The trends to track in 2018

Eugene Danilkis, CEO and Co-Founder, Mambu

The pace of innovation is transforming the digital banking landscape, with new technology driving the need for continuous evolution of products, regulations and experience.    

In addition to well documented competition from nimble new banking and lending entrants, traditional institutions face struggling business models, huge legacy costs, regulatory changes such as open banking and ever evolving consumer demands.

Incumbents Launching Fintechs Spinoffs
Prompted by these pressures, a growing number of established financial institutions are looking to launch their own fintech spinoff or digital bank. A flexible and agile speedboat spun off from the robust but slow parent institution or cruise ship. This concept of launching speedboats combines the best of two worlds: the resources and experience of an established institution with the technology and culture of a fintech. Operating independently these spin offs are able deliver significant results in a short period of time, free of the legacy technology and thinking which often anchors their parent organisations.

By harnessing the same technologies as their new competitors, traditional institutions are able to leverage API-enabled ecosystems to access best-in-class technologies and provide a unique digital customer experience.

This is a strategic move that allows institutions to swiftly enter new markets and geographies, test and change products and try new technologies at a fraction of the time and cost of large transformations. Learnings are fed back into the larger organisation, allowing them to gather market insight.

An example of this is New10, ABN AMRO’s newly launched fintech, which provides fast and fully digital loans to Dutch SMEs. New10 went from concept to launch in just 10 months.  

This growing trend has emerged over the last year and we expect it to gather pace in 2018. In an evolving landscape, a spinoff driven by new technology is the best response to market pressures and the need to find new sources of revenue. It is also a scalable model, we anticipate that once the initial speedboats demonstrate success, which they are able to do very quickly, institutions will launch more, moving an increasing amount of their business to the leaner and more agile model.  

More Than Monoline
Traditional players are not the only institutions turning to new technologies to help them grow. Many fintechs which disrupted the market with innovative but monoline offerings, now find themselves critically limited by their initial business model and internal development.

The bespoke technology that helped establish them is now holding them back as they cannot grow or scale any further on their current systems, and their initial niche market has changed or become oversaturated.  

As a direct result of their success, their business needs have evolved to focus on growth and diversification and their technology must also evolve in order to support these objectives.

To keep growing at the same pace as before, we see these fintechs seeking out new technology to help drive their journey and support their long term strategy. This is an opportunity for them to capitalise on momentum, focus on customer experience while leveraging best of breed technology to deliver seamlessly.  

API-driven ecosystems
Both fintech and traditional institutions are shying away from internal development due to the significant time and resource implications. Instead they are looking to build operating models with API-driven ecosystems at their core, taking a modular approach. This shift helps businesses to attain speed, both in execution and time to market as well as business agility, giving them access to the technology required to be relevant and competitive in an changing market. Why craft a architecture in stone, when you can build it with interchangeable blocks, replacing and connecting component parts as needed?

APIs give different business areas within an institution the ability to easily access customer data, draw insights and create innovative products tailored to consumer, market and regulatory needs. For partners or third party developers, they provide access to the core platforms on which they can develop more innovative products. End customers benefit from enhanced products, services and more transparency enabling them to better manage their personal finance. It also puts customers in charge of their personal information, putting more power in their hands.  

All of these combine to create a better user experience while giving both established institutions and fintechs their best opportunity to focus on innovation and the customer instead of ‘keeping the lights on.’


Eugene Danilkis


06 Innovation will continue to transform digital banking with a constant evolution of products and experience. Mambu CEO and Co-Founder Eugene Danilkis explores these trends which were published in Retail Banker International.

About the Author

Eugene Danilkis is the CEO and Co-Founder of Mambu, the entrepreneurial driving force behind the leading SaaS banking engine. Informed by his background in mission-critical systems technology, Eugene’s vision is powering Mambu’s rapid growth.