Temenos launches ESG Investing-as-a-Service for Banks and Wealth Managers
By Joy Dumasia
Temenos launched ESG Investing-as-a-service, helping banks and wealth managers meet the growing demand for sustainable investing. The offering was unveiled to 1,500 banking and FinTech executives at Temenos Community Forum in London.
Running on Temenos Banking Cloud, any cloud or on-premise, the service accelerates time-to-market for ESG compliant products and reporting while reducing the cost of development. The solution combines Temenos front office, market data management and digital capabilities, including powerful filtering, scoring and modeling techniques, with external data feeds from multiple providers to deliver a complete end-to-end service.
ESG investing, also called sustainable, socially responsible, or impact investing, is a way of investing in companies based on their commitment to one or more ESG factors. It presents a huge opportunity for banks and wealth management firms to drive growth and differentiate to meet their clients’ increasingly sophisticated ESG needs.
According to an analysis by Bloomberg, global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management. Global initiatives supporting this trend are also gaining momentum, such as the UN Global Compact, the world’s largest corporate sustainability initiative, backed by 16,000 businesses in 162 countries.
Using the Temenos ESG Investing service, banks can quickly create investment products and power sophisticated digital experiences that allow investors to choose meaningful investments and build a portfolio around their values. The solution provides pre-integration to third-party data vendors with easy-to-understand ratings to evaluate hundreds of ESG factors. These include environmental factors such as carbon footprint and water usage, social factors such as diversity and gender equality, and governance factors such as executive compensation.
Marc Vanvilthoven, Product Owner and Customer Journey Expert Investments, ING, said: “We have a long-lasting partnership with Temenos and its wealth management solution allows us to deliver to our private banking customers advisory and discretionary management services. At ING, we always want to deliver world-class services to our clients. Temenos ESG Investing can accelerate time-to-market for ESG compliant products while reducing the cost of development and adopting standard features.”
Alois Pirker, Director, Wealth Management Practice, Aite-Novarica Group, commented: “Wealth managers’ demand for reliable, credible, and transparent ESG data has never been higher. Aite-Novarica Group expects sustainable investing AUM to increase from its current level of US$35.3 trillion by 7% per annum through 2025. Therefore, we safely expect heightened efforts for more data standardization, greater demand for insightful ESG data from reliable data sources, and deeper impact reporting platforms. Temenos’ new offering, ESG Investing-as-a-Service, meets these needs and offers wealth managers a clear path to address growing customer demand for detailed data and transparency relating to their investment choices.”
Alexandre Duret, Product Director – Wealth, Temenos, said: “At Temenos, our purpose is to power a world of banking that creates opportunities for everyone. With the new ESG Investing service, we will help private banks and wealth managers to become compliant and their customers invest with a purpose. Available as a service on our open platform for composable banking, it provides a fast track for our banking clients to launch innovative ESG investment products underpinned by robust, compliant processes, including new MiFID rules applicable in the EU from August 2022.”
Temenos has embedded sustainability within its operations, value chain and product offering, with strong ESG governance, reporting and measurable targets. The company has endorsed the United Nations Global Compact (UNGC) and supports the UN Sustainable Development Goals (SDGs). In addition to the FTSE4Good and S&P Sustainability Indices, Temenos has also been awarded an A- rating by the Carbon Disclosure Project (CDP) and obtained platinum recognition, placing Temenos among the top 1% performers assessed by EcoVadis.
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