This Is The Lending Landscape | Mambu’s Banking Insights for Growth

How customers are driving an embedded lending revolution.

In another edition of Mambu’s Banking Insights for Growth, David Ruis from Deloitte, Nathalie Werleman from Backbase, and Rashmi Sharma from Mambu discuss the big shifts happening in the lending space, driven by customer demand for speed and personalization.

The competition is greater than ever as newer lenders, with streamlined, data-driven processes, are going toe to toe with traditional banks. Embedded finance and real-time data are reshaping the industry, with customers increasingly being served through non-financial channels. So what will it take for the traditional institutions to stay in the race and how will customers experience lending in the years to come?

Read on to find out more and be sure to head to the Mambu website for the full lowdown on how traditional lenders can adapt to meet customer demands.

Speed, convenience and personalization are key

For the latest conversation in this series we gathered Deloitte Partner David Ruis, Nathalie Werleman, Regional Sales Director at Backbase, and Rashmi Sharma, VP of Engineering at Mambu, to uncover the evolving landscape of lending, particularly highlighting the influx of non-financial entities entering the market with innovative solutions.

This shift has enabled customers to access loans from varied sources, including online platforms, rather than traditional banks. The trend toward smaller, more frequent loans, particularly in commercial banking, is a significant change, offering a recurring revenue model that aligns with cash flow needs.

As we’ve noted in previous videos in the series, customer expectations around speed, personalization, and seamless experiences have increased, particularly as more institutions adopt digital strategies. This convergence of needs across personal and business banking is pushing traditional lenders to innovate rapidly to stay competitive. The challenge for these established banks lies in their legacy systems, which complicate the integration of new technologies and agile responses to market demands.

Embedded Lending is Here

Our guests continued speaking on the theme of embedded lending, where retail giants and smaller companies alike, offer loans at the point of purchase, transforming the lending process. This is a subsection of embedded finance, a growing technological development where financial services are seamlessly integrated into non-financial platforms. Customers now demand a comprehensive view of their finances, irrespective of where their money is managed or borrowed from, further pressuring traditional banks to integrate their services more cohesively.

The availability of real-time data has revolutionised credit scoring, making it more immediate and accurate, benefiting both individuals and businesses. The panellists agree on a number of tactics for staying competitive in the wake of embedded finance’s growth.

The advantage newer, more agile banks and lenders have is more streamlined processes and lower costs. One way traditional banks can adapt is through the launch of speedboats—innovative segments within the banks designed to act separately and drive modernization.

Staying on top of regulatory changes

The importance of moving swiftly was further emphasised in the conversation, as the market is rapidly evolving. Non-traditional competitors are gaining ground. Customer engagement and the ability to quickly approve loans (“time to yes”) were identified as critical factors for success and an antidote to current practices which often involve lengthy, manual processes.

Regulatory compliance is another hurdle. It remains a double-edged sword, providing established banks with a framework that can also hinder their agility. In contrast, newer players face higher compliance risks, potentially leading to lawsuits, yet they can innovate more freely. The discussion concluded with an acknowledgment that collaboration between traditional lenders and new entrants could be mutually beneficial, leveraging each other’s strengths to navigate the changing landscape effectively.

It’s an excellent addition to the series, and shows the insights you can gain when three experts engage in a conversation like this. Stay tuned for more from Mambu’s Banking Insights for Growth.