Enabling Bimodal IT in Banking with ABN AMRO
Mounting shadow IT solutions and evolving customer needs prompted ABN AMRO to enlist low-code to deliver systems of innovation more quickly for the business
Every bank in the world has seen an increased demand for digitalization of their services, a fact made more prominent with the onset of COVID-19 in 2020.
ABN AMRO, the third largest bank in the Netherlands, offers private, retail, commercial, and institutional banking across Belgium, France, Germany, and the UK. Serving over 3 million customers and managing €197B in assets, ABN AMRO has not been immune to the pressure to offer more digital touchpoints both for customers and employees.
With a workforce of 19,000 employees, ABN AMRO began seeing an uptick in shadow IT solutions to meet these needs, which presents risk in the context of the high regulatory and compliance standards of the banking industry. In 2016, ABN AMRO reassessed their IT landscape and determined that they needed a more turnkey development platform to deliver innovative solutions more quickly while retaining a level of governance that met industry standards. Ultimately, they determined that low-code was the solution. Since adopting the Mendix platform, ABN AMRO has delivered over 60 low-code applications to aid in internal process automation, with plans to expand to customer-facing territory in 2023.
For over 20 years, Mark Bus has worn several hats across ABN AMRO, today serving as a Product Owner in the rapid application development (RAD) capability. Bus summarizes it best: “People want to be able to do their banking business whenever and wherever they want. Being a bank, we play an essential role in the financial system, the economy, and our society. Our regulators and customers have higher expectations from us, and this drives the choices we make around software development. We have always focused on reliability, stability, and security. We are also an organization which, like every enterprise, needs a capability to deliver software fast.”
More Control in IT
ABN AMRO’s IT team was stuck in a common cycle – increased demand for solutions from the business created a hefty IT backlog which couldn’t be addressed quickly enough with traditional development methods. This resulted in the creation of hundreds of shadow IT solutions, which then presented new challenges or regulatory concerns putting more work back on IT’s plate.
“If your IT department won’t deliver the solutions for you, the business users will find ways to deliver it themselves. This is how we ended up with a huge portfolio of end-user developed applications, complex Excel sheets, MS Access or SharePoint solutions, and IBM Notes apps. We had hundreds of them – and we are not unique in this situation, as there are many banks who still have mission-critical processes run through Excel spreadsheets,” recalls Bus.
Inspired by Gartner’s concept of bimodal IT, Bus and his team reached the conclusion that Mode 1 – traditional development platforms powering predictable systems of record – was covered by existing Microsoft and IBM solutions. However, Mode 2 – solving new problems and experimenting with faster delivery timelines – was a gap the organization needed to fill.
“The second mode was where we didn’t have an explicit strategy yet, which was leading to this huge portfolio of shadow IT applications. We decided to expedite our search, and it quickly became clear that low-code was the answer we were looking for,” says Bus. His team turned to analysts Gartner and Forrester, looking explicitly at leaders in the top right quadrant of their latest reports, which collate quantitative and qualitative market research to identify industry trends. “We created a shortlist of low-code providers – Betty Blocks, OutSystems, and Mendix. Ultimately, we ended up selecting Mendix as our mode 2 solution.”
Choosing Mendix was based on stringent platform requirements, both rooted in the regulatory standards which are upheld across the organization:
- Flexible deployment options, which would allow ABN AMRO to fully manage and deploy applications on the Mendix Public Cloud as well as any on-premise or private hosting environments. “As a bank, we were looking for an option where we could deploy low-code apps on our own, fully-managed infrastructure. At that time, Mendix was the only low-code provider that supported this wide range of deployment options,” Bus said.
- Parameters for governed development, as ABN AMRO must adhere to an internal risk control framework.
Powering Agile Automation
Adopting Mendix in 2017 inherently prompted ABN AMRO to start working in an agile way with smaller, lean teams. Over the course of 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 offer support in nearly every facet of the business, including ABN AMRO’s know your customer, risk, human resources, finance, operations, and facility management departments.
As an enterprise operating with a bimodal strategy, Mendix is not the sole development language at ABN AMRO’s disposal. What Bus and his team have developed in the last 5 years is a clear framework for what is a suitable low-code application versus what is best suited for a high code programming language. “What we do now is focus on matching the right use cases to the right means of development,” says Bus. “For example, we created a positioning document in which we set some standards that help identify when to use Mendix, high code development, robotic process automation, or business process management solutions. That pretty much defines when a use-case lands on either of these means.”
Some of ABN AMRO’s most impactful and prime candidates for Mendix over the years include:
- A suite of workflow automation tools to support employees in preventing and detecting financial crime. Although ABN AMRO has developed an IT ecosystem which prioritizes automated customer and transaction monitoring, many processes in this space still involve human interaction. Even today, 20% of ABN AMRO employees will play a role in financial crime detection. To help deliver on automation where possible, the team has delivered several Mendix applications to support with data aggregation, case assignment, and status tracking throughout the detection process.
- ‘Thumbs Up’, a Mendix application that enables ABN AMRO employees to appreciate their colleagues in a fun and easy way. During negotiations in ABN AMRO’s 2020 – 2021 collective labor agreement, the business placed an emphasis on employee appreciation as part of the organization’s culture. The ‘Thumbs Up’ app allows employees to select a small gift for a colleague that will then be sent directly to their home address along with a personalized card. In the first six months after go-live, some 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 their launch, as well as a mended relationship with their business partners. Working in an agile way, combined with the speed of low-code, has allowed the culture of ABN AMRO to be more change-ready. Smaller, empowered teams can proactively address business challenges, with the affordance to experiment and try new things without wasting time that could be spent serving their customers.
“Our organization adopted agile SCRUM as a way of working, and that means that we moved away from the traditional process of having to present a business case, secure resources, then start building,” says Bus. “We have pre-funded teams in our organization with product owners who are basically tasked with creating as much value as possible with the teams available to them.”
Additionally, the collaborative nature of Mendix offers a common language for business collaborators and engineers to understand requirements, share progress, and offer feedback.
“Mendix is a visual tool, so if I build something following Mendix best-practices, it would be recognizable to someone else who has Mendix experience. It’s very easy to just look at the screen and understand what the developer is trying to achieve, which is a big contrast to high code,” says Bus. “Mendix has a feature to annotate your microflows for example, so you can explain the purpose of why you developed that particular feature, and that is something we do in every project.”
Lessons From an Early Adopter
Now boasting five years of Mendix experience, Bus and the IT team also have their fair share of lessons to offer other enterprises interested in adopting a low-code platform, such as:
- Don’t hesitate to enlist an implementation partner. Bus explains that his team did not start out with a specialized partner, and in retrospect, the team may have done this differently. “Mendix is low-code, it’s a lot faster, but it’s still software development. You still need skills in your organization to be able to develop low-code applications, and you can start building a lot faster if you start with a partner that has those skills in-house and a mature practice.”
- Follow best practices when identifying your first project. Oftentimes the sweet spot for an initial project is an application that is high visibility and high value, but low to moderate in complexity. Says Bus of this learning for his team, “The industry has a saying of don’t throw away your old shoes before you have the new shoes on your feet. That is also the case when you are replacing legacy applications. It can be a journey of months before you reach the first MVP – which doesn’t really feel like rapid application development. This stunted us a bit at first, but by 2019 we shifted our focus to internal automation and really started to create traction.”
Scaling to Customer Experience
With a portfolio of 60 applications and parameters to guide them as they scale, ABN AMRO looks forward to tackling their next frontier with low-code – customer-facing solutions. Bus hopes to soon be using Mendix to optimize touchpoints across the customer journey, improving the experience to increase sales conversions.
“We’re positioning Mendix as a solution that will sit in our digital eCommerce channels,” says Bus. “We have sales specialists and eCommerce experts looking at data, web analytics, and user clicks to see how fast customers move through our sales funnel. They are using that data to continuously improve the forms and models we offer customers in our digital channels, and I think this dynamic world is the perfect match for low-code.”
“Banks need to become digital. Newcomers and FinTech companies who don’t have to worry about legacy IT would be more than happy to take over from traditional banks. Software is eating the world. Today, ABN AMRO can meet the demand for digitalization while being very careful not to compromise on the liability, stability, and security of our systems,” Bus concludes.