robotic process automation, or business process management solutions. That essentially determines which of these means a given use case falls into.”

Some of ABN AMRO’s most impactful and popular Mendix solutions over the years include:

  • A suite of workflow automation tools to support employees in preventing and detecting financial crime. Although ABN AMRO has built an IT ecosystem that prioritizes automated monitoring of customers and transactions, many processes in this space still involve human interaction. Even today, 20% of ABN AMRO’s employees play a role in financial crime detection. To provide automation wherever possible, the team delivered several Mendix applications supporting data aggregation, case assignment, and status tracking throughout the detection process.
  • ‘Thumbs Up’, a Mendix application that lets ABN AMRO employees recognize their colleagues in a fun, easy way. During ABN AMRO’s 2020-2021 collective labor agreement negotiations, the company placed an emphasis on employee recognition as part of the organization’s culture. The “Thumbs Up” app allows employees to select a small gift for a colleague, shipped directly to their home address along with a personalized card. In the first six months after go-live, roughly 8,000 “Thumbs Ups” were sent.

Developing with Speed and Control

As early adopters in the low-code market, Bus and his team have realized significant resource savings since launch, along with a stronger relationship with their business partners. Working in an agile way, combined with the speed of low-code, has made ABN AMRO’s culture more change-ready. Smaller, empowered teams can proactively tackle business challenges, with the freedom to experiment and test new solutions without wasting time that could be invested in serving their customers.

“Our organization has adopted agile SCRUM as our way of working, which means we’ve moved away from the traditional process of having to present a business case, secure resources, and then start development,” says Bus. “We have teams with pre-approved budgets in our organization and product owners who are essentially tasked with creating as much value as possible with the teams available to them.”

“I think the biggest value we’ve recognized is that you can develop much faster on a low-code platform. Not only is the way of working faster, but we typically have one or two developers working on a low-code application. If you compare that to traditional full-stack development, where we have teams of five to nine developers, Mendix is much faster and requires far fewer resources.”

Beyond that, the collaborative nature of Mendix provides a common language for business colleagues and engineers to understand requirements, share progress, and give feedback.

“Mendix is a visual tool, so if I build something following Mendix best practices, it will be easily recognized by anyone else with Mendix experience. It’s very easy to just look at the screen and understand what the developer was trying to achieve, which is a significant contrast with high-code programming,” says Bus. “Mendix has a feature to annotate your microflows, for example, so you can explain the purpose behind why you built that particular feature — and that’s something we do on every project.”

Lessons from an Early Adopter

Now with five years of experience using Mendix, Bus and the IT team also have lessons to share with other companies interested in adopting a low-code platform, such as:

  • Don’t hesitate to bring in an implementation partner. Bus explains that his team didn’t start with a specialized partner and, in hindsight, should have done things differently. “Mendix is low-code, it’s much faster, but it’s still software development. You still need skills in your organization to be able to build low-code applications, and you can start building much faster if you begin with a partner that has those skills in-house and a mature practice.”
  • Follow best practices when identifying your first project. The ideal initial project is often a high-visibility, high-value application of low to moderate complexity. Bus shares this lesson from his team’s experience: “The industry has a saying about not throwing away your old shoes before you have new shoes on your feet. That’s also the case when you’re replacing legacy applications. It can be a months-long journey to get to the first MVP — which really doesn’t feel like rapid application development. That slowed us down a bit at the start, but in 2019 we shifted our focus to internal automation and really started to gain traction.”

Scaling to Improve the Customer Experience

With a portfolio of 60 applications and guardrails to guide them as they scale, ABN AMRO looks forward to tackling its next challenge with customer-focused low-code solutions. Bus soon expects to use Mendix to optimize touchpoints across the entire customer journey, improving the experience to increase sales conversions.

“We’re positioning Mendix as a solution that will sit in our digital e-commerce channels,” says Bus. “We have sales experts and e-commerce specialists analyzing data, web analytics, and user clicks to see how quickly customers move through our sales funnel. They’re using that data to continuously improve the forms and templates we offer customers in our digital channels, and I think that dynamic world is the perfect match for low-code.”

“Banks need to become digital. New institutions and FinTech companies that don’t have to worry about legacy IT would be more than happy to take the place of traditional banks. Software is taking over the world. Today, ABN AMRO can meet the demand for digitalization while being extremely careful not to compromise the accountability, stability, and security of our systems,” Bus concludes.

Read the original version of this article at: https://www.mendix.com/customer-stories/enabling-bimodal-it-in-banking-with-abn-amro/#more-control-in-it

Source: Mendix.com