Sign up for the latest news

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

Mambu

SaaS cloud banking platform


This does not necessarily mean that fintech companies will dominate and traditional banks will be left behind. Instead, this change provides an opportunity for traditional banks to improve and better serve their customers by being more available and responsive to their needs.



Developer experience drives customer experience

The drive for speed, innovation, and growth is causing CIOs to balance conflicting demands for talent, time, and money. They must hire top engineering talent, including developers and architects in large numbers to build, manage, and grow their technology-based businesses and allocate that talent to customer-focused activities. 

At traditional banks, developers only spend about 32% of their time writing code, with most of their time devoted to maintaining infrastructure and upgrading systems, rather than developing new software using standard APIs. Having to spend days fixing issues rather than building exciting products your internal teams believe in, leads to a less motivated workforce. It comes down to creating an environment that gives agency to each individual and implementing tools internally that enable teams to make a tangible impact.

Unfortunately, a significant portion of bank IT budgets, around 70% are spent on maintaining legacy systems, reducing the CIO's ability to invest in new innovation. Finally, CIOs must transform their operations to deliver new offerings and innovations quickly to meet the demands of stakeholders and customers, who have limited patience. Studies of companies such as 

 show that neobanks and fintechs are twice as fast as traditional banks in bringing new features to market.It’s clear that the biggest difference in teams is the psychological mindset. 

Banks believe in products. At any incumbent bank you’ll find a ‘Head of Mortgages’, ‘Head of Credit Cards’ and so on… these employees will be thinking of the same customer but in different ways based on the product they want to sell. This is very far away from the hyper-personalisation that really grips customers.

In an ideal hyper-personalised world, banks would act as a personal CFO and place themselves in the customers' financial life. But we’re not there yet.

Like the most successful technology and digital companies, banks too, need to sharpen their client focus and listening abilities. They must get a deeper understanding of their clients in order to pinpoint their unique demands and develop more specialised offers to meet those needs. A disciplined and iterative strategy should be used, concentrating on certain customer segments with a small number of key use cases that are swiftly introduced and scaled progressively.

How can SaaS banking platforms and fintechs help?

Organisations like Mambu are technology enablers; before we can help there needs to be a cultural shift. We can provide the tools to help incumbents create these experiences for customers.

At Mambu, we recommend a three-pronged approach to technology modernization for banks.

Using best-of-breed, cloud-native technologies, create a composable architecture first. This will enable the bank to swap components in and out as necessary.

Offer a platform geared towards developers with a standardised set of adaptable APIs and programmable code so that developers can quickly build and deploy new products without the need for complicated integrations, training, or personnel.

Automate extensively throughout the build, test, and deployment phases, utilising tools such as continuous integration and continuous delivery [CI/CD] and incorporating DevOps principles.

This approach allows top engineering talent to concentrate on enhancing the customer experience and doesn’t require hiring a large number of developers in a competitive job market.

In addition, banks can benefit from substantial reductions in IT operating costs, up to 

. Instead of spending on IT, CIOs can invest in technology that generates revenue and retains and cultivates their best engineering talent. They can also innovate rapidly, delivering new functionality up to 95% faster than conventional development methods, when introducing new products or modifying existing ones.

This way, they can gain a significant advantage in the market while satisfying customers and improving the overall banking experience for everyone.



How incumbents can win in a digital ecosystem

The rise of neobanks 

Although born in the digital age, neobanks are relevant not just for this but also because they are fundamentally human first businesses. By working backwards and focusing on incrementally improving customers’ daily financial experiences, banks became trusted advisors. This came to the fore especially during the pandemic when customers' needs were acute and urgent in a very uncertain period.

Customers needed that human touch from banks more than ever and neobanks stepped up at this challenging time. For example, Starling Bank offered secondary cards to support self-isolating customers, not with profit in mind, but simply because it was the financial support they needed and the right thing to do. By rapidly deploying new services whilst providing a helping hand, customers felt seen, heard and valued.

But I believe there’s still room for improvement. The number of users who have their primary account with neobanks is still fairly low, likely due to mistrust and inertia. It could be that neobanks are still a new concept to most or just that customers have long-standing loyalty to traditional banks. Whatever the reason, customers are still turning to incumbents for bigger deposits and transactions. However, with financial inclusion becoming a priority, we can expect neobanks to increasingly sway and appeal to younger banking customers.

Savings and credit is another area where neobanks have not yet hit the mark. Given the speed and agility of neobanks, it’s surprising that loan services haven’t become dominated by digital banks and lenders. Customers don’t need another credit service as it’s been done before, neobanks need to utilise their agile structures and pursue high growth niches in need of innovation.

Where do incumbent banks fit in the picture?

Incumbents have earned a seat at the table, but for how long? Are incumbent banks really winning back customers or is it just a draw to the free money that many are rolling out.  To remain competitive, banks must offer financial incentives that come from the right place, as illustrated by the Starling example during the pandemic.

The issue isn’t how, but rather why. Incumbent banks need to change their mindset from managing risk and balancing books to making customers' financial lives better. Neobanks understood this, while incumbents were slower to adapt.  They remain competitive by replicating financial innovations, but it can only go so far. Until they shift towards customer-centricity, neobanks will continue to increase their market share and win-over customers, particularly young banking consumers.



Kunal Galav, Global Head of Partnership Development & Head of Advisory, EMEA, Mambu

Sam Everington, CEO of Engine, Starling Bank

Sarah Kocianski, Fintech and Insurtech Strategy Consultant, CCG Catalyst Consulting Group

Neobanks, the next wave

Rishi Khosla

To address the structure void, Khosla and Perlman created OakNorth Bank. It is a bank by entrepreneurs for entrepreneurs that lends to fast-growing SMEs via a fintech platform and fully cloud based operations. Of course, it’s not only UK SMEs that lack access to funding and are hampered from growing their business. In developing countries, the situation is more acute: despite being the backbone of most economies, about half of the estimated 400 million SME’s in these economies have unmet credit needs totaling about 2.6 trillion USD.

SMEs are widely referred to as the ‘missing middle’. With long-term financing needs of up to 2 million USD, they are too big for microfinance institutions and too small and risky for banks: MFIs find themselves often ill-adapted to serve larger clients that require more complex products and credit assessment. Banks, on the other hand, consider SMEs to be risky and costly clients to acquire, underwrite and serve. SMEs often do not have the necessary systems in place to provide transparent information to investors or lenders. And they also cannot supply the high collateral requirements that banks require for higher operational risk.

However, this state of affairs is now changing with the digitisation in SME finance. On the supply side, lower costs and the rising use of smartphones are helping SMEs produce transactions and accounting information more efficiently. On the demand side, that new data plugs into better analytic and processing capabilities in financial institutions. This drives the spread of new data-driven intelligence and lowers transaction costs to acquire SMEs, and to serve them. The greater digital footprint of SMEs has led to a proliferation of technology-focused SME lenders, like OakNorth Bank, that focus on new data and analytics to decrease costs associated with loan origination and collection. At the same time, new partnerships between banks and fintechs are starting to emerge. They allow banks a fast and convenient way to innovate their product offerings and better serve their SME customers, and fintechs to gain access to the banks’ large customer base and existing infrastructure.

Digitising SMEs’ finances holds massive potential, both for SMEs and SME lenders. It proves that SMEs are a profitable business opportunity. OakNorth Bank was able to break even after just 11 months and within two years of operations has grown its loan book to over 800 million GBP. Recently, they have reached the unicorn status, being valued at over 1 billion USD, faster than any other fintech in the European banking history.

More on Banking

Reaching the missing middle - technology is closing the SME gap

Before N26 was granted a full banking licence in July last year, it used the services of a partner bank and then migrated to its own platform in late 2016. Since then their customer base has grown by 500%, helping them reach the 500,000 customer mark in August 2017.

“Mambu allowed us to cut our core operating costs drastically by minimising our IT resource requirements, helping us create the FinTech hub to meet the needs of our experience focused customers,” said Gino Cordt, Chief Technology Officer at N26. “Mambu’s ease of integration, flexibility and time to market has helped us to give our customers an unrivalled, technology-driven mobile banking experience,” he said.

The Mambu implementation went live in October last year and enabled N26 to migrate all of its customers over to the bank. Mambu’s current account and overdraft functionalities were also enhanced to support the bank’s transactional needs. The solution’s SaaS model and regular release programme means all of their customers benefit from these enhancements.

“Mambu is excited to be working with N26 as they are realising the true potential of mobile-first banking,” said Eugene Danilkis, co-founder and CEO of Mambu. “By putting customer experience at the centre of their strategy, they have created an app which gives their customers a truly simple banking experience. This is a great example of how retail banking can be redesigned in the 21st century,” he said.

N26 also launched a loan product on the Mambu platform in February 2017.

Mambu helps N26 transform operations

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.