Temenos (SIX: TEMN), the banking software company, announced that it has reached a major milestone in the delivery of its microservices-based architecture for cloud-native, cloud-agnostic Temenos Transact. This unlocks the potential for Tier 1 banks to strategically transform their core banking systems at scale.
Large banks are burdened by their legacy infrastructures. The cost and associated risk of replacing these complex systems, which have been customized over decades, is high. However, these outdated systems are making banks suffer high operational costs, high risk of outages, and a lack of agility that prevents them from bringing innovative, personalized products to market. The urgency to digitally transform has never been greater.
Temenos is now accelerating the roll-out of its microservices to help larger banks continuously transform their core banking applications. Unlike traditional monolithic core banking systems, Temenos Transact has independently deployable components that support continuous renovation based on the bank’s business needs. For the first time, there is now an alternative for banks to safely update critical elements of their core banking systems one component at a time with proven cloud-native, cloud-agnostic software and see tangible benefits along the way. These microservices can be deployed independently, enterprise wide and banks can retain existing systems where they are fit for purpose. Combined with microservices-based Temenos Infinity, banks have an agile, services based architecture for both core banking and digital customer journeys. This offers an alternative to the already successful build and migrate implementation approach, where banks can build a new digital stack while continuously migrating products and customer bases from their legacy systems.
Banks can pursue a long-term strategic roadmap while continuously renovating product lines, such as deposits and accounts, and core systems such as funds authorization and position keeping, based on their commercial and operational priorities. This strategy enables banks to flex the sequence of renovation as priorities change over time.
Temenos’ microservices strategy offers existing Temenos Transact clients the benefit of granular upgrades, allowing them to react to market opportunities faster while cutting the total cost of ownership of their existing core banking platform. Leveraging Temenos Continuous Deployment, which extends the Temenos DevOps operations into banks’ own environments, Temenos clients can accelerate the speed of software delivery and rapidly bring competitive innovations to market.
For smaller banks, the recommended approach is to select Temenos Transact as a SaaS offering to speed deployment and simplify IT operations.
Building on its extensive set of standalone services – such as Payments, Financial Crime Mitigation, Enterprise Data Management and Analytics – Temenos now offers new standalone banking microservices including:
· Accounts and Deposits: this service manages all the activities in the life of current, checking and deposit accounts in real time. Feature-rich, it supports any currency and offers a great variety of interest calculation methods and configurable business rules and events. Fully automated, the service integrates seamlessly through APIs with distribution services and other core systems such as payments, pricing, accounting. Deployed as a microservice, it leverages the cloud’s elastic scalability to manage millions of accounts with the lowest TCO.
· Retail Lending: this service manages a wide range of lending products, from simple unsecured consumer loans in any currency to complex facilities including multiple loans and associated collateral requirements. Designed for real-time processing and highly configurable, Retail Lending is rich and flexible enough to replace a number of legacy systems within the bank. Through APIs, it will integrate with the rest of the IT ecosystem, in the cloud or on premise.
· Enterprise product: a standalone product catalogue that enables banks to design and take to market products on a single system, reducing cost and boosting profitability of products. The service enables financial institutions to centralize all product definitions in a common repository, giving them greater overview and control across multiple business lines often working in silos. It helps banks launch new products and commercial offers much faster.
• Enterprise pricing: a central pricing engine that supports greater personalization of products services driven by AI, and improves time to market for all product types, including bundled products, relationship-based pricing and third-party products. Banks can get greater control over the fees they apply, often within disconnected applications. This increases profitability for the banks. With relationship pricing, they are able to define granular rules based on the client’s characteristics and the context of a transaction, and thus offer a personalized banking experience to each customer.
Temenos Transact microservices are functionally rich, enabling fast deployment without the need to build additional capabilities on top. Temenos has created reusable country Model Banks, which include regulatory compliance and best business practice solutions, for more than 150 countries. This helps banks go live faster and acts as a foundation for future innovation.
Max Chuard, Chief Executive Officer, Temenos, said: “To date, larger banks have been shying away from digital transformation projects. As the #1 banking software company, we are taking the lead in bringing about industry change. We are delivering the Temenos Transact microservices architecture, which will revolutionize banking. This microservices-based cloud architecture enables large banks to finally unlock their potential by transforming their core banking applications rapidly and at scale. Larger banks can renovate their core banking applications without compromising their end goal of a full digital transformation to a cloud-agnostic, cloud-native architecture, one component at a time. This is an alternative to the already successful build and migrate approach where, banks can build a new digital stack while continuously migrating products and customer bases from their legacy systems.
We have a proven track record of helping banks to digitally transformation. Our high-performing clients using Temenos software have achieved industry-leading cost-income ratios of 25.2% and returns on equity of 25.0%, 2X better than the industry average. Only Temenos has the advanced technology and depth of banking expertise and to deliver this. “
Temenos Transact microservices leverage cloud-native, cloud-agnostic technology to improve efficiency by allowing banks to scale quickly and elastically while benefiting from multi-cloud resilience. Temenos gives banks freedom of choice to deploy software on premise, in any public cloud, or as a Temenos SaaS.