ARTICLE

Mambu’s Banking Insights for Growth:

Competing in an evolving lending landscape

Legacy systems and rigid integrations are slowing down traditional lenders, with complicated and slow credit decisioning processes.

In this instalment of Mambu’s Banking Insights for Growth series in partnership with Fintech Finance News, with experts from Deloitte and Backbase, we explore how traditional lenders can adapt to meet customer demands for seamless, fast, and flexible loan experiences.

In collaboration with Rashmi Sharma, our VP Engineering at Mambu, David Ruis, Partner at Deloitte and Nathalie Werleman, Regional Sales Director Benelux at Backbase, we delve into the lending landscape.

Old systems and rigid integrations are holding traditional lenders back, leading to complicated and slow credit decisioning processes.

Meanwhile digital natives are looking to their banks with fresh eyes, expecting seamless experiences when it comes to taking out a loan or a mortgage. Similarly, entrepreneurs and small businesses need resources and cash flow, with access to funds providing them with a lifeline for long-term success.

What’s a lender to do? As customers push them to rethink their systems, we discuss what’s ahead for the lending market, and why adopting new technologies is essential to launch innovative offerings and stay ahead of rising competition.

Agility paramount to success in a crowded market

David Ruis: The competitive landscape for lending has significantly broadened in recent years. Many non-financial institutions are entering the market, leveraging innovative solutions, including those of Mambu and Backbase. The biggest shift is that new players are offering loans, enabling customers to borrow from various sources instead of just banks.

Now, lenders reach out to consumers, often through online platforms, rather than expecting customers to visit physical bank locations. In the commercial banking space, we see a trend towards smaller, high-volume loans. This recurring model allows lenders to work more flexibly with cash flow, adapting to the needs of modern consumers.

Nathalie Werleman: This expanded market also opens doors for individuals with less-than-perfect credit. Speed is crucial, particularly for younger generations who demand instant service. Lenders who can adapt quickly and offer flexible solutions will not only survive but thrive in this dynamic environment.

Rashmi Sharma: Lending has entered the digital age, where customers expect to borrow what they need, when they need it, and at the lowest cost. The pandemic-driven acceleration of digitalisation has reshaped customer expectations. Now, they seek personalisation, speed, and a seamless experience. If they don’t find it with you, they’ll quickly look elsewhere.

Capturing a demanding customer base

David Ruis: Consumer and business behaviours are converging, but legacy providers are struggling to keep up. They lack the agility and flexibility to offer innovative lending options, often failing to provide adequate service, suitable payment terms, and diverse funding options.

This gap in the market presents a significant opportunity for forward-thinking lenders to address these unmet needs and capture a growing customer base.

Nathalie Werleman: One of the big trends we are seeing is that customers now want a seamless experience that combines personal and business banking into a single interface. This engagement layer is an important part of the lending experience and only possible with the right technology investments.

Rashmi Sharma: Traditional lenders face intense pressure as competition increases, especially with non-financial institutions entering the market. To keep up, speed is crucial, and this can only be achieved with a mature architecture that enables the rapid launch of superior products.

At Mambu, we support greenfield and established lenders, providing them with a robust core banking system as the foundation for launching differentiated offerings.

Technology that keeps up

Nathalie Werleman: A big trend is coming, and lending is changing. Companies like Bol.com and Amazon are already allowing you to lend while you do your reselling. In the business lending space, people want a unified view of everything, no matter where they are lending from.

David Ruis: Absolutely, the availability of data and how real-time that information is will make credit scoring much easier and faster than in the past. For personal individuals, it's already somewhat smoother since they can just connect their bank accounts. Even for businesses, the experience is evolving to make it even smoother, closing the journey by considering the full lending process and providing flexibility.

Rashmi Sharma: Embedded finance and lending are trends that everybody will need to address. Centralising the data and having the right technological approach to reduce the cost to serve is going to be crucial. Leveraging new technology will be key to staying competitive in this evolving landscape.

What's next?

The lending market is rapidly evolving, and banks are losing market share in areas like mortgages, business and consumer loans due to intense competition from neobanks, peer-to-peer lenders, and embedded finance.

Success in modern lending requires immediate improvements and a focus on customer-centric engagement, ensuring fast and efficient service to retain and attract customers. The best way to stay competitive is to adopt the right technology, with transformation starting at the core.

Learn more about how Mambu can support this transition with our cloud banking platform, purpose-built for agility, innovation and a changing market.

Share this post

Other resources

Empower your customers with Buy Now, Pay Later

Buy Now, Pay Later (BNPL) is explosive, projected to reach €3.5 trillion globally by 2030. Discover how it has turned into a growth engine for fintechs, as well as incumbent banks, lenders and retailers.

Learn more

Celent: next-gen core Embedded Finance

In this report commissioned by Mambu, Celent highlights the role of a modern, composable foundation, the significant benefits for banks and the challenges that incumbents face with legacy technology.

Compose your perfect lending solution

Mambu's composable lending platform enables you to create better customer experiences and build thousands of lending solutions, ranging from retail mortgages to business lending and purchase finance.

Learn more