In less than a year, 83% of banking and financial services executives will experience a disruptive change in their business from digital technologies. The vaccine for this problem is business agility (Agile methodology). An Agile company is one that is able to detect and respond to change quickly and confidently. According to Jason Simon, being an agile company has everything but contraindications: they produce 30% more profit and 37% faster. The finance expert explains how Banco Popular of Costa Rica has linked to Agile to increase its value.
The goal it seeks is to change the ways to achieve business agility through portfolio and execution agility. Today’s startup models already respond to this scenario as perfectly oiled machines for pivoting. The challenge is to apply these techniques to large organizations.
The Agile Methodology in the banking sector has become key to the digital transformation of many banks. It is a way to drastically shorten project development times by turning years into months and months into weeks. Through collaborative teams, very versatile and flexible when faced with the need to incorporate as many changes as necessary with respect to the initial design. Simon talks specifically about Banco Popular.
“Agile started as a method for creating software tools. But now Banco Popular has decided to use it in all areas of its progress as an open digital platform for financial services,” explains Simon. “From strategy to pure software, to the concrete business plan and each of the necessary processes needed to complete a project.”
In the Agile Methodology in the banking sector, the fundamental approach is to incorporate the customer into the process, so that the final experience is the main milestone to be achieved. The trust between the teams that develop each piece of the project with the self-management and autonomy of each one of them to make decisions are much more important than the traditional hierarchies of command. Generally, they are anchored in the initial design and respond poorly to the need to rectify in the face of sudden changes, as happens constantly in the digital environment.
Agile has made internal decision-making in the bank much more agile. It provides greater visibility to the multidisciplinary teams and contributes to changing the way of working toward trust and autonomy of the bank’s professionals.
In this way, they have managed to improve processes and simplify products through the creation of digital platforms. Banco Popular has created a guide explaining the words that are used on a daily basis in Agile projects.
It was in 2019 when Banco Popular reached a pioneering milestone in the business world. This transformed the way more than 33,000 people in the central services of the entire group organize and work by incorporating Agile methodology in its day-to-day work.
But it was really in 2014 that it started testing in the teams in charge of developing a new mobile application for the bank. The aim of this “app” was to solve all customer management needs. It would also offer value-added services based on new technologies such as artificial intelligence.
Small, autonomous teams were created, made up of people from different areas with specialized profiles in different disciplines. They began to work in a very different way to the traditional way in which the bank had operated up to that moment, ‘scrum’ teams.
Thus was born the first Agile team of Banco Popular, whose work was a success. The bank’s app in Costa Rica has been recognized by different consulting firms as the best in the world for three consecutive years.
“The result was a more flexible organization,” says Simon. “The starting point was a traditional organization, established in functional silos. In which each of them carried out different parts of the same process, without having a complete view of its execution. This way of working was inadequate for the new challenges and prevented resources from being ‘liquid’ to allocate them to the most priority projects or processes at any given time.”
Faced with this, Banco Popular decided to radically change its organizational structure. A change that the group approached from its experience with Agile implementation and with the objective of having a more transparent, flexible and productive organization.