Temenos upgrades platform for BaaS

The upgrade is designed to meet the technology needs of organisations offering BaaS from licenced banks to specialist BaaS providers servicing brands or fintechs. Temenos Banking Cloud reportedly enables incumbent and non-incumbent banks, as well as BaaS providers, to establish and scale their BaaS programmes and open up new revenue streams.

Temenos provides API-driven banking capabilities varying from origination to fulfilment of financial products across retail, SME, corporate banking, and wealth. With Temenos’ new Open Products capabilities, licenced banks and BaaS providers can reportedly create and service configurable financial products, enabling brands and fintechs to differentiate their embedded finance offerings.  

In the BaaS ecosystem, brands and fintechs – from retailers to ride-sharing apps – are embedding financial services in their offerings to provide a better customer experience, grow customer loyalty, and increase revenues. Temenos’ Open Products seeks to address this requirement by decoupling product design and servicing from underlying processing systems. This allows new products to be designed on top of standardised banking services, and then published independently ‘as-code’, making them extensible and upgradeable through Temenos’ extensibility framework, Financial IT reports.

For example, if a brand wants to offer credit services at the point of sale, they could consume Temenos lending service from the BaaS provider, and then leverage Open Products to design differentiated features, such as Pay Later offerings, variable rates, or early payment incentives. 

To licence-holder banks, Temenos states that Banking Cloud offers always-on customer services such as payments, orders, and credit scoring. Temenos’ extensibility framework reportedly allows banks to explore banking services and configure or extend their functionality. Temenos provides a high-performance, API-based, cloud-native platform for banks to offer financial services to serve ecommerce brands and fintechs at scale. Temenos reports that a global payments provider launched its Buy Now, Pay Later service on the Temenos Banking Cloud, reaching 25 million BNPL consumers which equates to 150 million loans.

In a recent benchmark with 100 million customers and 200 million deposit accounts with 100,000 transactions per second, the Temenos platform reached up to 61 transactions per second per core on AWS Cloud, supposedly proving its ability to help banks scale and cater for the high volumes of transactions in the BaaS world as multiple brands are hosted on a single platform underscoring Temenos’ green architecture.

Furthermore, Temenos seeks to cater for the technology needs of BaaS providers complementing their payments and cards services with banking technology. With the Temenos platform, BaaS providers can offer an end-to-end BaaS infrastructure including regulatory support to help brands provide embedded finance.

To BaaS providers, Temenos also offers APIs to connect to multiple brands or fintechs and help them deliver digital journeys to their customers and to service multiple products per brand from a highly scalable single platform. Temenos banking platform can also power 'as a Service' offerings by BaaS providers such as personal loans and business credits. The complexities of running multiple brands with different customer bases that share common infrastructure and books of records for regulated banks are handled by Temenos’ proven multi-bank architecture, Financial IT reports.

Temenos and BaaS

Mbanq, a US-based BaaS provider, is leveraging the Temenos platform to offer BaaS services to its clients. Temenos recently announced that it has invested in Mbanq to capture the BaaS opportunity in the US. In October 2021, Mbanq signed a strategic agreement with Temenos to launch a Credit-Union-as-a Service (CUaaS) offering, and to accelerate BaaS adoption across the US. In December 2022, Mbanq decided to expand its relationship with the Switzerland-based cloud banking platform to improve BaaS adoption in the US.

Recently, we sat down with Kanika Hope, Chief Strategy Officer at Temenos, to discuss the trends in embedded finance emerging across different regions.

In July 2022, research conducted by Temenos has shown that, since July 2021, three in five Brits have used embedded finance services as part of the checkout process when shopping online.