Analysis Featured

Leapfrogging Legacy Core Banking Systems

Mambu banking SaaS

What do you need if you are launching a lending or banking business? You need a way to manage transactions, pricing, payments, customers, and anything else that comes up. That means you need a reliable core system, but those traditionally are built for a specific bank. They are heavy, cumbersome systems that were time-consuming to install, configure, and run. It is difficult to change them because most legacy core banking systems take many months, or years, to set up. As the financial world moves faster with more services, channels, and scoring models, it needs an agile, API-friendly core system that can leap over the barriers and grow.

A Core Banking System is Like Bamboo

“Mambu” is the original Malaysian word for bamboo, the fastest growing plant in the world. If the conditions are right, it’s very difficult to stop bamboo from spreading and growing prolifically because the roots go under and over most barriers. Bamboo is versatile in what can be done with it and obtainable to anyone who can plant it. These characteristics are what a core banking system would need for the wireless economic reality most of the world moves in.

Mambu seemed like a good name choice for a name when Eugene Danilkis, Frederik Pfisterer, and Sofia Nunes started the company in 2010. They launched in 2011.

“We saw how fast tech was growing in other industries,” Danilkis said, “and saw a huge opportunity to build a SAAS in the financial space. It started with lending in emerging countries and evolved into business lending, leasing, and banking products.”

Mambu moved away from the legacy of core banking and desktop lending to offer a cloud-based SAAS platform that is versatile and obtainable.

“The same triggers are used to create different products and workflows,” Danilkis said. “So different customers can use Mambu in different ways. It’s basically a product that works the same way as an SME loan, consumer loan, or other complex structured deal. It sets up flows and data fields such as a lending piece, deposit/overdraft piece, manages customer data, tracks transactions, and more. And it’s all wrapped up in the API so the customer has access to all the data.”

The underpinning is the cloud infrastructure. Customers refer to the core engine to design service and essential data.

What Mambu Can and Will Do

Mambu is used in 40 countries now. Their main office is in Europe with regional offices in Miami and Singapore. There are two million active customer accounts with over three million clients served. The majority of 12 million euros funding was raised in their latest series B round last year.

“Now we have north of 3 quarter billion dollars from customers managed on the platform,” Danilkis said. “It’s building steadily. We’re looking for talent to help develop the product and interact with customers on products and sales.”

Typical customers are those who want to innovate around products. An established bank or lending company may want to bring a new product to market, but the need for new technology is holding them back. New businesses, or business units, may be interested in diversifying their product base.

“On the lending side, it came from the least attractive market segments,” Danilkis said, “Challenges came from microfinance. The rise of mobile tech and fintech made it easier to go after specific market segments who may have been poorly serviced before.”

The flexibility of the platform allows tailoring for specific customers and much more streamlined offerings. It enables clients to offer a better brand and user experience that attracts more customers and retains them. The client can build out a product that supports their business the way they want it to run and be flexible in terms of types of products, workflows, or support operations on specific products.

“We are transforming the old system.” Danilkis said. “In order to integrate around customers or credit scoring, the current tech is not good enough. We want to be more lean and stay competitive. We need to move quickly with changing technology and look away from the old tech.”

Author:

Written by Nicki Jacoby.

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