Former DI-Intuit Exec Wants to Revolutionize Mobile Banking

Malauzai Software made headlines last week when it raised $2.3 million from Live Oak Banking Co., to expand its growing business as a mobile app development partner for community banks and credit unions. But already, Co-Founder and Chief Product Officer Robb Gaynor says, “We’re raising money again.”

You may recognize Gaynor’s name, or that of Malauzai CEO Tom Shen, from their roles at Digital Insight. That company was sold to Intuit in 2006 for $1.35 billion. At the time of sale, DI provided service to 8.5 million end users through 1,700 client banks.

Gaynor is hoping Malauzai gets close to that scale in the next four years. He estimates the market for Malauzai’s services at roughly 11,000 financial institutions with between $100 million and $15 billion in assets.

About 2,000 of those banks already offering banking services through the mobile phone, he says. And by 2016, Gaynor expects 95% of those community banks and credit unions to have made their “first choice” in identifying a mobile banking app partner. At that point, Malauzai is hoping to have obtained between 17 and 20 percent market share.

They’ll achieve that with innovative offerings — a few of which they’ve already rolled out with several clients. Gaynor offers three examples:

1. Debit card management. Bank customers who use Malauzai apps can turn their debit cards on and off remotely as an added security measure. A client in Texas says it’s a top-five most-used feature for their customers.

 

2. Mobile capture. Some of the biggest banks in the country don’t yet offer the ability to deposit checks using a smartphone camera and an app. Malauzai expects about 60 percent of its clients to eventually request this service.

 

3. Rewards. Accountholders used to have to call customer service to find out how to get the best rates on checking and savings products. Malauzai builds offers into its app to motivate certain banking behaviors — for example, offering an interest rate increase as a reward for a certain number of debit card purchases.

 

Another idea that’s still in the development stage: turning community banks into a marketing platform by connecting small businesses (who borrow from the bank) with deposit customers. Pulling that off would allow Malauzai clients to succeed in a space where larger competitors like Groupon have been unable to break through: small towns.

But even if Malauzai continues to come up with the coolest ideas in the space, Gaynor acknowledges that the road ahead will be tough to navigate alone. “We can only grow so far on our own backs,” he says. That’s why Malauzai has already established vertical partnerships with companies like CSI and Catalyst Corporate FCU and could eventually foresee another round of partnership talks.

For now, though, $2.3 million will have to be enough to continue growing. Gaynor estimates that funding will be enough to get Malauzai through the end of 2013 or perhaps a bit further. By next year, the company expects to have signed on 100 clients — one small step towards the 2,200 institutions representing 20 percent of the market.