Our perspective

Turbocharging Banks Into the Digital Age

Jesse Wedler & Jeremy Zhu
20 Apr 2021
Turbocharging Banks Into the Digital Age

By CapitalG investors Jesse Wedler & Jeremy Zhu

In recent years, consumer banking has seen major disruptions driven by the ubiquity of smartphones, cloud services, and rise of neobanks. Increasingly, banking services have become digital, and physical banking is slowly diminishing. In the last 5 years, digital banking users grew at a 39% CAGR (compound annual growth rate) while the number of physical bank branches declined at an 11% CAGR. For any bank to acquire and retain customers, offering a best-in-class digital experience has gone from being a nice-to-have to mission critical.

With the closure of physical branches during Covid shutdowns, the gap between banks with digital capabilities and those without has become more pronounced. Megabanks like Chase and Bank of America have extensive IT resources, having built bespoke digital applications to respond to the Covid challenge fairly quickly. But regional and community banks — which make up 95% of all banking institutions — often rely on third-party technology providers whose systems are sometimes decades old and lack the modern capabilities available to leading digital banks.

The market pressure to innovate in order to survive, combined with a banking technology landscape that is dominated by on-premise systems (written in advanced coding languages like COBOL) has created a challenging backdrop for banks to navigate. In total, the banking sector spends $112B annually on enterprise software. As banks increasingly prioritize digital transformation, we believe a majority of this spend will transition to vendors who understand the current infrastructure challenges and are able to deliver tangible ROI.

MANTL is solving the problem from the ground up

The MANTL team experienced these banking challenges first hand. While they initially set out to build a challenger bank, in the process they found that a majority of community banks were struggling to compete online due to their outdated technology. The MANTL team realized there was a larger opportunity: help banks modernize their infrastructure. Rather than starting with a full overhaul approach they decided to address the most pressing problem for banks: digital account opening.

MANTL’s first product is a turnkey solution for end-to-end digital account opening with both banks and customers in mind. Their omni-channel platform enables people to open accounts from anywhere, on any device at any time with an average time to open an account just 2 min 37 seconds. That’s a vast improvement over the status quo, which is typically 5–10 minutes online plus in-person follow-up for document verification and approvals.

The MANTL approach translates to a much better customer experience and as well as a better bank experience. Banks using MANTL saw an average 4x faster deposit growth post implementation. On the backend, MANTL has built deep integrations with all of the major banking cores, which means it can be implemented in an industry-leading timeline of 3 months. MANTL also helps streamline back office processes to enable more automated and compliant transactions — the system automates application decisions for more than 90% of cases, while reducing fraud by over 60%. Overall, using MANTL is up to 10x more cost effective for customer onboarding than legacy channels.

Since starting with retail deposits the MANTL team is working to digitize other essential banking applications such as business account opening and better tools for in-branch account openings. Beneath these applications is MANTL’s innovative core wrapper API (hence the name) that reads and writes data from and into the banking cores. It abstracts the complexity of interacting with decade-old legacy infrastructure and will enable MANTL to be a valuable partner as banks seek to innovate their entire technology stack.

CapitalG’s investment in MANTL

In an increasingly digital landscape, there is incredible demand for platforms that empower vital community institutions. When we first met Nathaniel and team, we were immediately attracted to their vision. Their technology can modernize the most essential processes for these banks and enable them to compete in this digital era. It’s audacious both in the size of the market opportunity they’re addressing and the importance of the market they’re serving, given the critical role that regional and community banks play in helping local economies thrive.

The MANTL team has demonstrated that they have the strongest product and the most compelling vision for tackling this legacy infrastructure challenge. We see MANTL as a vital player to enable the U.S. banking sector to compete in the modern era. We’re thrilled to partner with them as they continue to build a world-class team and product that are making their vision a reality.

Want to join an awesome team? MANTL is hiring.

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