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Mambu

SaaS cloud banking platform

The digital conference centred on the important topic of how technology can be used to increase access and build new services for customers. Learn more about the takeaways in part one of the Q&A series below or 

 What are the big changes you’re seeing in the banking industry right now?

 There is a clear decline in the issuing of new banking licences. There is also less risk capital available for the whole fintech space due to the macroeconomic environment. Additionally, large incumbent banks are increasing interest rates and are in much better shape than before, so they’re often spinning up their own fintechs or spinoffs and stepping in that direction.

 Yes, we’re seeing this interconnected ecosystem of incumbent banks and new fintechs starting to grow together. You mentioned interest rates, what are some of the other specific changes that have happened in the past year?

 Banks came to the realisation that they must do something, meaning they must move much faster away from legacy systems to better serve the demands of their end customers. Demands from customers have changed, due to our situation in the past years with the pandemic. Banks see a need to accelerate to be more agile.

 When we talk about the acceleration caused by the pandemic, what is the measurement of that change? The banking and FI industry has experienced a lot of change in the past year, but how many years have we shaved off in the shift to digital?

Werner Knoblich

 People are more sensitive to what’s happening to their money. The time spent at home from the pandemic created much more demand, for instance we see this with wealth management. With zero interest on checking or deposit accounts, people realised they want to get smarter about their finances. This generates new demand, and banks and FIs need to find a way to serve this. As a result, there comes the acceleration of the need to deliver digital services much faster to end customers. The pressure is on, and also loyalty to incumbent banks is only decreasing.

 There are a lot of technological changes affecting people’s lives that come from other industries: online shopping, children’s schooling. How is the banking sector keeping pace with these new technologies in our lives?

: Very clearly, not fast enough. The reality is that the legacy core migrations are so difficult, and the situations the banks got themselves into makes it so they can’t move in an agile way. They’ve built up these monsters over decades with data centres that make it very hard to deliver something new and are inflexible. They’ve come to the realisation that they cannot easily migrate gigantic monoliths to a new system.

: Not too long ago, I had a conversation with a Fortune 100 bank, and they put the demand on us to state in their contract that they’re not allowed to customise the software. With Mambu, this is actually not necessary as we're SaaS-based, but the point is that they tried to protect themselves from falling into the trap of what they did in the past. The question is: how do they get out of it? A mass migration will take decades, so they need to see how they can chip away. Today's financial institutions need to provide new offerings without relying so heavily on IT resources. Product managers should be able to build something without needing developers to create these products. 

Learn more about Mambu's composable approach to banking and lending 

 or stay tuned for part two of the Q&A series.

Q&A with The Banker: Big scale migrations and the accelerated need to digitise

Consumers have become attuned to the benefits and advantages of technology in their everyday lives. In fact, it’s become an expectation that service providers leverage the latest technical innovations to deliver the most seamless user experiences. And there is no exception in banking and finance. Empathetic, or “human”, banking has become the latest trend in financial services by offering customers highly personalised products and services to meet their unique needs.



The motive of empathetic banking is simple: treat customers like you know them

Customers want the ‘Netflix experience’ - one where they are recommended a product they might love before they even know they want it. This level of tailoring has become a norm across many aspects of life. For banks, creating these types of experiences starts with building a personal relationship with the customer.

Our finances often align to our emotional lives, whether that be needing a mortgage to buy a first home, or planning a retirement fund for the future. In these cases, the personal, human touches from banks are where it counts.

Technology can’t replicate the empathetic interactions we get from engaging with an individual or a support team. And sometimes the human touch is exactly what consumers need. On the other hand, consumers tend to crave convenience. They want to press a button and have their issues resolved.

The hyper-personalisation of banking products can and should be as granular as any other offering, whether it’s a TV show recommendation or Amazon ‘must-haves’.

Through the capabilities of data insights, end users can get the experiences they want with minimal or no effort. We all know, consumers and banks alike, that data is a valuable asset, and in return for their information, consumers now expect a more tailored level of service. Embracing the data economy allows banks and other service providers to adapt their products and offerings to meet the needs and feedback of the customer.

Technology like open APIs and cloud-native solutions enable banks to leverage data to ‘level up’ their services and allow them to take action quickly when it’s needed. For example; by blocking a single suspicious transaction, rather than freezing an entire bank account, would tell a customer that their bank not only knows their spending habits, but that they are using modern technology to protect their money.

Some might say it would be an achievement in banking to reach the point where consumers never needed to speak to a human. But for this to happen, end-to-end customer experiences must be perfected, allowing users to get everything they need without the need to go into the bank or call the customer service line.

However, the biggest change for the future that I anticipate is that banks will take on the role of a financial advisor for their customers, rather than merely a seller of financial products. A bank's role will be to assist and advise customers on the decisions they make in their financial lives. This is where personalisation is key. Banks will become “financial friends” who know their users’ habits and preferences, and are no longer just trying to sell a product.

Creating hyper-personalised experiences in banking 

Years ago, a ‘Kodak moment’ referred to the capture - on film - of a significant and special moment that would never be forgotten. Nowadays however, since the devastating-but-completely-preventable collapse of the iconic photography giant, a ‘Kodak moment’ is used to describe the point in time when an organisation or leadership team fails to grasp the significance of a market shift, and suffers the very dire consequences. 

Executives at Kodak – the market-leading photography company for decades – refused to believe that digital photography would ever challenge traditional film photography, despite the company inventing the first ever digital camera. While it could have diversified its business and become a market-leader in digital photography technology, instead Kodak downplayed the impact digitisation of the medium would have, and subsequently suffered a spectacular collapse. Kodak’s story has become a cautionary tale of what happens when executives underestimate the impact of new technology, and refuse to change with the times.

Innovate and digitise or risk being left behind

Banks and financial institutions around the world are currently facing a similar scenario.  Having faced minimal competition for decades, many large and established banks have become complacent and resistant to change. If it ain’t broke, don’t fix it, right? But now, threatened by new entrants to the market in the shape of innovative fintechs and new challengers, incumbent banks are faced with two choices – either embrace change and new technology, or risk becoming another cautionary tale.

Across the Asia Pacific region in particular, the financial services industry has been experiencing a period of intense, transformative change, as mobile and API technology matures and becomes more reliable, and banks, fintechs and challengers begin to realise the size, scale and potential of the Asian market. However, while fresh-faced fintechs have been quick to take advantage of this new digital era, many legacy banks have been slow or reluctant to change, insisting on maintaining the status quo and shutting down any talk of digitisation.

What many of these legacy banks fail to realise, however, is that they don’t need to drop everything they’ve always done and change their entire way of doing things to capitalise on the digital revolution: it can be as quick and painless as launching a small-scale, low-cost, digital spinoff - a ‘speed boat’ - that they can send out to navigate the rapidly evolving market.

At Mambu we like to use the analogy of established banks being like cruise ships - large, expensive to operate, and slow to manoeuver, but with all the fancy bells and whistles. The digital spinoffs of these large banks are more like speed boats - faster, more agile and able to turn at a moment’s notice, but with no three-course-meal and a little less padding in the seats.

The speed boat needs to be driven by new thinking, new processes and, ideally, new leadership in order to forge its own identity. It also needs to operate much more like an agile fintech than like a traditional bank. Leveraging technology like APIs and collaborating with high-performing cloud and technology partners will streamline operations, automate processes and significantly reduce the overall cost of doing business.

To lead in banking and lending, you need to be able to seize the moment and quickly adapt to changes in the market. Download the Kodak moment guide and find out how you can avoid becoming a picture of failure.

Are banks in the Asia Pacific region facing a Kodak moment

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Kodak: Are banks in APAC facing a Kodak moment?

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.