Temenos launches the Temenos Banking Cloud

The solutions provider is aiming to accelerate SaaS and AI adoption among banks and FinTechs, offering instant access to Sandbox, Banking Services, and MarketPlace. Robin Amlôt speaks to Ross Mallace, Business Line Director, Temenos Banking Cloud

The cloud-native, cloud-agnostic technology architecture is micro- services-based and API-driven to optimise the use of underlying cloud platform services. Through the self-service portal, IT users and developers can spin up fully provisioned environments, benefit from real-time dashboards on usage and billing, configure permissions and manage security credentials. Temenos AI advisors offer recommendations to banks to proactively manage usage and service health.

Introducing the Temenos Banking Cloud, Max Chuard, Chief Executive Officer, Temenos, said: “Research shows that for quite some time 70% of banks cannot cover their estimated cost of capital. Banks can no longer wait; they need a new approach to run their business and develop banking products.”

He added: “The Temenos Banking Cloud is for both digital-first banks that want to launch in weeks as well as large or complex banks that want to acquire distinct capabilities, launch products fast and progressively migrate customer bases that are serviced by legacy systems.

“We are putting banks in control of their business models and innovation cycles, giving them the agility and speed to build great customer products and profitable businesses. With The Temenos Banking Cloud, we empower banks to digitally transform and massively scale faster than ever.”

The cloud-based offering brings together all of Temenos’ services and makes them accessible through a self-service portal instantly available at the click of a button with a ‘pay as you go’ model. To find out more, IBS Intelligence spoke with Ross Mallace, Business Line Director, Temenos Banking Cloud.

Are you responding to banking needs or is tech driving banking?

“Customer demands are changing and changing rapidly, and that is driven by what they are seeing, and [what] we have all experienced in other industries in terms of online instant gratification, being able to do everything you want at the click of a button. So, when we come to banking, customers have similar expectations. It is that but also the fact that I think technology has, especially the likes of cloud and SaaS, made it for easier for FinTechs to disrupt the market by removing the typical barriers to entry that used to exist around infrastructure, regulation, and security. The cloud and cloud technologies have allowed that disruption to occur, which is also disrupting the market and forcing the banks to keep up as well.

“We have created a single command centre for clients to consume everything Temenos… but we have taken it further, and we have created discrete banking services that are much further in terms of being pre-packaged to the point where they can be turned on and implemented in minutes and fundamentally allow banks to go live in days, which we see as quite a game changer in our industry.

“We have also expanded on that to allow banks to innovate and try new business ideas. We have enabled all of our capabilities in a Sandbox so you can turn on, for example, our lending service to try, to innovate, to explore and then to take live when you are ready.

“Taking it a step further, it is not just about Temenos, it is all about being able to collaborate with the ecosystem. That is really where we are bringing in that plug and play, click and go MarketPlace where you can consume third party services in the same manner you would consume Temenos services.”

Essentially you are offering building blocks, allowing banks to build the bank they want?

“Absolutely, that is the key, we are trying to provide all the building blocks so you can fundamentally create and design your own business propositions, innovate at speed and get them to market quickly.

“From here it is all about deepening our maturity into regional and local markets. To be able to consume something very, very quickly, at the click of a button and go live in days, requires the actual proposition and, to use your words, the building blocks to be much closer to the finish line. In banking, basic capability is important but for it to be really of deep value, we have got local requirements, whether its regulatory reporting, payment interfaces, so for us it is all about deepening our maturity into the regional markets over the medium term.”

Temenos claims localised functionality from over 150 countries, covering all banking segments. The Banking Services are created using Packaged Business Capabilities, which are aligned to the BIAN standards. They are extensible, flexible, and open, and may be configured and integrated with external applications. The Banking Services can be consumed instantly, are pay-as-you go, and continuously updated safely without the need for big upgrades, offering enterprise-grade controls to manage mission-critical systems.

How does the MarketPlace work?

“We have our curated MarketPlace where you can expand your business proposition to include innovative third parties and FinTechs. There are lots of them out there in the market that complement the solutions we have and fit business requirements on a bank by bank and region by region basis.

“Of course, we do curation, we look at it from a market fit perspective. We look at it from a due diligence [perspective] in terms of the actual entities themselves, the companies, but also from a security and compliance point of view and, with the next evolution of our MarketPlace, because it will be click and go, we will be folding
a Temenos support model around it so that we also have that operational due diligence in terms of managing those supported interfaces to the third parties as well.

“It will be a single experience from a billing and an operational support perspective to create a seamless experience with MarketPlace providers.”

The Temenos MarketPlace already includes the likes of Plaid, Taurus, Tink and Wise. The FinTech solutions are pre-integrated so they can be rapidly consumed for a quick time-to-value. Developers can work with open APIs to extend their banking services by inviting FinTechs and developers to the Sandbox environment and collaborate.

The Sandbox includes access to Temenos Banking Services, Temenos MarketPlace, example data, and integration tools to enable banks to configure new products. It also offers high-quality well-documented APIs, the essential connectors of open architecture. While banks can choose to move to production environments in the cloud or on- premise, Mallace believes the key to the future is in the cloud.

Is speed of time to market the most important factor?

“That is the fundamental driver behind us doubling down and launching the Temenos Banking Cloud, it is to enable innovation at speed… It is about putting the power into the hands of those who want to produce something and want to do something quickly.

“The onset of Covid has really forced a change in the way of working, putting an awful lot of emphasis on the need to be digital. No longer could you walk into the branch and, all of a sudden, being able to do basic things on the app became paramount out of necessity. But also, with remote working, the whole digital operation became very prevalent.

“Covid has driven acceleration towards digitisation in the [banking] industry. We have got some great stories where we managed to support banks getting propositions out to market very quickly because they needed to get, say, lending facilities in place as part of government initiatives and you can really only do that with SaaS and cloud technology. If you had to do it on-premise it would be an awful lot harder.”

How do you manage regulatory requirements?

“There are two facets to that. There is the regulation and [being] fit for purpose in terms of outsourcing and cloud. We always have to be able to show we meet the needs for the banks from their regulator, [and in terms of] security, privacy, data sovereignty.

“From a functional point of view, meeting the needs and requirements of the local regulator, it is not just about a point in time but about being future proof. Everything is ‘evergreen’, with continuous updates against a continuous road map so that banks are comfortable that they have everything they need to run a client bank.

“From an operations point of view, and our network and security operations centres, we run a global shared service which is one of the key benefits of our SaaS offering that has managed to continue 24/7 [offering multi-layered security, comprehensive compliance coverage].”

What the banks are sayingTemenos has more than 700 SaaS customers around the world, including over 70 challengers. Chris Sozou, General Manager Platforms, Partnerships & Analytics, Virgin Money Australia, said: “Our digital bank has been designed with a clear ambition to simplify banking and help customers achieve their financial goals. With Temenos SaaS, we can deliver a frictionless digital experience, bringing together credit cards, transactions, and savings accounts, plus a loyalty program in a single, native mobile app. With the Temenos Banking Cloud, it is easier to integrate with third parties and we have an agile platform that easily scales up or down depending on business demands.”

Dan Dickinson, Chief Information Officer, EQ Bank, said: “As Canada’s first digital-only challenger, we turned to Temenos SaaS to easily scale to meet customer demand, grow deposits much more quickly at a lower cost, and pass on the benefits to our customers. With the Temenos Banking Cloud, we can accelerate our business growth and benefit from unlimited innovation through the Sandbox and Temenos MarketPlace capabilities.”

The Temenos Banking Cloud allows banks to move from a CapEx to an OpEx model. Varo Bank, using Temenos SaaS, estimates that it services customers at 25% of the total costs incurred by a traditional bank. Banks using the Temenos Banking Cloud have benefited from instant scalability. One European challenger bank opened over 600K accounts in 3 months while a global digital disruptor saw more than 20mn loan applications processed within 9 months.