Driven by customer demands, new digital challengers, fintechs, and even big tech are seizing on the opportunity. By applying technology, they're providing more agile and convenient financial products to the market. This has sparked a life-or-death fight for the relevance of traditional banks, and incumbents can no longer rest on their laurels.

To innovate at pace and deliver a differentiated customer experience, financial services organisations are transforming their infrastructures and embracing the shift to the cloud. Here’s why.

Accelerated time to value

Operating from the cloud allows financial institutions, as well as non-traditional players like telcos and retailers, to move fast. In fact, a report by Accenture indicates 82 percent of North American banks have moved enterprise functions to the cloud. What’s left is the core.

By using Software-as-a-Service (SaaS) core banking services, feature updates and products can be rolled out in days, rather than months. Where banks have migrated to next-generation cloud-native banking platforms, their IT costs associated with core services have reduced by approximately 50 percent. This is driven by the elimination of protracted upgrade cycles (about 35 percent reduction in IT headcount), faster and cheaper launch of new products (about 80 percent reduction in time to market), and simplification of the application landscape through modern architectures.

The approach not only shifts the agenda in favour of innovation, it also frees up development resources to focus on higher value projects. Mambu enables banks of all sizes, lenders, fintechs, retailers, and telcos to focus on the design and development of nearly any type of financial offering. Thanks to cloud partners like Microsoft, Mambu is geographically agnostic, virtually eliminating the barrier to expand into new markets.

“With technology comes the opportunity to better address the evolving needs of end customers. The shift to the cloud is a key differentiator for financial services providers today. Together with Mambu, we're dedicated to helping decrease time to market, providing more integrated solutions that reduce risk across the ecosystem and identifying new opportunities for innovation. The general availability of Mambu on Microsoft Cloud will create better and differentiated customer experiences for existing and new financial services customers globally,” Patrice Amann at Microsoft.

Complete flexibility

Cloud-native players enjoy simpler IT, greater flexibility, and more rapid experimentation. By contrast, traditional financial institutions are boxed in by existing hard-wired software, leaving high levels of technical debt and a growing agility gap.

Banks need to minimise back-end complexity with a simplified architecture, so they can deliver differentiated financial experiences. And it’s not one-size-fits-all. What works for one bank might not work for a lender, and what's needed today will differ from an unexpected tomorrow. By following an ecosystem approach, financial services providers can innovate at pace.

Mambu's flexible core banking system integrates with best-of-breed connected services through application programming interfaces (APIs). Vendors handle maintenance and updates of SaaS solutions, so financial institutions can focus on improving the user experience layer. Built on a single codebase, the Mambu platform is up to date for all customers and provides seamless upgrades. This minimises technical debt and business disruption for customers.

Rich data insights

Today, convenience and ease of use are an expectation for financial services providers. It’s no longer about selling products. It’s about meeting and anticipating rapidly changing customer needs.

Yet, very often, financial services providers have no single view of the customer. For lenders to make sound credit risk decisions, readily available data is critical. This is an opportunity for technology to paint a clearer picture by maximising the use of all customer data. By simplifying the traditional credit technology landscape, lenders can make accurate decisions.

The Mambu and Microsoft Cloud collaboration brings this together in a single platform. For instance, solutions like Microsoft Cloud for Financial Services provide a holistic look at the various touch points a financial provider has with their end customer. This allows them to extract insights, derive new business models, and deliver much stronger end services. The result is improved customer service and loyalty.

“The financial services industry faces a great awakening. It is an enormous challenge to keep up with the need for innovation and tech-savvy competitors. Our partner-driven approach ensures our richly diverse customer base has the technology it needs to succeed in a changing environment. Microsoft is a key component in our partner ecosystem and contributes to our customers’ success and ability to scale,” Ben Snowman, VP Partnerships & Advisory at Mambu

World-class privacy, security, and regulatory compliance

Core banking is one of the last of the great transformations in banking since it is a heavily regulated part of the industry. Financial services organisations are realising that change is necessary, and true modernisation can't happen without getting at the core.

Operating on Mambu’s cloud-based infrastructure minimises in-house requirements to manage technological reliability and recovery. This thereby frees up resources to focus on innovation. Instead, state-of-the-art datacenters, underpinned by a vast number of certifications, manage business continuity standards.

Where change is the only constant, digital transformation is essential. Cloud technology is the answer to designing financial products that customers need today and tomorrow.