It is this generation that has only known fast moving, 'digital-first' companies. Therefore, they expect services as robust and intuitive as Google, as user-friendly as Amazon and as stylish as Apple. Customers belonging to this generation are characterised by their demand for immediate gratification, tailored services and first-class customer support. Finally, they expect all these compressed into the size of a smartphone screen.
For local financial services companies like major banks, these rapidly-changing customer demands are compounded by another challenge from the global, digital giants that are slowly creeping into the financial services environment. For example, Apple recently launched its near-field communications wallet, PayPal is gaining momentum locally and Twitter has revealed its plans to move into peer-to-peer payments. The banking sector will experience stiff competition from a number of players including social networks, telcos, social lenders, digital players, mobile wallet providers and even retailers.
As the financial services industry is getting turned on its head in South Africa and in almost every other market around the globe, banks are left in a very challenging position. Millennials are demanding greater speed, agility and innovation from their banks. They are also willing to trade a certain amount of privacy and share a certain amount of information in exchange for better and more personalised features and better prices. However, banks generally remain hamstrung by outdated legacy infrastructure and by their primary responsibility to protect customers' privacy, their data, and their finances.
Taking an agile approach to software development (as opposed to the traditional) enables banks to address these challenges in two main areas:
Something of a "chasm" is emerging, between those charged with evolving a bank's digital touchpoints (like banking apps and online banking) and those responsible for the integrity of core systems lying at the heart of a bank's operations. Joining up these two environments requires complex integration and constant development which only an agile methodology can achieve.
To capitalise on the latest technologies and deliver banking solutions that meet evolving customer demands, banks will need the speed and agility that only an agile methodology can provide. As new concepts like social payments, peer-to-peer lending and virtual currencies start to take hold, software development needs to be rapid and iterative to stay ahead of competition and meet customer expectations. With an agile approach, banks can accelerate their phases of analysis, development, testing and release.
Once agile methods start being applied across the entire organisation, a state of critical mass is achieved and a bank is able to produce regular iterations in its offerings. Teams can flexibly scale up or down as per the project's demand. Most importantly, the organisation starts to look at an agile approach for every aspect of its enterprise architecture.
In the ultra-competitive world of financial services, the winners will be those that use agile practices to effectively overcome challenges, and serve the needs of millennials with experiences that rival those of the world's best digital companies.