In the ultra fast-paced digital era, consumers are not inclined to wait for sluggish financial institutions to catch up. A global Mambu survey revealed a striking trend - the pandemic made 75% of consumers more likely to use digital banking in the future.

The pandemic brought forth a paradigm shift in consumer behaviour, and the demand for digital banking solutions skyrocketed. As people adapted to remote work, online and contactless payments, they grew accustomed to the convenience and speed offered by digital platforms. The ease of accessing financial services through mobile apps and online portals became a norm, reshaping their expectations.

For incumbents burdened by legacy platforms, the digital revolution is a storm on the horizon. They find themselves trailing behind in the race for innovation. Large-scale digital transformation projects can last years, cost millions, and result in more complexity rather than much-needed agility. According to McKinsey 70 per cent of digital transformations exceed their original budgets, and seven per cent end up costing more than double the initial projection.

What is more, IDC Finance, 2023 predicts tha banks will spend $57bn on legacy payments tech in 2028, impacting costs and stifling growth, whereas Forrester, 2022 reports that ambitions to reduce technical debt are being derailed again since cost-cutting has become a priority for 73% of financial services firms. Amidst the ever-increasing competition, the timing couldn't be worse, but cloud technology offers a glimmer of hope.

To stay competitive, banks must adopt cloud-native solutions that will enable them to transform linear value chains into agile ecosystems that cater to customer needs and provide new revenue streams. bob Finance, a Zurich-based fintech, originally leveraged Mambu to launch its BNPL offering. As it establishes itself in the lending market, the lender saw the need to deepen its technical integration with cloud partners. With its offerings built on Mambu and deployed on GCP, bob Finance now is poised to continue building products and developing new opportunities in the region.

In this golden age of finance technology, cloud solutions are revolutionising enterprise resource planning, finance applications, and microservices, significantly reducing complexity and costs while maintaining functionality.

To truly become customer-centric, banks need a super agile back end that delivers essential functionalities for daily banking, lending, accounting, and reporting. By optimising these core operations, banks can focus on creating innovative products and services that keep them ahead in the ever-changing landscape.

Bank Jago, an Indonesia-listed bank, shares this vision and believes that technology is more than just providing new experiences; it will also create wider access to finance and equality. By implementing solutions from Mambu and Google Cloud Platform (GCP), Bank Jago is able to swiftly introduce life centric digital financial services. In Mexico, Libertad Soluciones de Vida, the largest microfinance entity known as a Sofipo, chose cloud technologies to help accelerate its digital transformation processes. The partnership with Mambu and GCP enables Libertad to integrate all technologies it has adopted in the past along with newer ones down the road to offer its customers better and smoother user experiences.

Banks have lofty aspirations. They aim for agility, customer-centricity, and future-proofing their business. McKinsey's prediction reveals that banks successfully managing digitalisation could unlock immense profitability and growth potential, creating a value opportunity of up to $20 trillion. To navigate this transformation, an in-depth analysis of current infrastructure, market dynamics, customer needs, and organisational capabilities is crucial to determine the goals and necessary actions.

As each bank is unique, a customised approach is essential; a one-size-fits-all strategy won't suffice. Typically, banks opt for one of four approaches: wait and see, buy/acquire, rip and replace transformation, or augmented evolution. The evolutionary approach is the smart choice for banks seeking to thrive in the fast-paced digital landscape. While the wait and see approach may lead to irrelevance and decline, and acquisitions can be complex and limited, the rip & replace method risks creating a legacy technology burden. On the other hand, the evolutionary approach begins with a fresh slate, fostering innovative thinking, and tackles one segment at a time, ensuring focused improvements.

Moving to a cloud-native core lets banks connect legacy and emerging technologies to orchestrate new processes and compose new experiences. By embracing an evolutionary mindset and cloud technologies, banks can proactively shape their future, embracing change as a catalyst for growth and customer-centricity.

Learn more about outpacing fintechs and fast tracking competitive success in our free Get in front with a cloud core whitepaper.