The United States houses over 11,000 registered banks and credit unions. These financial institutions collectively have over $19 trillion dollars in assets and provide banking services to over 300 million Americans. Regional banks and credit unions play an important role in the economy providing funding to consumers and small and medium-sized businesses that the large money-center banks are less adept at serving.
Yet these local financial institutions often lack the skills and resources to modernize and are in danger of falling behind in the digital customer experiences people have come to expect as a result of advances in FinTech and online banking. MANTL is one company working to change that dynamic.
Founded in 2016 by CEO Nathaniel Harley and CTO Benjamin Conant, MANTL is an enterprise SaaS solution that helps regional banks and credit unions modernize their tech stack and expand access to both consumer and business financial services through a best-in-class digital customer experience.
“I wanted to get back into finance and was really looking at what was happening in fintech in 2015. And so I linked up with one of my best friends from growing up, Ben, who’s, my co-founder and our CTO. And we were identifying a few problems at that time—number one was the unbundling of financial services that led to fintech companies popping up all over the place. We started talking to a bunch of people and just started to realize that financial literacy was really low and people didn’t really know what to do with their money. And the overwhelming feeling was that the technology that their banks were providing them wasn’t really helping them make some of these decisions. So the vision from the beginning was actually to build a better challenger bank that would actually help people,” says Harley.
The pair set out to build a better online bank, launched a product, got some traction and raised their seed round funding. When they started talking to traditional, regional banks and credit unions, they found that 95% of them outsourced their technology to third party vendors. But the technology that those vendors provide was primarily a core banking system with some ancillary products based on legacy infrastructure built in the ‘60s, with 43% of banks still running systems written in COBOL.
“And so, when we started seeing this, we were like, ‘This is crazy.’ No wonder the traditional community banks and credit unions and regional banks haven’t been able to innovate because the partners and the vendors that they’ve been working with have not provided them the tools necessary to compete with the money center banks. And also, the new fintechs were building a better user experience. So we saw a massive opportunity to take on that legacy infrastructure,” says Harley.
Replacing the legacy infrastructure today is a big undertaking for any bank. It can take many years and is a huge expense. To overcome the legacy infrastructure issue, Harley and Conant needed to figure out a way to enhance the legacy infrastructure today and be able to launch digital products that produce significant ROI and outcomes for their customers, without them needing to necessarily go through a challenging core technology migration.
“So we developed the infrastructure layer, which we call our core wrapper API, which essentially integrates and reads and writes directly into the bank’s legacy core banking system. And then it allows us to launch these digital products quickly on top. The first product that we’ve gone to market with is essentially a white-labeled account opening solution. So, if you go to a bank site, you click open an account, that would be our software. We do everything from, information collection, to fraud, funding, to email marketing automation and data analytics,” says Harley.
To create the software that would bridge the old world of COBAL with modern software design, MANTL brought together a team of people that had actually written those original core banking systems and paired them with really talented software engineers who were on the cutting edge of what they were doing, and combined them into a team to be able to figure out how to integrate into these legacy systems. And build it in a way that was agnostic to any software so they were not writing custom code for each bank.
MANTL started with opening accounts for consumers online and have since expanded the platform to handle business accounts as well. With SMBs a big focus for regional banks and credit unions right now as complex commercial accounts drive high deposits for those banks, MANTL needed to expand the platform to provide a self-service white-labeled solution that the banks could put on their website, but also build out a true omnichannel solution where the bank employees could open accounts on behalf of their customers.
“One of the things that we believe, and I think it’s very similar to retail, is that you have to have a competitive digital offering. But you also need the human to human strategy as a compliment. Yes, branches are going down and we believe that branches will continue to decrease in number, but we don’t think they’re going away necessarily. We think they’re changing and we need to support that change and really bridge the digital and human to human strategy at the end of the day,” says Harley.
Today, the New York City-based MANTL is growing fast, doubling its headcount for a second consecutive year in 2021 to over 100 employees, doubled net new clients in 2021 over 2020 and helped deliver $5B of customer deposits to date.
MANTL’s growing customer base has attracted $62.3 million in venture funding over eight rounds. Their latest $40 million B round funding was raised on April 20, 2021 led by CapitalG. Other investors include Oldslip, Box Group, Point72 Ventures, Clocktower Technology Ventures, D1 Capital Partners, Vine Ventures, Sinai Ventures and others.
Harley grew up in New York City. Both of his parents were lawyers at big law firms. And while he was not exposed to risk taking at home, his parents were supportive of his entrepreneurial endeavors. When he was in grade school his mother helped him buy snacks and Gatorade to sell to the soccer moms who forgot to bring them. Both he and his life-long friend Conant and later MANTL co-founder went to the Collegiate Day School. The school didn’t have film classes, so Harley created his own classes and did a feature film for his senior project. In college, at Northwestern University, where he majored in Mathematical Methods in Social Sciences, he created an awards card that would allow students to get 10% discounts at local institutions.
He worked for Goldman Sachs in investment banking after graduating, where he got his first exposure to regional banks. After three years, he went out on his own to help found Spoon University, a food network for the next generation where all the content is produced by college students, which was acquired by The Food Network. After that successful exit, he went back into finance as an angel investor where he became involved in fintech, prior to founding MANTL.
“I’ve always been really interested in starting something and creating something, and I think what finally clicked for me after working through Goldman was, I really did like being my own boss. And I did like the freedom of being able to go deep on problems and learn new things all the time, and that’s really what ultimately excites me. I very much see myself as an entrepreneur at the end of the day, and someone who loves problem solving and trying to find solutions to things that need them,” says Harley.
As for the future? “I think there is a massive opportunity to build a next generation financial service provider for these traditional financial institutions, and account opening is really where we’re starting and our wedge into the market. We see a lot of opportunity on the other side of the balance sheet in lending, in loans and things like that, we see a lot of opportunity going further downstream into either the online and mobile banking space or even the core banking system. And look, everything we do is geared towards building for the next 10 years,” concludes Harley.