Switzerland-based private banking group, Julius Baer, has concluded its lengthy selection process to find a find a new core banking solution to harmonise its operations worldwide. The winner is Temenos and its T24 offering, beating rival Avaloq to the deal at the final stage. The news will be greeted cheerfully by Temenos’ shareholders, following the recent sales warning issued by the vendor and the resultant share price dip.

Julius Baer has now embarked on a separate search for an implementation partner. This is being done independently, says Jean-Michel Hilsenkopf, MD for EMEA at Temenos, although the vendor will provide some input on the bank’s request.

The project is global in nature, but the details have not been set in stone. What definitely has been agreed on so far is the implementation of T24 in Singapore and Hong Kong to support the group’s Asian operations, and the overall upgrade of its existing portfolio management solution, TripleA (the system stems from Odyssey Financial Technologies, a wealth management software vendor acquired by Temenos in 2010). Julius Baer uses the system in Switzerland and in Asia.

Temenos’ T24 back office system will replace ERI’s Olympic in Singapore and Hong Kong, with the work expected to last 18-24 months. Incidentally, ERI was not part of the selection process at Julius Baer.

As to the reasons for choosing Temenos, Hilsenkopf feels there were three major points in the vendor’s favour. First, the system’s architecture, ‘particularly its ability to scale and capacity to integrate with other systems at the bank’. Second, Julius Baer was keen on ‘progressive renovation’, so that it could apply the new solution ‘piece by piece, in a contolled manner’, and Temenos could address this requirement. Third, the international footprint of T24 matched the bank’s strategy of global IT renovation.

Discussions and evaluations are now underway for Temenos’ other solutions, such as Temenos Connect for channels, and Datasource for enterprise data management, says Hilsenkopf. ‘The bank is open-minded about its software,’ he notes. Indeed, in its latest annual results release, Julius Baer states that whilst Temenos has been selected ‘to initiate planning of its core banking platform replacement’, the bank has retained ‘flexibility to select the optimal providers for additional components and applications’.

The bank also confirms that the IT overhaul in Asia, which is a fast-growing region for Julius Baer, representing nearly a quarter of the group’s business, is just the beginning. ‘It serves as an ideal template for future implementation in other regions after its anticipated completion in 2017. In parallel, selected enhancements will be carried out in Switzerland in line with the scope of the project,’ the bank states. No negative impact on the target cost/income ratio is anticipated during the implementation period, whilst improved efficiency is envisaged upon completion.

Hilsenkopf echoes the sentiment saying that the successful completion of the implementation within the current scope will demonstrate that ‘we are ready to do more’ and will ‘set up the basis for global projects’.

In the course of 2015, Julius Baer is set to complete the integration of Merrill Lynch’s International Wealth Management business, which it acquired in 2012. It is also now in the process of integrating the private banking business of Bank Leumi in Switzerland and Luxembourg, as Bank Leumi is exiting this sector. The transfer is set to conclude by the end of 2015. The resultant entity will have over 50 locations across 25 countries.

By Tanya Andreasyan.

by IBS Intelligence
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