Situation
The impact of the COVID-19 pandemic, competition from Big Tech and Fintech, and shifts in customer behavior were accelerating the digital transformation of the banking industry in Vietnam.
In early 2021, the State Bank of Vietnam issued Decision 810, setting clear objectives for digital transformation in the banking sector. The aim was to develop digital banking models, enhance customer experience, and achieve sustainable financial goals through the application of new and advanced technologies. By 2025, at least 50% of banks’ and financial companies’ disbursement and lending activities for small and consumer loans to individual customers were to be digitized and automated, with target increasing to 70% by 2030.
To achieve these targets, a significant increase in digitalization among banks is essential, positioning digital banking as a promising sector in Vietnam.
At this critical stage, German tech unicorn, Mambu, entered Vietnam’s digital banking market and introduced a new “Composable Banking” architecture.
- Traditional Banks encounter significant challenges in adapting to the evolving landscape due to their monolithic and modular architectures.Their systems can be likened to a Rubik’s Cube: No matter how you twist it, it remains a cube. This analogy highlights traditional banks inflexibility, and slow, and difficult to scalability, causing prolonged product development, impersonal services, and costly system maintenance.
- In contrast, new generation banks follow the Open Banking model, utilizing modern 4th generation core banking technologies such as Cloud, Microservices, AI, ML, and Open API, alongside the Composable Banking architecture.
Composable Banking Architecture resembles a Lego set, enabling banks to be flexible and innovative by assembling and combining components in unique ways within a ready-made cloud solution. This approach allows banks to operate with agility, significantly reducing the time to market for new products and services to just a few days or weeks, while enhancing customer personalization.
Challenges
The concept of “Composable Banking” was relatively new and difficult for the Vietnamese market to grasp. Additionally, the digital transformation of banks raised concerns about costs, the availability of IT personnel, and cybersecurity. These concerns were amplified by the fact that many local bank CEOs did not fully or accurately understand digital transformation in the banking sector.
In that context, Mambu faced the challenge of effectively positioning the brand with local financial institutions while its messaging could be deemed too technical and perplexing.
Pioneer’s Approach
Upon entering the market, Mambu engaged Pioneer to gain a first-mover advantage by introducing Composable Banking and positioning the brand as a market disruptor.
We utilized soundbites and analogies to craft engaging, easily understandable content that resonated with the target audience. Thisapproach allowed us to address banks’ concerns while clearly communicating the benefits of Composable Banking which included:
- Fast and Flexible: Composable Banking operates on fourth-generation core banking technology, applying AI, big data, cloud computing, blockchain technology, the Internet of Things, and API communication methods. In the market where fast fish eat slow fish, this model allowed banks to be flexible, fast, highly personalized, and easily scalable in response to fluctuating demand.
- Cost-Effective: The Composable Banking architecture helps banks reduce IT staff by 35%, decrease time-to-market for new products by 80%, and the flexible “Lego-like” structure simplifies the application process, with a return on investment that is four times faster than traditional technology.
- Safe and Secure: Composable Banking offers a secured “vault on the clouds” for banks. Operating on a SaaS platform and ensured by the best cloud service providers, this level of data protection is challenging for traditional technology infrastructures to achieve.
Mambu cloud banking platform and Ecosystem: Integrations to best-for-purpose partners
Integrating with best-for-purpose partners was key to this communication strategy. Pioneer chose specialized media and mass media with strong Banking–Finance Columns to effectively reach the target audience.
Results
Mambu Vietnam and GM Pham Quang Minh have been featured as experts in banking digital transformation in Vietnam, with over 20 bylined articles and dozens of interviews, quotes, and mentions of the Mambu brand in various top-tier local business media outlets.
Mambu attracted media attention when participating in exhibitions and discussions at the “Retail Banking and Digital Transformation Strategy 2022” exhibition and the High-Level Forum on Digital Transformation in Banking with the theme “Banking Industry Actively and Pioneering Participation in the Fourth Industrial Revolution,” also held in 2022 in Hanoi.
Mambu has been appointed as a trusted partner by Timo – Vietnam’s first digital bank, TNEX – Vietnam’s first digital-only bank, and Cake – the first digital banking solution attached to a ride-hailing app in Vietnam.
