6 Barriers to Agile Adoption in Financial Services

Despite Agile methodologies being around for decades and most organisations trying to become fully Agile (or at least adopt elements of it) there are a number of challenges that organisations in the financial services industry face when trying to adopt Agile.

1. Lack of understanding of Agile
   Agile practices and methodologies may not be well understood by all stakeholders. Agile is very well understood in technology and programme circles, but that understanding can become more diluted or cursory in other parts of the business not exposed to agile in their day to day working. It’s important to ensure all stakeholders are clear on the methodology and its pros and cons to avoid confusion and mistrust.
   
   Agile tends to make problems visible earlier, therefore when you start Agile practices things may look worse before they get better. Agile is not a quick fix to delivering everything faster which is often misunderstood. There can be a perception that Agile is, sometimes, at odds with time-barred waterfall-style delivery where, on paper, stakeholders get a clear map of key project milestones and dates upfront.
   
2. Compliance and Risk management
   Financial services organisations are subject to a wide range of regulatory requirements and compliance issues. Existing governance processes can make it difficult for them to adopt Agile practices that prioritise flexibility and agility, involving rapid iteration and frequent changes to processes and systems.
   
   Financial services organisations need to manage risks associated within their operations closely. Agile methodologies may therefore be seen as too risky and not suitable for the industry or aligned to the organisation's appetite for risk. Agile methodologies often involve working in small, cross-functional teams, which can create challenges for managing and mitigating risk at both delivery and organisational level.
   
3. Bureaucracy and siloed decision making
   A lot of corporate processes are designed in ways that makes operating as agile teams challenging. Many financial services organisations have complex and bureaucratic decision-making and governance processes with gate keepers at various stages of the project lifecycle. This can make it difficult to implement Agile practices that rely on cross-functional teams and swift decentralised decision making.
   
4. Legacy systems
   Many financial services companies have legacy systems that are difficult to integrate with new technologies and processes. Agile practices such as Continuous Integration and Continuous Deployment (CI/CD) that rely on modern tools and technologies can be impossible to implement when working with older architectures and frameworks.
   
5. Long-term projects
   Many financial services projects are long-term and transformational, often Agile methodologies are better suited for short-term, rapidly changing projects or continuous improvements. It could even be argued that Long Term planning is the enemy of an Agile approach which is rooted in the desire to discover the requirements iteratively.
   
   Adopting Agile methodologies requires an acceptance that projects will change as they develop and evolve. Having a well defined Product Owner role within the project is the best way to ensure that as requirements change the items most valuable to the business are prioritised. This means that changes to the plan are only made when they are delivering valuable change.
   
6. Resistance to change
   Agile methodologies often require a significant shift in organisational culture and ways of working, which can be met with resistance from employees who are used to traditional, hierarchical structures.  It can be difficult to gain buy-in from and support for Agile methodologies and new ways of working from people and teams within a large financial services organisation.
   
   Teams need to be given the authority that allows them to take ownership and fix problems, if this isn't provided then it can cause discontent and frustration because the Agile approach has raised expectations.

Despite these challenges, many organisations in the financial services industry have successfully adopted Agile methodologies, or elements of them, and reaped the benefits.

An organisation that has achieved business agility is able to adapt quickly and smoothly to the changing business landscape making it much more flexible. They can take better advantage of opportunities and more easily react to threats.

However, it requires a dedicated effort and a willingness to adapt and customise Agile approaches to the specific needs and constraints of the financial services industry.

Ensuring that the understanding of Agile is consistent and expectations are managed across all groups of stakeholders is key from the outset. This helps to ensure a smooth transition where all parties are signed up for the same journey.

To see how Answer Digital have successfully helped RPMI/RailPen with their journey to Agile maturity please read the following Case Study