Think Agile Is Only for Tech Companies? Think Again.

To keep up with the accelerating pace of change, a growing number of companies in the banking industry are using Agile, the project management philosophy, to transform their organizations. While major global banks began using this approach years ago, typically to manage digital transformation efforts, regional banks and even community banks are increasingly seeing the benefit. Sometimes enthusiasm spreads well beyond the technology department too.

Most people associate Agile project management with software development. But a growing number of financial institutions are reporting significant success with it in their digital transformation efforts and beyond. Even bank marketers use it now to adapt and improve marketing campaigns and brand recognition. One report suggests that the adoption rate of Agile for areas of the business outside of technology doubled from 2020 to 2021.

The nation’s largest banks have used Agile for years in transforming how they implement technology projects. In January, JPMorgan Chase began publishing a blog called “What’s Next at Chase,” which covers a wide spectrum of technology, data and innovation projects. All of the projects discussed in the blog relate in some way to Chase achieving its overarching goal: “transforming into a product-centric agile organization.”

But with customers, data and products shifting constantly, how is it possible to ensure a multiyear transformation project delivers viable results in the end? To pursue innovation, banks must “build a culture that is invested in working in an agile way,” Chad Ballard, head of global banking platform tech in the consumer and community banking division, told MIT Technology Review in a March podcast. “We want to have an organization that designs, delivers and operates in an incremental way.”

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Agile as Change Method to Fuel Banking Innovation

Agile project management allows teams to change course quickly as the situation dictates.

When a company sets out to create a software solution, for example, rarely does the problem, or the team’s understanding of that problem, remain the same. Agile is a set of principles teams use to navigate to success regardless of changes along the way, whether in the team, industry, company, opportunity or all of the above.

The Agile approach has been around for a long time, though the banking industry has been relatively slow in adopting it. Frameworks like Scrum or XP have been developed along the way to give companies a clearer understanding of how to apply it. But experts like Alistair Cockburn, author of the “Agile Manifesto,” say Agile’s 12 principals are what matter most when it comes to developing technology.

During the past 10 years, as the pursuit of transformation across business lines, from product development to customer experience, gained momentum in the banking industry, more companies began talking about Agile. While global banking companies were the first, regional banks and, increasingly, even some community banks have come around.

The Agile Principles

1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and developers must work together daily throughout the project.

5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.

6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

7. Working software is the primary measure of progress.

8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.

9. Continuous attention to technical excellence and good design enhances agility.

10. Simplicity – the art of maximizing the amount of work not done – is essential.

11. The best architectures, requirements, and designs emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Source: Alistair Cockburn

Provident Bancorp in Amesbury, Mass., was among the early adopters in the industry. The community bank began applying the Agile philosophy to develop a culture and tools that facilitated collaboration back in 2014.

“We’re trying to offer products and services that are not commodities, where we can differentiate ourselves, add value and get paid for it,” the then-chief executive David Mansfield told BankDirector.

It was around the same time that Barclays adopted the Agile philosophy in all areas of the business— “HR, auditing, security, compliance, the investment bank, the retail bank – everything,” said Jonathan Smart, who at the time was the U.K. bank’s head of development services and now consults with companies on how to operate with more agility.

Smart described Barclays’ embrace of Agile as a response to pressure to innovate at scale to fend off competitive threats such as mobile-only banks and tech giants like Apple and Google.

Case studies gathered by Agile Sherpas shows M&T Bank, Santander Bank, HSBC, Aussie Bank, and ING all have reported transformation success stories from adopting the Agile philosophy. Santander and HSBC used it to transform their marketing efforts.

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Every Area of Banking Is Touched by Technology These Days

Marketing efforts tend to have monthslong or yearlong terms, but Santander wanted to tweak the content of its campaigns on a much shorter timescale.

“We use Agile a lot for our IT,” said Keith Moor, who was Santander’s chief marketing officer in the United Kingdom when the initiative began in 2016. “We want to take the principles of Agile and turn them into a small ‘a’ and be agile in marketing.”

Moor told Marketing Week that his team would monitor the results of their ads daily and update their approach the following week based on those results. “The industry has, unfortunately, been constructed around things like long booking deadlines or production cycles and that is what we want to change,” he said.

The marketing team used the strategy for the first time with a campaign in London to promote its Santander Cycles sponsorship. The campaign encouraged people to rent bicycles for all sorts of activities beyond just commuting. It helped achieve a record-breaking 10.3 million bike rentals in 2016. Moor told The Drum that the Agile approach was paying off in its 2017 campaign as well.

“We want to take the principles of Agile and turn them into a small ‘a’ and be agile in marketing.”
— Keith Moor

Provident, the parent company of BankProv, had adopted lean management, or the just-in-time system, prior to the Agile philosophy. Lean was developed by Toyota to eliminate waste and improve efficiency. Like Agile, it encourages focusing on continual, incremental improvement.

The management and staff of Provident and its BankProv unit were already familiar with the culture of meeting regularly to establish daily objectives. The staff met daily for 15-minute huddles and, as part of the discussion, would share information on key projects and identify opportunities to eliminate waste.

Then, after hiring a new senior information officer from Intuit in 2019 to work in BankProv, the company began incorporating Agile. The two approaches work well together, Mansfield said.

“We’re trying to do some different things, really leverage technology,” he said at the time, “where we can differentiate ourselves, add value and get paid for it.” BankProv provides banking as a service to niche markets, including renewable energy and assorted fintechs.

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The Basics of the Agile Philosophy and Where to Start

In a highly competitive environment with a lot of flux like banking, the Agile philosophy can help teams with developing a viable product even as requirements change along the way. One common tactic is to break projects down into shorter iterations or “sprint windows,” with several teams focused on their own software segment to reduce the time to market.

Regions Bank, which began adopting Agile more than six years ago, has seen tech-related projects completed in a fraction of the time they used to take, Wayne Butler, vice president, business systems, told The Financial Brand.

“We live in a fast-paced world,” Butler said. “Banks are adopting Agile so that they can adapt quickly as well.”

Unlike the old waterfall project management method where projects would take months, “the same projects take weeks with Agile,” he said. When working to add new functionality, “we can deliver the base code in two weeks. Within four weeks, we’re building out the new functionality. By six weeks, people — internally and/or externally — are using it.”

Strategic initiatives should be broken down into smaller milestones, or Agile epics, delivered in shorter increments. For example, a bank might separate a three-year initiative into a series of six- to nine-month “sub-initiatives” and then even smaller subsets. Once teams have manageable work items, each focuses on a particular segment or “user story.”

“We live in a fast-paced world. Banks are adopting Agile so that they can adapt quickly as well.”

— Wayne Butler, Regions Bank

This approach can make it easier for teams to grasp the end game and stay on track. It can also enhance risk management while keeping development customer-centric, a hard balance for such a regulated industry. Shorter time-defined cycles allow legal, compliance, and risk departments to provide frequent product review, testing, and feedback alongside efforts to ensure users’ needs are met. Institutions then avoid the costly mistake of releasing a product that few want, or that doesn’t appear to be any better than whatever came before.

Many banks have a traditional top-down flowchart, so there may be resistance to breaking down projects into smaller, more manageable chunks where teams deliver software incrementally. So begin with an initial assessment of current practices and identify areas for improvement.

Newcomers often use what’s called the “Disciplined Agile Delivery” model, a hybrid approach more compatible with top-down flowcharts. This model calls for forming cross-functional Agile teams with developers, testers, business analysts and other stakeholders. The teams engage in planning, hold daily stand-up meetings, conduct sprint reviews and continuously review processes to make improvements. The result is faster software delivery, improved communication between teams and increased collaboration among stakeholders. The ultimate goal, though, is a boost in customer satisfaction.

Expect Change and Go with the Flow

The common theme with Agile — regardless of how it is implemented — is not being bound by a rigid approach. Teams need to welcome changes in project requirements, even late in the development timeline.

Agile is about the ability to make course corrections and do so at a faster pace. Speed and accuracy are signs of success, even when the destination ends up being different than expected.

About the author:
Sahil Khullar works as a senior consultant in fintech and specializes in agile project management.

Matt Doffing also contributed to this article.

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