Since the inception of the agile software development methodology in 2001, it has been adopted by organizations to be leaner and quicker to market. While agile is commonly discussed in concept, actually implementing it as a methodology through all cycles of software development (initiation, planning, development, and delivery) has been a challenge, especially for large financial institutions.
During the last two months, COVID-19 has brought the world to a standstill. During that time, the focus of banks has primarily been on staying aligned with ongoing government mandates and maintaining business as usual. However, financial institutions have yet to show their ability to pivot in developing and implementing more innovative tools for proactive customer support quickly. Early on in the pandemic, the World Health Organization stressed the importance of speed: “One of the great things in emergency response… if you need to be right before you move, you will never win. Perfection is the enemy of the good when it comes to emergency management. Speed trumps perfection.”
As mentioned above, FIs have historically struggled to implement agile, or even adopt its principles, and have attributed more importance to “getting things right” than doing them quickly. The effects of the pandemic have only exacerbated this ongoing struggle: lack of agility results in an inability to pivot plans and deliver quickly, especially in times of crisis.
In contrast to the banks’ lack of agility, the foodservice industry was quick to pivot with the pandemic outbreak, focusing on finding new products and tools to support their customers. Restaurant chains such as Freshii, St Louis Bar and Grill and Jack Astors, for example, have moved from a traditional restaurant business model to offering delivery for not just prepared food, but groceries as well. This would have likely included software updates to allow customers to select these products and pay online, but also changes in supply chains, packaging, etc. If other – arguably less digitally savvy – industries have been able to pivot so quickly, why do banks seem to be lagging behind?
Banks are heavily regulated bodies and, at their core, are not designed for a quick response. At a traditional financial institution, cumbersome processes and matrix/hierarchical organizational structures hamper their ability to adapt fast. When they need to take quick action, they tend to stand in their own way; whether it be ineffective decision-making processes, debating who owns the customer/experience, or executing across business lines.
Financial institutions must bear in mind the following to benefit from the agile methodology:
1) The implementation of agile must account for an organization-wide planning and initiation process. This will not only avoid slow decision-making and disagreement over ownership, but it will also ensure that any solutions built help accommodate the customer relationship as much as possible, and prevent duplication of efforts should the teams try to implement similar solutions.
2) Embrace the notion that fast is better than perfect. agile enables continual improvement, so it’s better to get a solution out the door and continue to build upon it, as opposed to trying to build the perfect solution upfront.
Without developing an organization-wide agile approach for initiating and planning new offerings, that is flexible enough to pivot and support continual improvement, banks will continue to struggle to respond quickly in the face of crises like COVID-19.
While it has presented many challenges, COVID-19 has presented a unique opportunity for financial institutions to re-think how they manage their clients and their workforce. This crisis has shed light on a new reality where traditional methods and approaches do not work as effectively as they have previously. Now is the time for industries to take chances and deliver innovative tools that are not only critical during the near-term, but could go on to have longer-term implications and benefits.
Financial services are at the forefront of this opportunity. If all the talk about disruption is anything to go by, being the first at something can sometimes be equally as important as being the best. Execution will tell over time as we look back on our collective response to COVID-19.
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