Crowdfund Insider sat down with Mambu CEO and Co-Founder, Eugene Danilkis to talk about trends in lending. Here are some of the insights from the story.
Is online lending, including P2P, marketplace and balance sheet lending, the most demanded service right now?
Across all lending verticals, consumer, business and marketplace, there is significant demand for digital and customer centric loan products. New technology, like Mambu, has enabled providers to meet this need which would historically have been unviable due to the constraints of legacy systems. The products they are now able to provide are better tailored to consumer demands, regulatory requirements and market needs. Consumers and businesses seeking credit are benefitting from more choice and better products as a result of this shift.
That being said, we have experienced a rise in demand from institutions looking to launch new digital banking services, offering both deposit and loan products. A range of providers, from traditional banks to innovative startups are seeking to leverage the speed to market and agility of technology like Mambu to launch new products, expand into new markets, start new ventures and transform existing operations. We’ve also seen a growth in institutions looking to explore a different approach and take a marketplace model similar to that of N26. They want to collaborate with product providers to offer clients a wider range of products and services.
Where do you see the most opportunity for growth going forward the next 12 to 24 months?
We are seeing a growing trend of established financial institutions looking to launch their own FinTech or digital bank. It's a concept we refer to as ‘launching speedboats from cruise ships’. These spin offs combine the best of two worlds, the resources and experience of an incumbent with the technology and culture of a FinTech. By 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.
An example of this is New10, ABN AMRO’s newly launched FinTech, which provides fast and fully digital loan loans to Dutch SMEs. New10 went from concept to launch in 10 months with the Mambu implementation taking just four months. Operating independently, New10 is unencumbered by traditional processes and systems, which allows them to move quickly, innovate while still being able to access the extensive experience available within the bank.
We have a number of other similar initiatives in our pipeline and we expect to this demand continuing to increase in the next 12 to 24 months.
There appears to be more traditional lenders (i.e. banks) more inclined to go it alone and launch their own platforms. Goldman Sachs launched Marcus which they developed in house. Is this a trend? Or an opportunity for Mambu?
As mentioned above, this is a trend that is gathering momentum and it is an opportunity for Mambu. This approach allows banks to attract new customers whilst simultaneously enhancing their product offering for their existing customer base. Additionally, banks launching spinoffs can apply new technology and operational models to new markets by leveraging the best available technology. They can then take these learnings and apply it back to the larger bank.
As a result of this approach, we see demand growing for SaaS engines like Mambu. Incumbent institutions are taking inspiration from FinTechs like N26. The business model adopted by N26 has delivered, their customer base has grown by over 500% in a year and they now operate in 17 countries. Incumbents seeking to emulate this lean and agile approach are seeking out technology with the same attributes to drive their spin off initiatives.
What about other types of securities? Have you considered the ICO market? What about cryptocurrencies? Are you facilitating BTC, ETH etc?One of our clients, a US-based lender, provides these services and utilises Mambu to allow holders of blockchain assets to leverage their holdings as collateral for cash loans. It is the first asset-backed lending platform to give blockchain asset holders access to liquidity without having to sell their tokens, basically traditional lending secured by non-traditional collateral. It is broadening blockchain technology’s reach by acknowledging financial wealth which is not readily accepted by traditional lenders.
And what about Blockchain? It seems like every bank in the world is moving to leverage Distributed Ledger Technology. Where is Mambu in this regards?
We strongly believe in providing functionality and technology that brings fundamental value to our clients. At this point in time, we see blockchain adding value only when it is distributed, i.e. the ledger is shared across multiple entities, which can validate the transaction before it ends-up in the blockchain itself. In context of where Mambu operates, which is servicing a single entity, such capability wouldn’t add any significant value to our clients in and of itself, hence we are watching this closely, but not planning to introduce it in a near term.
We do expect more of our clients to use blockchain technology in combination with cryptocurrencies and smart contracts while partnering with other third parties, and we can readily support these uses cases and their easy integration with Mambu.
To read the full interview, please visit Crowdfund Insider.