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How to fast forward your institution and leap over the digital divide.

Consumers' expectations are changing and innovation is happening at an ever faster pace. New product offerings which traditionally would have taken years to develop, can now be created in a matter of weeks. Given this, it’s not surprising that 88% of incumbents are worried that business will be lost to disruptors.

Adapting to this change is not about layering digital features on legacy systems and old operating models. Digital offshoots by incumbents are becoming increasingly common but are not guaranteed success e.g. Finn by JP Morgan (only signed up 47,000 customers in 2 years before closing) or PagoFX by Santander (set up as a competitor to Wise but closed within 15 months).

To succeed in this era, operating models need to adapt. Cost to income ratios of digital banks are almost 25% lower than traditional banks and tech spend is rising. Slow iteration on traditional practises will result in higher costs with a loss in market share for incumbents. Companies need to break the mould. A new ‘high velocity’ operating model is required, prioritising agility, speed and change in place of inflexibility and stagnation.

A high-velocity operating model has 5 key principles:

Research has found that banks on Mambu typically see 10% higher end-user satisfaction than competitors. New10 (an offshoot of ABN Amro) has been growing quickly with 65% of its customer base new to the group and an NPS score of 60+.

Vietnamese digital bank Timo leverages technology to improve financial accessibility for all.

TymeBank saw a 50% cost reduction in its core IT costs after moving to Mambu and N26 cut its core costs by 5x.

By drawing on an ecosystem of partners, Mambu customers have been able to grow their customer base by 5.1x in 4 years (as per Mambu's research).

Mambu helps firms achieve these principles with a composable approach to technology. This is based on the rapid and flexible assembly of independent, best-for-purpose systems. By bringing together the best of what the market has to offer, these maverick firms on Mambu have been leading the way with this approach and are seeing tangible impacts.

Change can be hard but the benefits are clear for those that are willing to adapt and marry cutting edge tech with an agile, adapted operating model. Waiting to see the change needed may not be viable. Banks and FIs that lose relevance and don’t evolve may well become extinct as their customers move to more innovative and relevant solutions to their needs.

Want to enable better business outcomes for the long-term? Find out how you can join the race to high velocity here and come up on top.

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Our Advisory team brings Mambu's unique knowledge to clients to help them carve a path through complex operational challenges. They facilitate access to new customer segments or markets, define digital product roadmaps, identify ways to improve product flexibility or simplify business architecture.