"We can create mobile banking apps for credit unions that truly are better than what the big banks are issuing. That’s our promise,” said Robb Gaynor co-founder and chief product officer at Malauzai, an Austin, Tex.-based developer of mobile tools for community-based financial institutions.
The occasion was an announcement that Malauzai, a word meaning “little monkey” in Cantonese and a childhood nickname of co-founder Tom Shen, had closed another round of venture capital fundraising. This round added $2.3 million to the company coffers, but, stressed Gaynor, “we are constantly raising money, so we can develop better apps.”
And the reason is that “we see the next three to four years as decisive in the rollout of mobile banking,” said Gaynor. His best guess is that around 20% of credit unions currently have a mobile banking channel, but that leaves upwards of 5,000 institutions that do not, and almost all of them will want to deploy mobile, he predicted. “By 2016, pretty much every credit union will have a mobile banking offer.”
“Mobile banking is no longer a competitive advantage. It’s becoming a competitive imperative,” he added. “As financial institutions face-off within the mobile channel, they will start looking for ways to differentiate mobile offerings and increase consumer adoption. To get consumers to adopt mobile banking, financial institutions will need to give consumers a better mobile experience and offer features that will either save time or solve problems.“
“We now have 49 signed customers, five are credit unions,” said Gaynor. He said Malauzai will have 100 customers by year end.
Key to the Malauzai business model is that it sells to credit unions through partners. Currently, that is Plano, Texas-based Catalyst but, stressed Gaynor, the deal with Catalyst is not exclusive. “We are in talks with other corporate credit unions that want to offer mobile banking to their members,” said Gaynor, who indicated Malauzai anticipated signing another corporate this week. He declined to reveal details.
“We do not want to sell direct. We want to go through partners with whom credit unions are already familiar,” said Gaynor.
He explained that the Malauzai pricing model is at the root of its appeal. “We make mobile banking affordable for just about every institution,” said Gaynor. The company prices mobile banking as a service and, in rough numbers, it works out to about $1 per member who uses mobile banking per month. “For that you get apps that we believe are as good as the best,” said Gaynor.
Malauzai supports both iPhone and Android smartphones with apps. An iPad specific app will also be released within a few months, said Gaynor
One important difference between Malauzai’s mobile banking and many others is that “we go directly to the core system,” said Gaynor. While many other products in effect piggyback off online banking, Malauzai’s does not and, said Gaynor, an institution might decide to skip online banking entirely and go directly to a mobile banking launch. “We are talking with institutions that may do that,” he said.