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Exclusive interview with Miljan Stamenkovic, General Manager, Mambu

Tech Leaders

TECHx secured an exclusive interview with Miljan Stamenkovic, General Manager, Mambu to learn about 2021 cloud trends in banking and the challenges driving the adoption of FinTech in Islamic banking.

TECHx: What cloud trends do you see in 2021 as a result of the pandemic?

Miljan: While cloud banking has been on the precipice over recent years, the perceived technology risk has prevented this from being implemented in any significant way. However, now the business risk to not implement cloud technology has overtaken this technology risk. This is primarily as a result of two elements: 

1 – COVID-19 has created uncertainty. Banks have had to adjust processes and policies overnight in response to changing regulations and customer requirements, which legacy, on-premise systems were not built for. We expect to see the uncertainty created as a result of COVID-19 continue even beyond the crisis, leading banks to navigate blindly on how to proceed. This has emphasized the need to have a system that allows banks to pivot quickly and smoothly.

2 – Cloud technology is essential to banks competing and surviving in this new era. While this shift was always inevitable, developments in 2021 have made this a non-negotiable and as a result, we will see widespread adoption of cloud banking in 2021.

TECHx: What are the big technological or customer experience changes you foresee in the banking industry over the next couple of years?

Miljan: The move away from customer-centric banking was so gradual that we barely noticed it. There was a time when having a personal relationship with your local branch manager who you meet with regularly, understood your finances and gave you advice was commonplace. Digital technology changed this, focusing on convenience, increasing competition and making the mobile customer experience the key differentiator. While these advancements have benefited customers in many ways, in some instances it has placed the emphasis away from the customer-centric model which once defined banking.

The emergence of COVID-19 made this increasingly apparent and highlighted that there is still a need for relationship banking, particularly for vulnerable and non-digital customers. The crisis impacted many people’s financial stability and gave rise to many questions on the support available to customers. Furthermore, customers availing from banking services during this time that typically required face-to-face interaction, such as mortgages, were now moving through this process digitally.   

At the same time, we reached a critical mass of new entrants. Banks are now faced with having to adjust and ward off competition, while also maintaining the relationship with customers who favor traditional banks and processes, as well as those who prefer digital banking.

COVID-19 has emphasised the different needs of customers depending on their situation and demonstrated the importance of focusing on bespoke and personalised services dependent upon customers’ individual needs and wants. We will see a return to relationship banking in 2021 as a priority, but now combined with the convenience and benefits offered by digital banking. It’s a delicate balance, but employing the right technology will be critical for banks to deal with customers in the right way, according to their expectations.

TECHx: Could you brief a little about the approaches you’ve taken to integrate cloud in the region’s banking and financial services sectors?

Miljan: Mambu was launched in 2011 with the vision to enable access to modern financial services for all. We make this possible by providing a modern cloud-native banking platform that not only competes with core products from traditional players, but changes the market through our composable banking approach. We’re bringing SaaS to banking at a time when it’s needed the most. Across the globe, our clients range from top tier to leading venture-backed fintechs and telcos. We enable them to build a “digital attacker” in the cloud, by composing a best-for-purpose solution for their needs which is an order of magnitude more agile and cost-effective than the legacy approach to core banking.

TECHx: What are the biggest challenges driving the adoption of FinTech in Islamic banking?

Miljan: The fact that millennials make up a large chunk of the customers of Islamic banking means that they will also direct its growth. A recent study conducted by Alvarez & Marsal Middle East predicted that the younger generations will contribute to about 75% of banking revenue in the region. Sharia-compliant banks are stepping up investments in digital space to cater to this demographic.

Similarly, the majority of the Muslim countries’ population is dominated by millennials. Not only are they very well educated when it comes to the use of technology, but they are also driving the qualities of a fast-paced life. Millennials are looking to partner with banks that are easily accessible from anywhere in the world; They want services that can complement a lifestyle that is driven by increased mobility. This also means financial institutions need to provide flexible banking solutions to fit into this way of living. Islamic banks should see this as an opportunity to enhance their services by tapping into and addressing the demands of this tech-savvy customer base for greater transparency, highly-personalized products and seamless experiences.

To succeed and grow, a modern technology stack must lie at the heart of financial service companies. That said, the region’s initiatives that drive digital transformation are causing banks to face technical debts, a phenomenon used to describe technology solutions that have become non-functional and outdated technology. Digitization has disrupted the current business models of Islamic banking. They are now facing a need to upgrade their technology, adapt agile ways of working and modernise their legacy systems as unresolved technical debt can lead to excessive costs and compromised business agility.

According to Thomson Reuters, Islamic banks typically have higher fixed costs as compared to conventional banks and digital solutions can help reduce overhead and allow banks to compete more effectively. For example, technology can effectively help in automating workflows, operating on an omni-channel system and enhancing mobile services. In fact, being digitally present and easily mobile is becoming a necessity for banks to survive in today’s competitive world.


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