Insight by Appian

How low-code can help financial regulators adapt to rapidly increasing complexity

In cases of an economic crisis, regulatory and oversight bodies must move just as quickly to respond to stimulus programs and the demands of a volatile market.

This content is provided by Appian.

Government agencies have to respond rapidly in a crisis. Most of the time, that involves rapidly deploying military or first responders, along with essential supplies and communications infrastructure, to the site of a disaster. But in cases of an economic crisis, like the one instigated by the coronavirus pandemic, financial service providers, regulatory and oversight bodies must move just as quickly to respond to stimulus programs and the demands of a volatile market. But even outside of crises, the pace of change for these organizations has accelerated significantly.

That’s why they need a new paradigm for how they provide their services.

“The old model of building very large, cumbersome, legacy platforms in-house on a mainframe, a client-server based application, etc. doesn’t work anymore because those things take a lot of maintenance, they take a long time to change,” said Kyle Thomas, vice president for SES Business Services at the Conference of State Bank Supervisors.

One of the major challenges these government financial regulatory agencies face is that the work is increasing, but the workforce fielded to meet those challenges is not increasing. If an agency can’t expand its workforce to meet either the volume or the complexity that the work currently demands, then they need to employ new tools to get the job done.

“I’ve always said that government programs don’t get less complicated,” said Jason Adolf, industry vice president for the public sector at Appian. “So what we’re looking at and addressing at Appian is how do we use low-code automation to offload what we would consider routine tasks that a bot or an artificial intelligence app could potentially process? By doing that, it allows the human workforce to do the far higher value work that they’re really required to do.”

And the answer Appian has come up with is low-code automation. Low-code is a commercial-off-the-shelf approach to building fit-for-purpose applications. It provides the best of both worlds between COTS and custom built applications. It provides the ease of COTS solutions that are constantly being upgraded with new features, enhancements, and technology. But you can build applications around your unique business processes, instead of having to conform to a COTS vendor’s specifications.

It’s also a design environment where everyone can contribute. Low-code means just that: the amount of coding required is low. So application users and business process owners can be involved directly in the development process with a minimal amount of training, reskilling or specialization. That, in turn, facilitates agile development.

“We knew roughly what we needed to create and how it was going to fit into the business process of our members, 63 different state and local regulatory agencies, but we didn’t have all the answers. So we set up a working group,” Thomas said. “And in the development process, which was less than 18 months from start to finish, we would regularly engage with that working group with a demo or with a discussion. And instead of in the previous development efforts, where we were showing them a lot of wireframes, and even mock ups or static screens, in this low-code environment, we were able to take to that working group direct changes to the system or new functionality based on a conversation that happened just a week ago.”

That’s a rapid pace for idea to delivery of a government application, which couldn’t have been accomplished without low-code, Thomas said. And the regular feedback on ideas and requests helped build confidence in the working group.

But low-code isn’t just an application development platform. The COTS nature of the platform makes it more interoperable with other organizations using the same processes. And that’s becoming more and more important as both private sector financial services and the number of government regulators overseeing them multiply.

Most government regulators already have information sharing agreements among themselves, which saves time, money and manpower. But the problem, historically, has been getting their legacy systems, mostly custom built in-house, to talk to one another.

And financial regulators can use this platform to perform all kinds of oversight: investigations, examinations, supervisory work, audits of both institutions and financial transactions. It can even be applied to such specific processes as performing anti-money laundering compliance.

“What’s interesting for us, and we see this more and more in our Appian customers, is that we are used by both regulators and the organizations being regulated,” Adolf said. “So there are instances where an organization might be using Appian to submit a regulatory filing or document that gets ingested by a government agency using Appian to adjudicate that regulatory submission or filing, which is a very cool nexus of the commercial world and the public sector.”

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