The banking industry and the wider financial services industry has been undergoing a digital transformation for a while. For instance, one challenge is offering a future-ready technology to help evolve via a SaaS banking platform.
Berlin-based Mambu powers digital-first banks as it helps plug in integrations for simple, streamlined and automated customer journeys, where it can configure and integrate instead of code and customise. Beyond its headquarters in Germany, Mambu has a presence in the Middle East and Northern Africa (MENA) region, which is undergoing its own digital transformations both from a wider economic development context and within the banking sector. Miljan Stamenkovic, the Regional Director in the Middle East & Northern Africa of Mambu, offers his insight.
Miljan has a rich history in helping banks and financial services providers implement digital solutions for their business and their customers. With over 14 years of experience in the banking, financial services, and insurance technology space, he brings an in-depth perspective in the areas of digital banking, customer experience, and omni-channel delivery.
For our global audience, can you explain what the digital and fintech landscape across the globe currently looks like?
As the digital world is gaining momentum, we see the proliferation of new digital banks and digital challengers across the globe. For the vast majority of existing and well established banks this rapid change can be perceived as an existential threat. But for some banks, whether they are startups, spinoffs and incumbents, change isn’t a threat at all. In fact they see change as a major opportunity to build new digital banking propositions.
They also take a fresh approach to it – instead of coding, they are configuring and integrating; instead of on-prem workloads, they are deploying in the elastic cloud; instead of major and disruptive releases, they continuously improve. Essentially, we see more digital banks and fintechs alike working as a tech company, rather than a bank.
How does this alter in MENA?
Digital challengers in MENA have a unique opportunity to operate like modern, platform-based companies.
Why is this important? This brings us to a competitive advantage that tech companies have. Their IT is typically organized around a set of platforms, run by accountable and lean digital teams. These platforms are each managed individually, can be swapped in and out, and when put together, they form the backbone of a company’s technology capability. This is why technology companies can get their products and services to market 100x faster than their industry counterparts.
This is what we call a Composable Banking approach. This approach has a big impact in two ways. It helps grow your top line revenue by rapidly acquiring new customers e.g. through account opening and personal finance, as well as your bottom line through SaaS and cloud operating models which can radically improve your cost to income ratio by applying lower capital expenditures.
How have you developed your subject matter expertise and helped to share it across in your home country? And with MENA?
Having worked as a consultant and a trusted advisor globally really broadened my horizons. By broadening my international and fintech experience, not only did I improve my ability to understand the needs of both legacy and neobanks, but I satisfied my need to absorb new ideas and stretch the boundaries of my knowledge.
This is where working with neobanks and fintech startups becomes increasingly interesting – there are no boundaries in looking at how to rethink a business model and employ cloud-based solutions and API-driven architectures to create an open banking ecosystem to drive your business. I truly believe in and enjoy working on projects where agility and speed is due to the absence of the burden of legacy technology. This is where you get the taste of what it would be like to create the next generation of financial services.
What are future trends and predictions you see happening in the region? And specifically with your company?
Local regulators, such as Abu Dhabi Global Market (ADGM)‘s Financial Services Regulatory Authority (FSRA) and Saudi Arabian Monetary Authority (SAMA) have started to provide an attractive home to fintechs, neobanks and digital banking attackers. Anglo-Gulf Trade Bank (AGTB), as the first bank in the United Arab Emirates (UAE) “born in the cloud”, has received a full digital banking license and Category 1 status from the FSRA of ADGM in 2019. Similarly, SAMA issued a new guideline for digital-only banks planning to enter the market in early 2020, as part of the kingdom’s vision to develop a digital economy in line with Vision 2030.
These and similar initiatives across the region are key enablers for rethinking and rebuilding the digital financial services business models. Innovative business models, especially when paired with progressive digital solutions, including cloud computing, API-driven architecture and machine-learning, challenge the conventional mindset with a disruptive and transformative approach to build the next generation of financial services.
Any advice or recommendations you would give to other future fintech companies and entrepreneurs based in the Middle East & Africa (MEA) region? Particularly with respect to fintech and the wider digital sector?
Launching a digital banking spinoff which can operate like a fintech or building a greenfield digital bank from scratch makes a lot of sense. There is a rapidly growing demand for new digital banking solutions to serve digital natives. While established and traditional banks take months and years to launch a new product, fintechs can design customer journeys and launch new initiatives in days and weeks. Hence, time to market, or even more importantly – time to value is key.
I would like to point out three key points in order to start generating and extracting value from your new initiative:
- Start small and launch just enough (e.g. basic current account, debit card, payment) to acquire early customers. The sooner you launch, the sooner you will be able to get feedback from your customers and start to improve for the next release cycle
- Partner with your regulator – progressive regulators in the region have reduced their initial capital requirements and provide sandbox environments (e.g. Digital Sandbox by ADGM) as an accelerator
- Build your composable banking architecture step by step – as you grow you will be able to swap in and out components that make sense for your business as you grow