Cloud-native banking platform Mambu recently hired Johanna Pugh as its new managing director of North America. The appointment comes as the software-as-a-service (SaaS) company looks to expand its presence in the U.S. and Canada.
Pugh, who has 20 years of experience in fintech, previously worked for Finastra in London, before relocating to Dallas. Pugh will split her time between Texas, Miami and New York, where Mambu has offices.
"I'm advocating to spend more on the people than have lots of overhead for offices at this point," Pugh told Banking Dive. "Right now, not many people are going to fly to your office anyway. So, for the time being, we're pretty much virtual, but we'll definitely be spending a lot of time in New York, since it’s a huge financial sector and we have a lot of clients there already, and we have a team there."
Mambu’s clients include Dutch bank ABN AMRO, Spanish bank Santander, small-business lender OnDeck and neobanks N26 and OakNorth. The company was founded in 2011 and has offices in Amsterdam, Berlin, Singapore, London and Iași, Romania.
"Now, more than ever before, cloud-native and agile platforms are needed by financial institutions to bring new products to market and evolve their existing offerings," Pugh said.
This interview has been edited for clarity and brevity.
BANKING DIVE: How does the North American market compare to other areas where Mambu has a presence?
JOHANNA PUGH: The North American market is a tough one for core banking. It's monopolized by two or three really large fintech companies that are pretty well established with legacy systems. It's pretty much a bit of a monopoly, to some degree, and it's very saturated from a core banking perspective.
It's always tough for an international company to try and come into the American market and make a presence or provide a service that is pretty well locked up by three large players: FIS, Fiserv and Jack Henry. You've seen folks like Oracle come into North America, as well as Infosys and Temenos, and play along the fringes. But what’s interesting about the North American market now, they've got to do something different. They can't do the same thing over and over and expect different results.
The banking institutions are now looking to take on digital transformations and initiatives, and we’re even seeing bank philosophies that are driven by modern technology. They're actually starting to put not just their toe in the water but their feet in the water because they have to do something different. And it's kind of been converging toward that for the past year or so. And right now it's even converging more rapidly after COVID-19.
How have Mambu's services evolved over time?
PUGH: For the longest time, we basically worked with organizations that may be financial institutions that were focused on lending — small to medium enterprise commercial retail lending — and we've played the core banking platform for that. Folks like OnDeck Capital, ODX and EZcorp.
Because of the agility of our technology, we were able to quickly say, "If we can do this for lending, then let's look into banking. How can we make the shift and use the same technology, but be able to make it extensible to other avenues of a bank?"
And since then, what's happened is you see these neobanks popping up all across the world, the N26s and OakNorth out of the U.K. You see all of these new dynamic shifts in banking to not do the same thing they always did but deliver something to folks that they can access via the phone, or just the internet in general. The nature of the cloud technology that we put out there gives these organizations the ability to quickly launch new products, programs, and be agile with their growth in their market, agile in their thought and evocativeness.
Now they can do things they couldn't do before and make changes within hours. It allows them to take what I would consider a speedboat approach and really accelerate what they want to do.
Are all banks adopting cloud technology?
PUGH: Every bank out there has some shape, form or fashion of cloud enabled technology. They absolutely have to in order to function, even if it is as simple as Salesforce.com. It allows them to free up technical resources from the tiniest banks to the biggest banks.
What you saw probably about five years ago is a shift toward innovation labs. And in those innovation labs, banks would play around with new cloud technologies, new little fintech offspring. A lot of them even invested in some of those smaller fintechs to do specific bespoke one-off type things for them. The larger banks have been playing with innovation labs for five to 10 years, especially the top 50 in North America. Based on playing around with it, they've gotten a little bit more comfortable with it.
In North America, banks are starting to make that leap. The other thing too is, you've got these three big players, from a cloud perspective, Amazon Web Services, Microsoft Azure and Google Cloud, and they're really actively trying to get the financial institutions and the banking organizations in North America to get up and go on it, as well. And we're partners with all three of those.
How has the coronavirus pandemic affected your clients?
PUGH: Probably about 50 [percent] to 60% of our customers affected by COVID-19 in the North American market had to quickly figure out what they were going to do from a market shift and the [Paycheck Protection Program] process. For our customers, it was just a matter of working with them to configure what they already had. … Organizations needed to configure the [Small Business Administration]-backed loans. It takes a lot more paperwork and a lot more manual processes. And we worked with them to streamline it.
But a lot of other organizations couldn't. They weren't quick enough, they weren't agile enough to be able to make the quick changes needed to be able to help their market.
Have you gained new clients as a result of COVID-19?
PUGH: We've seen a combination of newer clients, but also existing clients wanting to expand in their market. We probably have 15 or so prospects a week. Before COVID, it was probably five a week. So it's changed that much. Since COVID, folks are using this time to really accelerate projects.
Have any clients pulled back on projects as a result of coronavirus?
PUGH: Not at all. It's not just cloud technology. They know they have to invest in technology in general. They have to, or they're going to get gobbled up. Even the big super-regional banks, if they don't do something, they're going to get gobbled up or they need to consume others to grow. Cloud technology enables them to do that in a less costly process.
Some of your clients are neobanks. Why do you think we’re seeing so many of these fintechs popping up now?
PUGH: Because the banks can't offer those new products quickly and easily, and [neobanks] can.
One of our customers, EZcorp, they don't really do payday loans as much as loans paid on a pawn shop. Someone will come in and put something in the pawn shop and they'll open a loan for them for that amount of money to come pick it up within 30 of 60 days, or they don't pick it up at all.
For them, expanding into new markets, it's easier for them to open up that line of credit to an individual than it would be for a bank. They have lesser regulations on them than a bank or credit union would have. And so it's easy for them to quickly get into the market because they already have the client base and now we just need to offer new services to them.
What will be the biggest challenge for Mambu as it looks to expand in North America?
PUGH: We've got to prove to the market that we have the compliance that it takes and the ability to have our team scale to what the North American market needs. Compliance is big in North America because of all of the regulatory requirements, and it's not only at the U.S. level or the Canadian level, but it's often with the state or province level.
We have to be really diligent about how we work within the confines of that. It's up to us as Mambu to be the proof in the pudding and show the organizations that we can work well together.