Five Reasons Why Banks Should Adopt Agile Product Development

Many people believe that Agile methodology only involves technical practices that the IT sector can use to develop products – this is far from the truth. Agile is effective in various fields, including fintech and banking. Moreover, since a significant portion of Agile practices (about two-thirds) isn't focused on technology, they can be used in different departments like HR, finance, procurement, and IT.

Banks have a significant edge due to their extensive, raw, and individualized customer data. For instance, using advanced analytics, the Agile methodology allows for the quick and adaptable creation of apps that employ this data to enhance customer experience. This approach helps interact with customers and provides them with more inventive products.  This blog explains in detail the importance of Agile in banking and how it can revolutionize the entire industry.

Why Agile Matters in the Banking Sector?

Agility holds great importance in the banking industry for several reasons. It helps tackle complex banking challenges, helps get customer input, and ensures consistent quality checks. Moreover, agility in banking is vital to offer personalized, real-time experiences that today's customers anticipate from service providers.

However, before we move forward, it's crucial to remember that there are three fundamental practices common to all organizations, including banks – 

• Leadership involves forming teams with diverse skills, efficiently assigning tasks, and maximizing productivity.
• Collaboration: Collaboration practices include effective team communication and communicating goals to each team.
• Delivery includes timely and continuous product delivery, integrating feedback into new products, and more.

By following these common practices, banks can effectively enhance their performance, efficiency, and overall outcomes. This is the exact place where the Agile approach comes in handy. All these objectives can be achieved on time by applying Agile practices in banks. Agile methodologies are evident, as some of the biggest banks, like JPMorgan & Chase, are adopting Agile to enhance the digital experience.

This product development method also authorizes banks to develop and enhance customer-centric products and services consistently. Which in turn enhances customer experience and increases retention rates.

5 Compelling Reasons Why Banks Should Adopt Agile Product Development

1. Improves Teamwork 

The Agile methodology mirrors the culture of startups by requiring multiple Scrum Teams to collaborate in building a product. This approach creates a space for creative ideas to be cultivated among team members as they collaborate across different functions, often gaining valuable insights from each other. 

Fintech companies that have adopted the Agile approach to development have established specialized teams for innovative solutions, product growth, research, and more. These teams collaborate to create new and inventive solutions, delivering products faster to the market. This enables teams that might not typically collaborate seamlessly producing unified, comprehensive solutions while introducing fresh perspectives to product and software development.

2. Helps Enhance User Experience 

Agile plays a pivotal role in promoting the Transformation of the banking sector regarding customer-centricity. The principles of agility enable collaborative efforts with customers in co-designing products and services. 

Moreover, applying Agile project management within banking simplifies the collection of consistent customer feedback – both before and after introducing any product or service. This ongoing feedback collection will undeniably contribute to businesses becoming more adaptable and focused on the needs of customers rather than assumptions.

3. Streamlining Effective Problem-Solving 

The primary benefit that banks will derive from adopting Agile practices is the capacity to efficiently tackle critical issues within the customer journey, focusing on intricate details. Agile methodologies prioritize step-by-step and repetitive product development, enabling prompt integration of user feedback and enhancements.

Accordingly, each cycle permits the identification and rectification of product flaws, leading to continuous improvement. These benefits extend beyond products to the banking procedures themselves. Various teams can collaborate more seamlessly and consistently, refining processes based on feedback.

4. Accelerating Innovation 

When you adopt an Agile product development framework, it often accelerates innovation by consistently working on products. It can even lead to a more fresh and practical solution that directly aligns with customer’s preferences and demands. 

Take, for example, the rise of online payments through mobile apps. People nowadays do almost all the transactions through a smartphone, limiting bank visits. Both fintech companies and traditional banks that provide customized mobile banking services related to this evolving digital banking pattern are the ones that benefit the most.

5. Better Clarity and Efficiency

Another reason for adopting Agile in banking is the scope of improved transparency throughout production. Everyone involved in the project should know all the important details, and important information shouldn't be kept secret. 

Having clarity and being responsible will not only help banks work better and gain trust, but it will also assist them in keeping public support, protecting their freedom, and making policies more effective.

Conclusion

Nowadays, when innovation and flexibility are crucial, the banking industry can greatly benefit from adopting Agile product development methods. The strength of Agile lies in its capacity to promote teamwork, improve customer interactions, simplify processes, speed up innovation, and promote transparency.

Reference 

1. https://www.invensislearning.com/blog/agile-is-essential-for-banking/ 
2. https://www.penser.co.uk/business/five-reasons-why-banks-should-adopt-agile-product-development/