EXCLUSIVE: “Banking in the Cloud – power and possibilities” – Karen Mae Ching, AWS; Will Sorby, N26 and Justus Roux, Mambu in ‘The Fintech Magazine’
Composable banking technology provider Mambu joined a number of partners with whom it works on building services for SMEs to discuss how banks can create a proposition that ticks the all right boxes for businesses hungry for change
Karen Mae Ching, Global Financial Services Partner Sales Program Lead with Amazon Web Services (AWS), Will Sorby, Director of Product at fast-growing German-based challenger bank N26, and Justus Roux, Solutions Engineering Manager at Mambu, on why the Cloud is indispensable to the new banking model
THE FINTECH MAGAZINE: What are some of the advantages of being able to scale up using Cloud-based banking, versus an on-premises server?
JUSTUS ROUX, MAMBU: There’s running the bank and building the bank – and I’m using ‘banking’ here very loosely; it can be any financial organisation. Running the bank is about the day-to-day operations, and building the bank is about the innovation and new products.When it comes to running the bank, we want to have the processes that are best for the bank’s client. So, you might have one who only swipes their card after payday, because they are a cash user. When they go to the ATM, they want to be able to get their money. But, for the bank, it’s about managing demand. If all their transactions happened on that same day, there might be long queues, and the worst thing is for the system to go down, so that customer won’t be able to get their money.
This is where Cloud banking comes in: it gives banks the ability to manage peaks and troughs. Without all the cost that you incur with on-premise, you can give a better end product to that customer, so that customer always has their money. Leveraging Cloud services to achieve scalability is an excellent example of how you can keep yourself relevant.
WILL SORBY, N26: I’ll pick up on building in the Cloud. By working with others who have done the same is effectively how we build a bank through APIs. That’s not super complex, but the fact that we’re able to do that means that we can focus on what we build ourselves that brings value. What do I mean by that? If we were the first bank in the world, and the only one, we’d have to build everything. The number of people you need to do that,comthe scale of that task is huge. Now, there’s a lot of things out there that already exist today, that other people have done, other people have done very well. And that may not be the stuff that we can do best, but it may be something that our users want.
We work with Wise, for example. Those guys do a great job on international transfers at super rates. Why would people not want to access that? It may be that we could build it ourselves, but that may take us two years, and I would sooner our users are able to access it now.There’s such a rich ecosystem of people out there. Whether it’s product features or even infrastructure services that we use in the background, there’s quite a few different partners that we work with, in different parts of the bank. It just allows us to be much more effective with our time, so we invest it well.
TFM: Digital-born banks start with a clean sheet, but what are the critical barriers to moving a legacy bank to the Cloud?
KAREN MAE CHING, AWS: In regulated industries, the reason there’s an attachment to on-premise systems is that they’ve existed for more than 50 years. So we don’t say ‘you need to migrate everything tomorrow’.We do it one step at a time by asking what workload, or particular unit of your business, is critical to move now. It’s more than digital transformation; it’s really change management. At the end of the day, you’re also selling a change of culture and mindset in ways of working. There are four components to that. First, you need to have that executive sponsorship, because it’s a strategic move for everybody. Second, you need to understand how operational excellence will be maintained or exceeded. The third component is the organisation: how do you train your end users to adopt this new technology? And finally – but by no means least – how do you measure the milestones? Again, you don’t boil the ocean, you measure your projects in chunks. If you take a big-bang approach, it just give you short-term success. What we want for our customers is long term, so that it’s iterative, continuous innovation. That’s the approach that we have for the kinds of customers that we have.
This article was published in The Fintech Magazine Issue 09, Page 54
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