Recognising the need for bespoke SME lending
Recognise Bank Limited is a subsidiary of the City of London Group and it was formed to provide financial services to the UK small and medium enterprises sector as well as the retail and business savings markets.
Recognise has taken much of what was good about business banking from the past, namely bespoke and personalised service, and paired it with the latest cloud technology. Together with streamlined processes, it offers customers an unparalleled level of service. Recognise’s relationship-led, digitally-enabled offering is the first of its kind in the market. The model incorporates true relationship management, with relationship managers who know the local businesses and are best positioned to understand customer needs and how to address them appropriately.
Recognise Bank - winner of the ‘WOW! We can build a Bank!’ category at the #FFAwards 2021.
Jason Oakley, CEO of Recognise states, “Recognise is a different type of bank that understands what SMEs really want. We believe that in banking, the SME community has drawn the short straw for too long, putting up with rigid, tick box solutions and faceless service. We draw on our financial expertise and entrepreneurial experience to design solutions that are flexible. We keep our customers close, because to us, it is personal, and we believe in truly knowing the business we lend to.”
After establishing hubs in London, Manchester, Leeds and Birmingham, Recognise is working on further expansion into Bristol, Milton Keynes, East Midlands and Newcastle by the end of 2023, and in five years' time aims to reach 54,000 depositors and 5,100 borrowers.
During the past decades, business lending and associated services to SMEs have become steadily less customer-friendly. The erosion of expertise within banks, a side effect of the global economic crisis of 2008, has led to telephone-based communication, diminishing the role of relationships and forcing customers to rely on call centres. As a result, the human understanding of the SME customer, their accessibility and banks’ responsiveness to their challenges has slowly but surely weakened.
Additionally, as the global COVID-19 pandemic puts economies under immense pressure it also highlights how traditional financial services are failing the six million of the UK’s SMEs. Most SMEs, who even at the best of times struggle to balance finances, have seen trade and, critically, cash flow, brought to a halt overnight.
The founders of Recognise are on a mission to create a truly customer-friendly SME bank. This unprecedented demand for loans and credit lines caused by the pandemic positions Recognise favourably to serve its target audience effectively.
Oakley adds “2020 has been overwhelmingly tough for SMEs. Our ambition is to help them with speedy, expert services. To achieve that level of freedom we needed a composable architecture, something that’s sufficiently flexible and adaptable so that we don’t have to keep re-platforming, which is expensive and inefficient. We had figured out the ‘what’, now we just needed to find the right partner to help us with the ‘how’.”
To successfully achieve what it set out to do, and to serve starving SMEs effectively, with speed and flexibility, Recognise needed a state-of-the-art cloud platform to support a cutting edge digitally-enabled proposition.
Having considered a blend of competitors, from traditional core systems to cutting-edge cloud platforms, Recognise found a great match in Mambu, thanks to its cloud native approach. Monica Velasquez - Torres, CTO at Recognise comments, “Mambu’s approach is different to simply hosting in the cloud. Mambu’s SaaS banking platform is accommodating in terms of our technological needs, business requirements, delivery approach and total cost of ownership. We have a very pragmatic approach to lending and savings and saw a great match of culture and ethos in Mambu. From the outset, our method was aligned with Mambu’s composability philosophy.”
Mambu’s composable architecture and its API-first nature allow the build of seamless digital solutions all in the cloud, which is a perfect fit for Recognise - a cloud-led bank. As a preconfigured system, Mambu requires very little coding. The Mambu Process Orchestrator (MPO) is another powerful tool that helps build integrations with a different view such as that of a business process, and it allows Recognise to integrate a number of platforms seamlessly.
Recognise can connect to the extensive offering of functionally robust open APIs and access a vast ecosystem of partners, such as nCino, Clear.Bank and Microsoft Dynamics, which enable Recognise to create innovative tailored solutions at speed and pursue further solutions for SMEs.
The power of ecosystems in action
Mambu’s composable SaaS banking platform allows a single point of defining, configuring and maintaining all product, transaction, account and customer data. This approach gives Recognise the flexibility in their overall system architecture and allows them to work with best-in-class vendors, such as ClearBank, Microsoft Dynamics and nCino.
Using Mambu’s Process Orchestrator (MPO) and easy to use Mambu REST APIs the team at Recognise built the necessary integrations in close collaboration with Mambu.
- ClearBank | Real-time payments
Working closely together, ClearBank, Mambu and Recognise composed a banking infrastructure that will transform the face of relationship banking with SME businesses. The tightly built integration between Mambu and ClearBank allows Recognise to access UK payment schemes and enables the bank to offer real-time payment and innovative services.
- nCino Bank Operating System® | Compliance & automation
Integrating cloud-based nCino helped Recognise to quickly become operational by providing simple and streamlined SME banking processes. Recognise seamlessly implemented nCino’s intuitive workflow mirrors the loan journey, allowing applications from enquiry or referral through to the loan drawdown, to be rapidly processed on a single, end-to-end platform. The technology helps Recognise meet various compliance obligations while providing valuable, timesaving automation in lieu of tedious, manual tasks.
- Microsoft Dynamics | Accounting & reporting
To help design the platform structure that would allow seamless data flow between Mambu and Microsoft Dynamics, the Mambu team helped Recognise to build the connector. Microsoft Dynamics now handles all of Recognise’s accounting data and reporting.
Monica Velasquez - Torres summarises ,“The MPO is a powerful tool that helps build integrations with a different view such as that of a business process. There is no need to write reams and reams of code. More importantly, the MPO understands the business process and the data communication required at the very outset, when two platforms need to interact . It allowed us to integrate a number of platforms in a seamless way, which enables us to see data communication in real-time. By working with partners like nCino, Microsoft Dynamics and Clear.Bank and integrating them into Mambu, we have already seen, even at this early stage, how technology plays a valuable part in enabling a strong and effective customer experience.”
Recognise has become one of the first SME-focused banks to launch since the COVID-19 pandemic, and with Mambu, it is set to transform SME banking in the UK. Its flexible platform gives Recognise a considerable competitive advantage allowing it to fundamentally change the small business banking experience by unlocking an entirely new value exchange between SMEs and their bank.
According to Velasquez, “We were impressed with how forward-looking Mambu is. We aim to enable our customers with a seamless customer journey powered by cutting edge technology, which Mambu offered straightaway. As a greenfield with no legacy, we were able to leverage Mambu and be up and running for a fraction of the cost of traditional core providers. Now we offer the latest technology to our customers at a really low cost, which allows us to stay ahead of the market while creating customer loyalty, advocacy and bringing in repeat business resulting in increased profitability.“
Having initially gone to market with a range of products in commercial property, and working capital loans for SMEs, Recognise soon plans to introduce savings for businesses and asset finance solutions in future. Before the official go-live in January 2021 Recognise had seen over £333m of enquiries, and the bank’s goal is to underwrite around £250m in new loans, spread across all of its product lines before March 2022.