Archway Makes Banking Innovation Accessible with Mendix and AWS

Regional banks are critical for overall economic health. They impact the community around them by offering greater access to funding and more personalized services that can’t be found at the national level.

Over the last 20 years it has become harder and harder for these institutions to compete with the nation’s largest banks for a multitude of reasons – one of which is the customer demand for more convenience and digital touchpoints while banking, and their lack of IT expertise to deliver them.

Large national banks have hundreds of people dedicated to software development and can make up for their lack of personal client relationships by offering sleek, easy-to-use applications. Today, particularly in a post-COVID era, this quickly overshadows the once-appreciated personal touch of having a trusted branch employee to conduct your banking with in-person.

Archway Software is on a mission to level the playing field by providing financial institutions with adaptable solutions in a timeline, price point, and delivery model that addresses the gaps in their software development abilities.

Founded in 2022, Archway’s solution offerings are built on enterprise-grade technologies such as the Mendix low-code platform and AWS, and have enabled their customers to achieve a 4x faster delivery for solutions such as customer banking portals and Customer 360 dashboards.

Born from Regional Banking

Archway’s story begins in the Innovation Lab of WaFd Bank (previously known as Washington Federal Bank). Dustin Hubbard, now President at Archway, served as WaFd’s CTO from 2019 through 2022.

“At WaFd Bank we were trying to use an off-the-shelf product to build out our online banking,” Hubbard said. “After about six months it was clear that solution wasn’t going to work. That led me on a four-month journey of looking for providers that would allow us to build the application ourselves without incurring a massive amount of technical debt or delivering something that would be hard for the bank to maintain.”

Hubbard ultimately selected Mendix and with 4 developers delivered WaFd’s online banking portal in just 10 months – a win that sparked several new ideas for Hubbard’s team. “Later the bank asked us if we could create a solution for the back office team to log in and lock or unlock accounts because it would be closely tied to online banking,” he said.

“That back office tool went on to be even more valuable than what we started with, which was basic account management. I had assigned a network architect to work on that solution and after a few months he suggested that we expose the data from the data lake to employees which turned into a sleek, user-friendly Customer 360 view visualizing details like the customer’s tenure with the bank.”

Hubbard’s experience harnessing low-code in an environment where resources are scarce and competitive pressure is high brought him to an “a-ha” moment:

From Customer to Solution Provider

Taking proprietary technology from one regional bank and selling it to other regional banks may sound like a long shot, but Hubbard had both the right positioning and the platform to support this endeavor.

“After some exploratory conversations with the WaFd executive team they saw a few reasons why spinning off would be beneficial for them. First, we had already delivered on the promise of innovating for three years, and becoming a separate entity wouldn’t prevent us from doing that – in fact, they thought it would accelerate it because we could get more financial resources behind product development,” said Hubbard.

“In addition to that, a lot of regional and community banks or credit unions – they stick together, and they can benefit by pooling their resources. WaFd wanted to play a role in keeping similar organizations afloat. Then of course, they would have some ownership of the spin-off company, which could come with financial benefit as well,” he added.

The other big question was around the technology and decoupling it from the WaFd brand, processes, and architecture. The microservice-based, composable nature of Mendix and ability to implement IP protection enabled Hubbard’s team to ‘de-WaFd’ their solutions in just five months. In December of 2022 Archway formally spun out as an independent software vendor (ISV) in the Mendix ecosystem.

Addressing the Paradigm of Build vs. Buy

The market conditions of the pandemic expedited what would have been a decades-long digitization journey for regional banks into an immediate necessity for survival.

“A big part of Archway’s mission is to ensure the longevity of the small regional and community banks health in our overall financial ecosystem, because they are the lifeblood of the community. You don’t want to live in a place where there are only four big banks to choose from. It’s a much healthier ecosystem to have thousands of banks to choose from, but to maintain that ecosystem those smaller banks must adapt,” said Hubbard.

Banks like WaFd and their equivalents across the United States recognize this need, but they have to address it with annual IT budgets of maybe 10 to 25 million dollars – which is a drop in the bucket compared to the $12 billion a national organization like JP Morgan Chase spends on technology alone.

These organizations are at a crossroads – their lean IT budgets are hardly enough to develop enterprise-grade software with traditional code, and commercial-off-the-shelf solutions are typically restrictive and end up being smoke and mirrors.

“Someone has to help these banks put better technology forward,” said Hubbard.

Archway offers banks an alternative to the build vs. buy quandary – investing in adaptable solutions – where 80% of a solution is based on a common architecture which can be reused across various organizations, and the remaining 20% can be adapted through customization, extensions, or integrations. Today, Archway offers banking innovation as a service across three pillars:

• Developing great client experiences with adaptable solutions for online banking, back office bank management, call center management – and a forthcoming native mobile banking solution.
• Operating on a common architecture which is important for banks that have grown through mergers and acquisitions to have flexibility and openness, as well as ensuring opportunities for reuse in the future.
• Unifying data, which regional banks have in droves but often are unable to surface and action accordingly to personalize their client interactions or tell an accurate business story.

Hubbard has also assembled a team of industry experts whose business expertise is informing Archway’s early days. One of those individuals is Todd Tower, who joined Archway as Chief Customer Officer after over two decades at Concur, growing with the organization from 30 customers to 30,000 and an acquisition by SAP.

Tower has seen his fair share of solution delivery projects, and when asked what makes Archway different, he said, “We’re willing to support customers truly from start to finish. There are a lot of firms that will build the middleware or put a UI on something, but implementing it requires a third-party or maybe there is a component they won’t touch.”

Democratizing Enterprise-Grade Technology

Part of Archway’s leveling the playing field is to provide their customers access to enterprise-grade technologies like Mendix and AWS. Archway hosts all of their solutions on AWS, either by way of the Mendix Public Cloud or Amazon EKS.

Tad Neeley, Vice President of Business Development at Archway, said, “The biggest benefit of having AWS so embedded in our tech stack is that it’s a truly modern cloud. They offer a huge portfolio of incredible, cloud-based tools that provide intelligence which can be harnessed into actionable insights.”

Today, those tools include Archway’s Data Lake on AWS, Amazon Lex, Amazon Transcribe, Amazon Polly, and Amazon Personalize.

“When I look at what AWS is doing, it’s always through a lens of how we can apply that innovation to our industry and platform technology,” Hubbard added.

In practice, these parts have been assembled into innovative tools for Archway’s customers such as:

• Embedding conversational AI into Archway’s online banking solution through Amazon Lex, Polly, and Transcribe, allowing AI to answer common questions as well as route and handle call center cases as a precursor to connecting with a live agent.
• Optimizing customer communication in automated email marketing campaigns with Amazon Personalize, a recommendation engine which analyzes user data and recommends the next best product for a customer, which has resulted in the opening of 5,000 new accounts at one bank.

“The fact that both organizations are used to working together makes things easier for me. I can bring Mendix and AWS onto a call and everyone can speak the same language, so that is very helpful, especially when you’re trying to do innovative things and bring different pieces together,” said Hubbard.

Abstraction Makes Room for Innovation

Archway’s Mendix development team has more than doubled in the last year, with Hubbard primarily recruiting engineers with React Native, Eclipse, or front-end development experience. The abstraction and automation afforded by developing in Mendix has enabled this diverse development team to spend more time experimenting with innovation rather than focusing on tedious and repetitive work.

“It takes about 4-6 weeks for us to feel like new developers we bring on are ready to do commercial-grade programming in Mendix. During that time their mindset shifts, and they always end up commenting on how much faster they can work,” said Hubbard. “Developers like the ability to get work done more quickly. They’re spending less time wrestling with the syntax of the code. I’ve yet to hire a developer who starts using Mendix who has come back to me and say that they don’t like it.”

Archway’s team is also freeing up engineering capacity by leveraging the Mendix Public Cloud, which offers:

• Fewer environments for the Archway team to worry about managing, as cloud experts from Mendix ‘constantly have eyes on it.’ Hubbard posits that, in terms of security, this approach is more effective than having an on-premise cloud that is not properly managed.
• The ability to deploy to multiple cloud environments, which Hubbard says is less complicated in Mendix when “you want to be able to redeploy as many containers as you want with whatever code base you want.”
• The possibility for Archway to test applications in a pre-production environment, which Hubbard said is “really interesting when you’re dealing with banking software, because usually the non-production environment is difficult to test because it doesn’t have real use-cases.” With this approach, Archway can QA the release in a live environment that isn’t available publicly and better test the stability of a new feature.

“Mendix helps developers get out of the code and more into the big-picture problem that we’re trying to solve,” said Hubbard. “Because of the way Mendix actually works and the visual aspect, you’re asking questions throughout the development process.”

The ability to see impact quickly and collaboratively throughout the software development lifecycle has made room for Archway’s development team to craft a roadmap that solves real and present challenges for banks.

Rapid Enhancements with Mendix

Archway’s current offering includes adaptable solutions for online banking, customer relationship management, and call center management. They are now working on Digital Account Opening as well. Within the last year ideas from their customers and the market have introduced a series of new features which were implemented rapidly by way of Mendix.

One feature stemmed from an idea brought forward by WaFd, who needed to offer their customers the ability to approve wire transfers remotely. The idea was brought to Hubbard and the team around Thanksgiving, and after scoping out the feature, he estimated they could deliver it as soon as January.

“The biggest thing with wires is that once the money leaves your account – it’s gone. For that reason, banks are stringent about making you come in person,” said Hubbard. “We solved for that by using voice biometrics. Now, a customer can go into their online banking account, set up the wire, and receive a phone call automatically, and a bot will prompt you for your voice and password for verification. Then the wire is approved.”

“With Mendix and the AWS environment, we were able to roll out the wire transfer feature in six weeks. That’s innovation, and that’s what we’re trying to teach banks,” added Neeley. Hubbard estimates that, with traditional development, a feature like this would have likely taken close to a year to deliver.

In another instance Archway rolled out a feature for customers to dispute transactions online, which is more commonly seen in the applications offered by the largest national banks. For smaller banks, typically a customer would have to call and sit on hold waiting for a representative, but with Archway’s new feature the experience is on par with that of a national contender.

Another accelerator for Archway is the standardization of common, reusable components within their solutions. “One good example is connecting external accounts,” said Hubbard. “You might need to connect to an external account in your mobile online banking app or if you’re opening a retail bank account and need to fund it from another bank. That’s a good example of a component where, if you build the technology right in Mendix, you can reuse it many times across many applications.”

Regional Banking Reimagined

The ability to iterate and deliver quickly is core to Archway’s value proposition – their commitment is to get banks up and running with any solution 4x faster.

“For our model to be uber successful we have to be able to deliver quickly. We talk about innovation in the timeframe of weeks, so it’s critical that we have technology that allows us to do that, and Mendix is definitely one of those,” said Hubbard.

Archway hopes that in the future their customers will begin to embrace the speed and potential of low-code and lean into the concept of co-innovation – a value unique to adaptable solutions – to continue driving the industry forward.

“Our ideal future state is that we may be working with banks who do have more development resources can take something that is already pre-created in Mendix and expand on it in their own custom way. That way if there is a feature that is maybe 12 months down the line on our roadmap at Archway, they don’t have to wait 12 months. They can take that foundation and accelerate the development of that feature on their own in weeks,” he said.

Hubbard and the team are already excited for new features on their roadmap such as a concierge banking feature and cashflow projections, which will continue to roll out on a steady 8-week release schedule.

On what the future holds, Neeley said, “From a customer perspective, what I would like to see in five years is that we’ve empowered some really innovative banks. Our goal is that those community banks are out-maneuvering big banks and are providing innovative financial services that are driving value for their local communities.”

Key to this is the technological foundation, and fortunately the ethos of regional banking closely mirrors that of Archway and the platforms behind them like Mendix and AWS. The goal is ultimately access and democratization to propel innovation within a community.