The five pillars of digital transformation – interview with Temenos

Can you tell our readers a little bit about Temenos and its solution?

Temenos is a global banking software company collaborating with banks and other financial institutions to transform their businesses and stay ahead of a changing marketplace. Over 3,000 firms across the globe, including 41 of the top 50 banks, rely on Temenos to process both the daily transactions and the client interactions of more than 500 million banking customers. Temenos offers core banking, the very core of what a bank needs to exist as a bank, right through to front end digital banking capabilities. Temenos Infinity is a breakthrough digital front office product, while Temenos T24 Transact is the next generation in core banking. Together, these cloud-native, cloud-agnostic products deliver unprecedented speed, scalability, and resilience.

Temenos also offers everything in between that is required in order to support a digital experience, including analytics, financial crime, dev ops, regulation, and regtech as well. We also have MarketPlace, our digital online store. We combine these capabilities with the fintech and the startup world and we`re constantly looking at new capabilities that could complement our banking technology. 

Temenos` software spans retail banking, payments, wealth banking, fund administration software, corporate and SME banking. Our aim is to deliver consistent, frictionless customer journeys and help financial institutions gain operational excellence.

From what you’ve seen globally, what do you mark as the most important challenges and opportunities in banking today and in the future?

Open Banking remains a challenge and, most importantly, digital is still a challenge. Particularly, among incumbent banks, digital is still seen as an interface, and the main concern is that the interface isn`t up to scratch to meet consumer expectations, in the sense of what customers are experiencing with the big tech or the GAFAs of the world (Google, Apple, Facebook and Amazon), but also with neobanks like Monzo, Revolut, N26. Big techs and the neobanks are offering new and exciting financial services, have an innovation mindset, agility, consumer-centric perspective, and an infrastructure built for digital. These are things that traditional banks haven`t invested a lot of effort into.

Therefore, the big challenge for banks is remaining relevant but also seeing Open Banking and digital not just as a threat but as an opportunity. As banking incumbents push to stay relevant amidst disruption, they have to fundamentally rethink their product roadmap as well as employ a variety of strategies to structuring their innovation functions.

Are banks prepared for the digital revolution? What`s on top of their minds when it comes to keeping up with digital transformation?

While many banks are making significant advancements in digital transformation, others are exploring or experimenting with digital tools. Some are quickly updating themselves to the digital-oriented processes. We see it more as an evolution at the moment, but we`re not seeing many revolutions happening. A lot of digital that we`re seeing out there is the process of using digital technologies to digitize the banks as they are so it`s still banking being digitized. There are many banks doing interesting strides into being disruptive, however, a lot of what we`re seeing is incremental change.

No doubt, we are witnessing a maturity in the understanding that digital is more than just a sleek interface or a new app for millennials, and we`re also seeing a maturity in the understanding of how to use fintechs and how to work with vendors. Collaboration is now seen as the new norm, while customer centricity is now number one ambition of most organisations.

Being able respond to digital change as a mindset, combined with cultural factors, is also something that banks are striving for. For this reason, Temenos is investing in data technologies to support the customer experience, creating the technology environment (which is open and API-ready), all while making sure that in the transformation journey all the banks can meet the regulatory requirements, but also that they are safe and that they make their customers feel safe.

Culture is the biggest problem and that`s what stops evolution from happening. One of our capabilities is Temenos DevOps, enabling banks to change much faster than they have been able to traditionally. Through our Temenos Continuous Deployment SaaS product, a self-service driven environment where the bank`s developer teams can quickly develop, test and deploy change including configuration and extension code in an automated environment, in hours. That`s a change in frequency of change which solves a lot of cultural problems because there isn`t so much fear around your one opportunity to make changes - if you`re able to make changes everyday, it means that you can experiment, explore and use design thinking and also take new uses cases and prototypes to market. So those areas – customer experience, data, tech, trust and culture – are the five points of success for any digital strategy and transformation that is going to sustain itself in the long term – and that`s true evolution.

We strive to look at the whole picture, not just a piece of it. At Temenos we make a lot of effort to help banks be more innovative, not just incrementally, but also from a disruption point of view. Not necessarily to actually disrupt, per se, but to introduce new and exciting services that can serve their unique markets. We are constantly exploring changes in the industry and how can we respond to those and help our clients stay on the front foot.

Which emerging technologies do you see as game-changers and will have the greatest impact on banking? What is Temenos doing in these areas?

Artificial intelligence, machine learning, deep learning, and the use of algorithms are growth areas – especially on the consumer side. Beyond the opportunities to create new value and insights than can help people manage their lifestyle and their money better, there is a huge amount of value in financial crime mitigation and empowering internal business processes.

Temenos has launched a center of excellence for artificial intelligence center to foster a collaborative ecosystem with Temenos banking clients and partners to help identify and validate use cases where AI could have an immediate impact on customer experience.

Temenos is integrating AI throughout its digital banking platform and is assisting banks to get AI-ready by providing data architectures and integration tools that promote real-time data quality and governance, and allow the consumption of high volumes of data by AI and machine learning applications.

Lastly, another growing trend is cloud migration for all the obvious benefits, such substantial economies of scale and efficiency improvements.

What’s in store for Temenos in 2019?

Customer experience is our main focus and is an area that needs constant nurturing. To help our customers create a customer experience strategy, Temenos has recently launched Temenos Infinity - an independent omnichannel digital banking product that helps banks transform multiple siloed banking channels and legacy applications into a consistent customer journey. Through design-led thinking, user journeys and multi-country onboarding capabilities, Temenos Infinity enables banks to orchestrate all their customers’ touchpoints and interactions.

With its open API-first design, Temenos Infinity enables banks to connect with a wider ecosystem of financial and non-financial providers as well as the developer community to innovate and bring products to market. Temenos Infinity can be implemented through APIs as an independent front office platform on a third-party core banking system or integrated with the Temenos T24 Transact product.

Looking ahead, growth and expansion are key goals for Temenos and we are now looking to expand our business across all regions, while investing into artificial intelligence, cloud capability, and cyber security.

Another big growth area for us is SME banking. We are therefore using design thinking to identify new opportunities for growing services around SME banking capabilities for our banks.

About Kam Chana

Kam supports Temenos clients in navigating the digital landscape and formulating customer centric and data led strategies around customer engagement. Kam comes with an extensive background in digital transformations working in the original 1990s tech boom for pioneers like Charles Schwab Stockbrokers. She has led on multiple Digital Transformation programmes for Fidelity, RBS, BlackRock and Barclays as well as supporting Fintech startups with disruptive innovation. Kam is passionate about helping banks stay at the forefront of innovation using data and digital technologies to ultimately make banking human again.

About Temenos

Temenos is a global banking software company partnering with banks and financial institutions to transform their businesses and stay ahead of a changing marketplace. Over 3,000 firms, including 41 of the top 50 banks, rely on Temenos to process the daily transactions and client interactions of more than 500 million banking customers. Temenos offers cloud-native, cloud-agnostic front office and core banking, payments, fund management and wealth management software products.