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Meet Mambu, the SaaS cloud banking platform powering financial innovators everywhere.

Mambu

SaaS cloud banking platform

A lot of progress can be made in a decade. At the start of 2010, with the global financial services industry still reeling from the effects of the financial crisis, nearly half of the world’s adults didn’t have a bank account. Ten years later, balance sheets have been repaired, regulators strengthened and at least 

1.2 billion more adults have opened accounts

, gaining access to the benefits and security that banks provide.

We know that financial inclusion matters. It lets people save safely, and transact efficiently, and use finance as a tool to navigate their business and personal life goals. In many parts of the world, access to essential finance and economic security go hand-in-hand. It is what allows farmers to buy seeds on credit and entrepreneurs to expand their businesses. Back in 2010, it was clear that a new wave of technology could open up banking to vast swathes of the world’s unbanked population. This technology lowered costs and made innovation possible, unlocking hitherto unprofitable markets, like SMEs. This potential was the genesis of Mambu and software-as-a-service (SaaS) was the key.

Mambu’s aim was to make a banking platform available as SaaS to people with innovative ideas about how to reach the underserved markets anywhere in the world. And we wanted our platform to be so good that the large existing banks would also want to use it not just for the cost advantages but for the speed, agility and for the more modern architectures that it would enable.

Our goal was to create a secure, scalable, agile, easy-to-use, flexible banking platform that worked on a lean operating model with a low cost-to-serve. Incorporated in December 2010, we opened for business in April 2011.

Our timing was impeccable. Regulators and venture capital had woken up to the potential of digital banking and fintechs, fuelling the rise of innovative services such as peer-to-peer groups Lending Club and Funding Circle in the US. New banks also started to open – 

Metro Bank was the first in 100 years to win a licence in the UK

, swiftly followed by a slew of others, including OakNorth, Monzo and Revolut. 

Regulators also saw the benefits that digital banking could bring. Across Europe and the Asia Pacific, banks using the principles of composability have applied for and won licences throughout the decade, from 

 in China. Incumbent banks quickly saw the operating model benefits enjoyed by these neo banks, perceiving the long-term threat they posed. Their response has included launching their own subsidiary banks on cloud platforms. The result is a more competitive financial services landscape that is on a path to give billions more people access to services that are better and more accessible than ever.

In the course of the past 10 years, the industry has made great strides toward financial inclusion. As financial services continue to pivot away from a Wall Street-mindset towards a Silicon Valley-mindset, it will create more value for the customer and also more options in terms of financial services providers.

In addition to highly personalised neo banks, there will be a surge in ubiquitous lifestyle banking with financial services embedded into customers' lives - think Klarna, AliPay and Amazon Payments. As the next decade progresses, finance will be viewed more as a feature that is embedded in the transaction journey rather than as a standalone service. The benefits will be numerous - from greater innovation and diversification to financial inclusion, particularly in emerging markets and developing economies.

Data lies at the heart of this shift. Think about how data is already being used to ease customer pain points. Electric carmaker Tesla is looking into offering insurance. This isn’t because Tesla wants to become an insurance broker. It believes that by making the process of insuring its cars simpler it will make the buying and owning experience of cars fundamentally better. Klarna, the point-of-sale credit service, is another example. It helps people buy what they want on credit as part of the purchase to reduce the friction of the transaction

Banks will be able to use the data they collect to help people spend their money better – perhaps by offering price comparison services for utilities or insurance along with switching. They will be able to ensure businesses take out the right-sized loans to let them expand profitably without being overburdened. And they will be able to personalise what they offer to individual customers - individuals or businesses -  to help them reach their unique goals. Using technology, retail banking may start to have some of the same features previously only available in personal banking for high net worth individuals but at far lower cost and with lower barriers to entry.

These developments are made possible by open ecosystems that allow banks to pick and choose which technologies they leverage to help them provide the services their customers want at a cost and operational complexity that is attractive. And Mambu will continue to enable both the new entrants and the traditional financial institutions make banking better over the next decade.

building-blocks

Composability unlocks more inclusive, simpler financial services for all

In the long term if there was any uncertainty to the need to be flexible, agile and customer-centric in the design of financial products: that has been clearly answered and the expectations for the future set.

The world is collectively grappling with what this global pandemic means for us — as humans first, but also as professionals. There is no playbook for times like these, but it’s very clear that the pressure on the banking system is growing and the pace of change is unlike one ever seen before. All institutions need to be ready to rapidly evolve to streamline their operations and be able to bring the right products to the right customers at unprecedented speed. Everyone must be able to act fast, because the financial market may look very different in six months. And they need to be ready.

The ability to move quickly and be agile is now a priority. We are more fortunate than most in being able to support both our employees and customers through this period as this is innately part of how Mambu was built. As a geographically dispersed team, lockdown measures in place in most countries in which we have employees, did not adversely impact the business as our teams are equipped to work from home without any interruption.

This ability to work from anywhere particularly in this period, lets us continue to help our customers. With millions unable to work, governments supported by banks and financial institutions are helping consumers cope with the financial impact by implementing measures like payment holidays and delayed interest payments.  This is where the ability to be agile and flexible, and work in a dynamic environment is vital. Working remotely but collaboratively, our developers and engineers have been able to 

brainstorm solutions and roll it out to customers quickly.

COVID-19 will have a transformative effect across societies, economics and offices. It is a health crisis first and foremost that has shaken the world but the tremors have been  felt in every aspect of life, highlighting the need to be able to adapt, rapidly.

As market dynamics keep on changing, both fintech and traditional financial institutions have a chance now to have a tremendous positive impact on the lives of their customers. In the long-term they can choose to embrace the new world based on rapid evolution, of partnership and of modern technology or modern ways of working, or continue on the old paths which will see them unable to adapt when needed most.

We have often commented that the true path to success for any venture is a combination of people, processes, culture and technology. We have lived and breathed this philosophy over the past few weeks and have proven its efficacy.  For other fintechs and financial institutions, the right decisions and adapting this mix will help guide their path and prepare them for the very different time that lies ahead of us.

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Embrace the new world and set a new standard

A composable approach

Traditional providers lock functions like decisioning, reporting, analytics and more together into dedicated applications and workflows. Composable separates it all. This means you can easily combine, replace, add-on and swap out components, systems and connectors to create what you need for your business and for your customers - now and in the future.

What’s composable?

Gino Cordt

Real world examples

Inside composable

10 core principles

composable architecture

Download the guide

Our guide to composability, its benefits, core principles and real life examples.

Time to compose

The sheer number of challenger banks and lenders is growing incredibly fast. So your customers have more choices than they’ve ever had. And because so many of these new banks and lenders use mobile apps, it’s never been easier for your customers to switch and try something new. 

This new dynamic has created a new kind of arms race for the banking industry. See, the most successful banks and lenders have always been the ones with the best customer experience. But today, they’re the ones with the best digital experiences. 

And the thing about building great digital experiences is that you’re always iterating and improving. So the most successful banks and lenders in today’s world don’t just need to deliver a great experience – they need to be agile enough to keep improving it too.

The future of banking is relentless change.

The future of banking is already here. This dynamic is already in motion. Established banks are scrambling to compete on these new terms. And challenger banks are already stealing customers away from the establishment.

But for both these groups, the fundamental challenge is the same.

How do you build a bank that’s designed to constantly change, evolve and iterate?

For the challengers, the hardest thing is staying laser-focused on the parts of their stack that actually differentiate them.

For the establishment, the problem’s a lot trickier. Not only do you need to build a bank that can constantly evolve – you also have to deal with all the legacy, core banking infrastructure that makes rapid iteration nearly impossible.

In both cases, what’s needed is a fundamentally different approach to building a bank.

Composable banking is a new approach to building banking and lending services that’s designed for the new dynamics unfolding in this industry.

Instead of spending months manually building integrations, you use stateless APIs. Instead of getting locked-in to a specific vendor, you stay open and free to improve. Instead of building commodity infrastructure, you build only what differentiates you.

But it’s already helping banks and lenders all over the world answer the biggest question facing them. Now that the future of banking is here – what are you going to do about it?

To find out why banks like N26 and New10 by ABN Amro have adopted a composable banking approach, read the Mambu ebook: 

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The future of banking is here

The right technology allows the creation of completely new opportunities like launching an independent digital banking spinoff to compete with challengers. A spinoff is an agile 'speedboat' from the large and heavy 'cruise ship' that is the bank. It combines the best of both worlds; the resources and market experience of an incumbent with the technology and culture of a modern agile organisation. Spinoffs have significantly lower operating costs, are able to easily respond to customer demands and regulatory requirements and deliver better results in a shorter period of time, presenting new sources of income. This helps drive the established institution’s transformation journey and long term strategy.

Spinoffs represent a fundamental shift in the culture, operational approach and technology used by incumbent institutions, and can be launched in as little as six months. Building the architecture on which to launch a spinoff is quick and cost effective. ABN AMRO’s newly launched fintech New10 went from concept to launch in just 10 months.

The right technology means embracing Software-as-a-Service (SaaS) and cloud-based services. Rather than having to buy, build, and maintain an IT infrastructure of poorly-connected systems, SaaS allows companies to leverage services built on a flexible yet secure infrastructure. Initial costs are low and subscription-based with providers managing all upgrades. Applications are usually cloud-native and run on application programming interfaces (APIs) which enable the flow of information between applications, allowing business areas the ability to easily access customer data, draw insights and create innovative products.

New products or iterations of existing offerings can be rolled out, integrated and modified at a fraction of the cost and time it would take with a legacy system.

SaaS and APIs are defining characteristics of new entrants, enabling the iterative nature of their approach. The aim is to learn from each iteration and use it to create a better product quickly, one that is more closely aligned to customer, regulatory and market needs.
A composable, API-driven architecture makes this possible. The architecture can be divided in small pieces and managed through life cycles separately and tested, removed or replaced without risk, using best of breed providers.

Apart from flexibility, this composable approach prepares organisations for innovation and the next market shift. The digital banking space is dynamic and evolving at a rapid pace. Easily interchangeable building blocks make change and flexibility possible, instead of having an architecture built in stone. Institutions are able to identify opportunities, then quickly align products and services to capitalise on this opening, helping them navigate an ever evolving market.

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The future has a composable architecture

Banks have been forced to evolve and have begun launching their own fintech or digital bank. It is a trend we saw over the past 18 months and is just getting started. Spin offs like Goldman Sach’s Marcus and ABN AMRO’s New10 are helping to fight fintech with fintech. They are launching greenfield tech-enabled businesses to tap market opportunities and embark on a lower-risk technological evolution. Spinoffs draw on the resources and experience of the parent institution while operating independently, embracing the technology and culture of fintechs. They deliver significant results in a short period of time, free of organisational and technological legacy that holds back traditional organisations.

Digital spinoffs spurred a rethink of how to solve specific market, technological or regulatory issues. Spinoffs highlight another trend: strategic and surgical transition projects instead of long, expensive and risky enterprise-wide transformations. There is a movement to centralise control of the balance sheet but decentralise deployment of services. Flexibility of technology enables decentralised deployment by individual businesses instead of the whole organisation. With a modular or componentised approach, the business unit has more agility to innovate and deploy a myriad of services to address specific needs at lower risk and cost.

Potential lies in a combination of technologies as part of a wider value chain. Institutions are beginning to design their operating model and technology for change which involves an API-driven composable architecture. This allows them to adapt quickly and mix the right technologies for the biggest impact.

Platformification in the form of open banking and composable architecture will enable continuous and fast innovation for years. Instead of building in-house and propagating silos, institutions will connect more cloud-based services together, access more digital channels and services. If managed like a product, core assets can be reused, shared and monetised, extending the reach of existing services or provide new revenue streams.

More regulators are embracing cloud driven services, noticeably in countries that may not have previously had a public cloud footprint. Following regulators in the UK, France, Australia and Germany, those in Africa and Southeast Asia will continue to loosen regulation on public cloud usage. Supported by banks and cloud vendors, more software and services like information security, business continuity will be cloud-based and cloud agnostic which negates the perceived risk of cloud providers.

Key trends to track in 2019

Wondering how Mambu can help you get products to market faster, improve your business agility and elevate your customer experience?

We have all that covered in our live demo session. Join us as we walk through the Mambu platform, tour the partner ecosystem and show you why Mambu is the only true SaaS platform trusted by hundreds of financial businesses around the world.

Join us as we walk through the Mambu platform, tour the partner ecosystem and we can show you why Mambu is the only true SaaS platform trusted by hundreds of financial businesses around the world.