Future Agile Role Model

in the Financial Industry

A Product Owners Perspective
Future Agile Role Model in the Financial Industry | A Product Owners Perspective

The financial industry must become 2. Additionally, it has become inevitable Agile in the financial industry is a
digital that banks go digital since new different animal
Living in a more and more digital talents, current employees and An increasingly high number of financial
world, both customers and employees customers demand state-of-the-art services enterprises are using agile
demand an easy and seamless use of technology and user-friendliness approaches for implementing new
technologies, e.g. money transfers with and are likely to seek out other systems these days. However, they often
Venmo. Therefore, banks and insurance companies if their expectations are neglect to adapt to the specifications of
companies need to integrate digital not met. Furthermore, companies the financial sector and thus risk a less
solutions to meet the demand for in the financial industry must adapt successful project. This is because agile
innovative and easy-to-use IT solutions. to the rapidly changing business implementations of projects like online
Large-scale projects within the financial environment, driven by their platforms (e.g. booking.com, hotels.com
industry aimed at the extension, enhance- competitors and innovative FinTechs etc.) are entirely different from projects
ment or simplification of their technolo- (due to open banking), which are in the financial industry. Special char-
gies, such as core systems from Oracle, offering very competitive solutions. acteristics must be considered to avoid
Temenos, FIS, Avaloq, etc., will face Otherwise, they jeopardize their challenges due to mismanagement of
extraordinary challenges within the next competitiveness by missing out on agile projects. In particular, this is because
decade. This can be attributed to the promising digital opportunities. of: (1) lack of knowledge of the banking
fact that they are mostly characterized 3. The implementation life cycle (time- system’s complexity, which is charac-
by long project durations and very high to-market) is often very slow, with terized by different core systems, (2)
costs, making their seamless and quick large projects taking several years multiple vendors and system providers
implementation and a reduction in costs until completion. In times of new involved, (3) coordination issues between
very important. In addition, introducing a technologies like Artificial Intelligence, agile and non-agile units/suppliers, (4)
new technology or updating the existing Big Data, and Smart Data, which are weak execution of agile processes and
system often reduces costs in the long run often driven by aggressive technology ceremonies due to lack of agile mindsets/
and allows for better control of the opera- companies from all over the world, principles.
tional side as well. there is an increasing necessity for
companies to prove the systems’ Get it right or pay the price
Go agile now or exit over time functionality upfront, during the The financial industry has not yet
The financial industry currently faces development process, and deliver overcome its current challenges and
several major challenges that make a a solution in a short period with a continues to work with established
successful, efficient and fast implemen- limited budget. Otherwise, the system frameworks and solution approaches. The
tation of new technologies and systems is at risk of being outdated by the time old mindset in a new guise is one reason
more important, but also more challeng- it is finished, making a step-by-step why so many digital projects are unsuc-
ing than ever. implementation and go-live combined cessful; they suffer bad product quality
with a shorter time-to-market a key to or lack specificity to customers’ needs.
1. As projects centered on core systems success. New product owners misunderstand their
are very expensive, complex and role and react as if they were still project
lengthy, there is a high risk of failure managers with waterfall approaches.
and of issues caused by flaws in
the execution process, which can The Future Agile Role Model is the
pose an outstanding economic risk solution: It takes into account both
to the company. In times of high agile frameworks (e.g., SCRUM, Kanban,
economic pressure on banks, there etc.) and the complexity and specific
is an immense interest in saving ecosystems of the financial industry. Three
money by both faster execution and a task´s clusters are the key to success: (I)
reduction in the number of errors and Knowledge Leader, (II) Intermediary, (III)
subsequent adjustments. Administration (see figure 1).

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 Future Agile Role Model in the Financial Industry | A Product Owners Perspective

Fig. 1 – Overview of the future agile role model in the financial industry

Future Agile Role Model

PO has the product knowledge and is the

Knowledge Leader
Business and IT
core of the agile project

User stories are on a granular level and

User Stories
does not capture only business needs
PO prioritizes the test cases for manual and
Testing automation tester. Reducing automated test
cases
PO aligns, drives and discusses open topic
Solution Strategy
with architects and UX designers
Intermediary

Communication Stakeholders don’t interact with the developers.

with Stakeholders PO moderates specific interactions (if needed)
ro
P

er

du n
ct O w Communication Architects and UX designers interact with
between Teams developer teams, but are not part of the team
Administration

Based on the maturity of the project, the

Project Maturity
size of the agile teams is flexible

Cost and Time Time and costs are reported by PMO.

Management PO is reporting benefit and risk of features

Future Agile Role Model in the in a high-performing team. In practice, the complex structure of core systems
Financial Industry there is little evidence for this assumption and the layers implemented between core
The Future Agile Role Model centers the in many financial projects; they lack this and UI (e.g., application back-end, external
product owner. In particular, the product knowledge and therefore result in ineffi- platforms, logic layer for calculations).
owner is at the core of an agile team cient and ineffective teams.
responsible for leading them and being Benefit
a mediator between the team and each Benefit Developers can focus on their work, which
business stakeholder. Upfront awareness of the different results in faster delivery of the product.
functions (push and pull) results in a
(I) Knowledge Leader (A) Business better utilization of limited time and (I) Knowledge Leader (C) Testing
and IT therefore leads to better time-to-market The product owner (rather than the
The product owner has a holistic overview results. Faster implementation saves costs test manager) prioritizes test cases and
of the product and the business, as well and gives the company a competitive aligns them with the overall vision of the
as the IT management knowledge. He is advantage. product. Additionally, automation testing
required to know the business flow and efforts must be reduced to the core
the core system’s functionalities (push (I) Knowledge Leader (B) User Stories features with the highest value impact,
function). The SCRUM master and the Compared to traditional agile, user stories judged by the knowledge of the product
developers are receivers of the informa- need to be more detailed and focus not owner. An automation test set has very
tion (pull function) and do not possess all only on business needs. The product low impact on the quality of the product.
the core knowledge. It would be a huge owner (or the relevant functional analyst) For example, most companies have at
effort to transfer all knowledge to the aligns each user story with the previously least four different environments (devel-
developers within a reasonable timeframe agreed architecture and service structure. opment, system integration testing, user
and with limited budget. The traditional In specific cases, user stories may even acceptance testing, and production), while
agile approach assumes that knowledge is include corresponding API definitions for each developer usually only has access to
captured on the developers’ side, resulting back-end implementation. The reason is the data in his specific development envi-

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Future Agile Role Model in the Financial Industry | A Product Owners Perspective

ronment. Automation test cases cannot (II) Intermediary (B) Communication (III) Administration (A) Project
run on other environments due to lacking with Stakeholders Maturity
access permissions (for developers) or No interaction between stakeholders and At the beginning of a project, developer
lacking tool permissions (for product developers takes place on a recurring teams are smaller, and more product
owners). Furthermore, with current tech- basis. The product owner works with owners need to be acquired to engage
nologies, content-related test cases, e.g., the SCRUM master to collaborate with the teams and transfer knowledge more
a dynamic position allocation calculation various stakeholders and clarify require- effectively. Over the course of the project,
based on stock price, quantity, calculation ments. In some cases, the product owner/ the number of product owners can be
method and the logic of min and trade lot SCRUM master can arrange extraordinary reduced and developer teams grow.
size, are a tremendous implementation meetings and moderate specific topics. Additionally, the number of UX designers,
effort and do not create any additional Especially large and long-term projects architects and testers can be reduced to a
business value. have many different stakeholders. Driving minimum.
a digital solution from the technology
Benefit perspective, different stakeholders Benefit
A smaller number of test automation can be: Application users (front office), At the beginning, costs and overheads are
developers can reduce project cost signifi- business back office (middle office), middle high, but can be reduced significantly after
cantly. Based on current projects, Deloitte management (e.g., delivery and test a short period.
calculates an average cost saving benefit managers), top management (e.g., project
of approx. 10%. leader, program manager) and third-party (III) Administration (B) Cost and Time
vendors (e.g., core system provider, para- Management
(II) Intermediary (A) Solution Strategy metrization provider, data provider, etc.). Responsibility for time and costs lies with
The product owner sets the strategy for the project management office. While the
architecture and UI. The SCRUM master Benefit product owner must be aware of costs
supports the product owner by driving, Developers can focus on their work and and time to manage the developers, the
discussing and reviewing the architecture build higher confidence in the product primary focus of the product owner is
results and working with the UX designers owner, resulting in faster delivery of the assessing the benefits and risks of the
conceptually on a weekly basis. The reason product. delivered features. Especially on large
is that the product owner has the product projects, time and cost management (e.g.,
vision and knows the overall strategy. (II) Intermediary (C) Communication capturing data, analyzing and preparing
For example, he participates in meetings between Teams project management meetings and
about API results to validate quality and By contrast with traditional agile teams in steering committee presentations) is a
dependencies within the application. the financial industry, architects and UX huge effort and takes a lot of time.
designers are not part of the agile team.
Unlike traditional agile ceremonies and They can be organized in their own teams Benefit
concepts, the product owner aligns the (i.e., outside of the developer teams), but The product owner can focus on
architecture and UX design even before must interact with them on regular basis. functional and content-related work.
agile implementation has started (e.g., The reason for this particular organization
on SCRUM: before the first sprint). The is that architects and UX designers build Choose the right partner at your side:
reason is the complexity of core systems the long-term view of the product, while Deloitte can help
and dependency on other projects, which developers have a short-term focus and Deloitte Consulting has a dedicated team
need to be analyzed and planned upfront. work on short term results. Therefore, of experts, including certified SCRUM
they are concerned with different topics Masters, Product Owners and SCRUM
Benefit so that combined team meetings lose Professionals, within the Wealth and
The final shippable product is aligned with focus (e.g., cutting services is an architect’s Investment Management practice. With
the overall product vision. concern, implementing APIs for pre-de- experience of a variety of agile projects
fined services is a developer topic). and ongoing development of our consult-
ants, Deloitte enables clients to achieve
Benefit their digital and innovation goals over
Fewer meetings that are not target-ori- time. Working with Deloitte’s Wealth and
ented will result in better team spirit and Investment Management practice will help
satisfaction, which leads to faster delivery you become a digital player in the market
of the product team (best practice can be and a leading innovative brand in the
found in the SAFe approaches). financial industry.

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 Future Agile Role Model in the Financial Industry | A Product Owners Perspective

Your Contacts for

Investment Management Operations

Dorothea Schmidt Thomas Völker

Partner Manager
Tel: +49 (0)173 6101 592 Tel: +49 (0)151 5807 1127
[email protected] [email protected]

Dominik Moulliet Dr. Torben Küpper

Director Senior Consultant
Tel: +49 (0)151 5807 1047 Tel: +49 (0)151 5807 0019
[email protected] [email protected]

5
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Issue 3/2019