EXCLUSIVE: ‘Fast and flexible’ – Elliott Limb, Mambu and Nick Bennett, Tandem in ‘The Fintech Magazine’

The UK’s Tandem completed a core transformation last year with composable banking technology provider Mambu. Here, Tandem’s Chief Operating Officer Nick Bennett and Mambu’s Chief Customer Officer Elliott Limb share their thoughts on delivery-led culture, the innovation ecosystem and why not even neos can afford to stand still

Digital challenger, Tandem, entered the UK market in 2016, promising a new approach to banking. Targeting the gig economy’s younger demographic with app based money management tools, including an account aggregator and budgeting overview, it later added a cashback credit card and generous savings products.

Among the early cohort of neobanks, combining mobile-only open banking functionality with deposit and lending facilities was an unusual approach. But Tandem’s uncomplicated, fresh offer and simple user interface quickly attracted 950,000 customers.

Five years is a long time in fintech, however. Customer expectations, rival challengers and, indeed, the economy, have moved on dramatically. And, last year, Tandem began to adapt accordingly: it decided to dump the credit card, acquired green lender Allium Lending Group to offer new green savings and home loan products, appointing Allium’s CEO as its chief commercial officer… and moved away from Fiserve’s Agiliti core banking platform to adopt a Cloud-based, software as-a-service model. By striking a new partnership with composable banking provider Mambu, the aim is to shift the bank from being largely a consumer of technology services, to being an innovator in its own right, as Tandem repositions itself as ‘second wave’ challenger and ‘the good green bank’.

In a recent global webinar, hosted by The Fintech Magazine, Nick Bennett, chief operating officer for Tandem Bank and Elliott Limb, chief customer officer at Mambu, discussed how the right processes, technology and people can help to prioritise an innovation and delivery-led culture, and enable an integrated ecosystem to operate with a contemporary mindset. It was the first time the two companies had talked publicly together about the new partnership.

For Bennett, whose consulting and banking background has largely been focussed on taking companies through the scale-to-growth phase, Tandem ticks all the necessary boxes because it’s focussed, as Bennett describes it, on ‘doing something different… thinking about how you solve financial problems, how you manage finances from a consumer point of view, rather than from a bank perspective; and driving a service-based approach to banking, as opposed to the product-based approach many banks have’. Investors, who supported an additional £60million fundraise last spring, obviously agree.

Meanwhile, Mambu’s platform vision of composable banking means clients develop the banking experience best suited for them and their customers, without being tied to a specific vendor, product or technology. Unsurprisingly, Tandem ticks the necessary boxes for Elliott Limb, too. “This is a radical innovation, and we want to be there for the journey, at the core of it,” he says.

‘Business-as-usual’ in banking would be fine, according to Bennett, if it was working and meeting the needs of consumers. “I think it’s quite evident, though, when you look at how other sectors are being disrupted, that financial services is one of the last bastions of the industry still holding out.

So, for us to replicate business-as-usual would, I think, just be a bit of a failure.”

Despite the huge digital shift that challengers have already forced on the industry, for Bennett, that’s a job which is still only half done.

“I think the next wave is really about genuine disruption, genuine innovation, where you look at a very different way of servicing customers and break down some of the concepts of what makes up banking and financial services,” he says.

And that’s why Tandem chose the composable banking route. “When you look at the Mambu proposition, designed as it is in a way that’s very easy to use, very configurable, it gives you a lot of power as well as a low cost base.”

Explaining that proposition, Limb says: “We have a saying at Mambu, which is that banks were built to last; now they’re built to change. Banking has basically been driving with the handbrake on since it started, and, from an innovation and agility standpoint, we’ve got to move further forward.”

And the decision to let that handbrake off is entirely in the hands of the industry, says Bennett. You can’t blame regulators now for a lack of propulsion, although he acknowledges that when Tandem was founded the UK regulator’s distinctly lukewarm attitude to Cloud banking influenced its choice of stack.

“Fundamentally, they see Cloud now as an enabler to competition, and to supporting the disruption we’ve been talking about,” says Bennett.

The real business risk for challengers is slowing down, adds Limb, and that’s driven not just by the tech, but also by the culture they’ve built around them – the ‘connective tissue’ as one commentator has described it, with which everyone in the company is bound together. A collective culture allows them to  focus on the important things as one mind, so that the impetus for driving the company is bottom-up, not top-down.

“When you look at the way the neobanks are coming at it, (having) good tech (amounts) to probably a two or three-year advantage, but actually culture is probably a five-to-10-year advantage,” says Bennett. “While big banks are deploying a lot of cash, improving their digital propositions, culture is going to be a major inhibitor for them. And, along with some of the other, more practical considerations, what it will fundamentally drive is internal tension.”

When you build an ecosystem with a bank-centric culture, an ‘egosystem’ invariably emerges, says Limb. But if you get people to understand you’ve moved to shared strategies, values and outcomes, it isn’t simply their own culture, but a shared one.

“Co-innovation, co-technology is great, but it’s fundamentally about human beings and the way we operate together,” says Limb. “Driving it together is the only way innovation can happen in future, especially with shorter transformation timelines.”

The composable architecture on which Tandem is now scaling its business is a reflection of this new financial ecosystem’s collaborative nature.

“If you don’t have a strong tech platform and strong DNA around tech, in the next five years, as a bank, you’re going to find it really tough,” says Bennett.

“That was one of the fundamental things we recognised, which is why we’ve been on this journey to get that environment and capability in place. We knew, with Mambu, we had the right partner.

“We wanted to make sure that, at the core, we had a really flexible, very composable architecture that allowed us to innovate. We made that choice about 18 months ago, which is when we really started to engage with Mambu and others.

“The bank has built a new platform and  new product architecture, and is putting out a completely new set of services, of which Mambu is part.”

The timeframe was impressive: three months to get the first minimum viable product (MVP), built using composable banking principles, into customers’ hands, illustrating ‘how quickly we can move through the engineering and product lifecycle to get something out’, according to Bennett.

“We’ve also added in a completely new payment infrastructure, which is integrated over the Mambu platform, we’ve built up our new compliance tooling and a couple of new products on the mortgage side already, too. You can do that very quickly; in most cases, in weeks.”

The choice of such a fast, flexible technology that can keep up with the speed of ideas coming out of Tandem’s digital teams, reflects the rapidly-changing environment in which neobanks are now operating, says Elliott.

“People used to choose best-of-breed or best-of-suite technology. Now it’s best-at-time,” he says.

And, while Mambu’s composable model has proven super-quick at releasing successful products that help realise a bank’s strategy, it also means, of course, that a bank can change its mind just as quickly if necessary.

“It allows you to undo wrong decisions and, more specifically, remove the impact of making wrong decisions, because you can fix them quickly,” says Elliott.

He believes that standard five-year transformation programmes in banking no longer make sense, due to the uncertain times in which we live.

As Elliott says: “Who knows what a bank is going to be in five years. Do we even know what a bank is going to be in three?”

This article was published in The Fintech Magazine #19, Page 17-18