Hi Scott, great to see you at Cyboss here, great to be back in person at this big event for the first time in three years. How have you found the show so far, what have you been looking forward to and what are you expecting to see for the next couple of days?
Yeah, thank you, good to be here and it's my first day, although it's day two, it's been great to just be back in person. There's a lot going on in the environment outside and around us, all matters of industries are being impacted and what I'm really interested to take away is the notion around different types of institutions, whether it be neobanks or traditional banks, discussing the way they introduce a high velocity operating model into their business. So how are they building agility to really be innovative and create customer experiences on a monthly, quarterly basis, not necessarily large scale transformations over the number of years. So I've already had some conversations today, there's been an interesting panel that may be recorded and worth watching.
Awesome, that sounds really good. You talked about customer experience, now we did some research over the last few months where we were talking to over a thousand banking leaders about their priorities on both experience and operational transformation. Clearly the number one priority for them when they're thinking about how to revolutionize and transform their businesses over the next three years is core banking modernization. That's where they're going to be investing and one of the drivers of that is customer experience. So what are you seeing from your clients and what they're focusing on, what they're prioritizing in this space?
Yeah, I think it's breaking into two parts, so traditional banks and then the neo banks. And if you look at the conditions that are impacting them, traditional banks today have typically been around for a number of decades. They have deep pockets, capitalized balance sheets, corporate governance structures, multiple revenue streams. But what they're lacking is that cultural agility around the tech agility, people ability and agility to bring new products to market at pace. So I think the question for them and what we're discussing with those types of institutions is the need to build and refresh their operating model. So when we talk about core banking modernization, does it need to be a full end to end transformation or can it be business line by business line or maybe it might be a spinoff. So that's the traditional banking segment and it's about creating that innovation snowball, progress and seeing progress and letting that permeate across the organization. And then when we think about the neo bank segment, it's almost the inverse, right? So over the last 10 years, this is probably the first economic shock they're experiencing and they have grown the top line very quickly. But that's been funded through the external markets where there's been a high supply of capital at relatively low cost. That's kind of closing up a little bit and getting more expensive. So therefore they're being challenged on the path to profitability. But they do have that agility to bring new products to market quickly. So the question for them is what's their strategy to continue top line growth but bring that profitability in? The reference point that you may also have is at the beginning of COVID there were 200 neo banks, there's now 400, only 5% are profitable. We can talk about a platform again there to help them be agile and most of them are only operating revenue lines or interchange fees. How can they diversify to a lending platform or a lending engine which allows them to build interest and earn interest? That obviously comes with complexities about managing a loan book risk and cost of income ratios. But these are the types of conversations we're having with both sides of the sphere.
Awesome, super interesting. And Mambo's technology is enabling them to make this change and you can look at it from different ways from an incumbent bank's perspective or a neo bank's perspective. How is your technology really enabling them to make this change?
Yeah, sure. And I guess it can be applied in different ways to different types of customers. We are agile. The key aspects of our platform are the SaaS cloud native approach. It's really down to our configurability. So when you look at new, let's take an example of COVID. When COVID hit, personal incomes were squeezed but so were revenues at SMEs and therefore the disposable income to repay your loan was challenged. We don't want to see a default. So we listen to our customers, the market within three weeks, we'd created a COVID payment holiday. That was then pushed to all of our customers and they could then deploy that as they wished. So it's that type of configuration on the platform that then allows institutions of all shapes and sizes to respond to different needs. We look at the ecosystem play and how you can build that around our Mambo core. That's through third party APIs, whether it's system APIs, process APIs or UI APIs. And that allows for a best of breed, no compromise approach when delivering on customer experience. Again, that's open to all types of customers and something that we're working closely with them on.
Awesome. Sounds like what you're doing for clients is really having impact on them and on their customers, which is what Public Safety is all about as well. So it's been great to talk to you. Thanks for your time at Cyboss today.
Thank you very much and speak soon.