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Unencumbered by the existing infrastructure of their legacy competitors, fintech companies are leveraging new technologies to deliver personalised products and services with the speed, convenience and security customers expect as standard in every other aspect of their lives.

In doing so they’re posing a very real challenge to legacy institutions. One that’s only going to grow as their customer bases become more attuned with banking on their mobiles than in bricks and mortar branches.

Failure to innovate to meet the evolving demands and expectations of customers could result in incumbents being outpaced by new entrants, highlighting the pressing need for Nordic banks to adapt to the changing digital landscape.

The future of banking is composable

Monoliths have long been the core banking system of choice for incumbent banks. But faced with seismic changes, Nordic institutions are having to look at new solutions to keep up with the digital revolution. One of the biggest drawbacks of monolithic systems is that they are inherently inflexible, especially when it comes to adapting to changing customer needs. Put simply, they haven't been built with the future of banking in mind. And as the industry gravitates towards more agile systems, monoliths are facing extinction.

So how can Nordic institutions react to this changing landscape?

The answer lies in composable systems, a new generation of decoupled, cloud-native banking platforms that enable legacy institutions to leverage the power of their existing infrastructure while moving with the speed and agility of a fintech.

Meeting customer needs in real-time

Because composable systems allow institutions to mix and match different services from a variety of vendors, they can be used to create the kind of highly flexible and customised experiences that modern customers demand. Best of all, these solutions can be rolled out rapidly. This enables institutions to react to changing market needs, then scaling up or down depending on demand. Take the current trend for “buy now, pay later” loans, a form of financing that’s hugely popular at the moment. By adopting a composable system Nordic institutions can react to changing market trends, rapidly designing and deploying their own “buy now, pay later products” to integrate with their existing offerings.

This ability to react to customer needs in real-time means that institutions can cast off the inflexibility of traditional models and instead move in tandem with changing market forces.

The speedboat solution

This kind of solution is what’s known as a speedboat. By harnessing the same technologies that fuel their fintech competitors, incumbents can dramatically cut their time to market, reduce operating costs, improve customer experiences and deliver attractive returns for shareholders. Giving incumbents the opportunity to leverage existing resources without the traditional constraints of their systems, composable technology is unlocking the true potential of banking as a system (BaaS) - safeguarding institutions from the threat of digital disruption.

The journey of Mambu customer ABN AMRO's New10 is a great example of perseverance and innovation in the face of market changes, taking the speedboat approach to achieve this transformation.

In 2016, ABN AMRO saw a shift in the market and identified three key market trends:

  1. They were faced with the arrival of innovative fintechs and bigtechs;
  2. Their need to change legacy systems and processes;
  3. The need to seek out new market opportunities.

To enhance their ability to quickly deliver innovative solutions and focus on enhancing customer experience, New10 was established as an independent entity that could leverage both the agility of fintech and the financial expertise and resources of ABN AMRO. To support their go-to-market strategy and optimize their operations, New10 turned to Mambu's cloud-native banking platform, which provided a cost-effective, infinitely scalable, and flexible composable, lean, and cloud-native solution that offered significant cost savings compared to traditional systems.

In order to meet all customer demands, Mambu works with a wide network of partners. Our ecosystem comprises consultants such as Knowit, supporting companies and organisations in the digital transition, tech partners such as Signicat, supporting a comprehensive suite of digital identity verification solutions, as well as system integrators that all support and add value to Mambu customers.

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Justus Roux
With over 20 years of experience in business intelligence for global banks in the fintech space, Justus enables a team of solution architects and engineers in aligning customer demands to Mambu's value proposition. He currently influences the product development roadmap and helps determine our go-to-market strategy within the EMEA region. Justus is also a seasoned public speaker and often guests panels in industry conferences around the region.
Justus Roux