Swiss core systems provider Temenos is broadening its reach
both in terms of its product offerings and in its strategic
partnerships as it seeks bank business across the globe.
EPI sat down recently with Mark Gunning, Group Retail Banking
Director of Temenos, who briefed us on the firm’s newest
acquisition – the UK-based business intelligence software provider
Lydian Associates Limited – and its new strategic partnership with
the consulting giant Cognizant.
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It is all part of a maturing company seeking better service
relationships for its client banks, Gunning explained.
“These deals are a sign of the maturity of the product and its
breadth and functionality, but what really distinguishes us is our
independence and our openness, and we won’t change that,” he said.
“We will run on any platform, any database, and we are agnostic as
to architecture.”
Gunning said that the strategic partnership with Cognizant stems
from a desire to bring a uniform level of systems integration
expertise to the table.
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By GlobalDataTemenos’s flagship T24 Model Bank product is a packaged core
banking software solution that provides banks with an integrated,
service orientated architecture with support from front to back
office. T24 Model Bank includes pre-configured bank operations and
processes while remaining flexible and responsive to business
change. Its scalability, as underlined by performance tests
undertaken in October 2008 by IBM, means T24 is capable of
servicing of banks ranging from small to up to 25 million
accounts.
As a fast-growing organisation that has doubled in size over the
past four years and is managing an increasing number of core
banking implementations across the globe, Gunning said that Temenos
is committed to strengthening its partner programme to broaden
systemic capacity to market and implement its product. This will
enable the company to improve margins and cash generation during
its next phase of growth.
As part of the partnership agreement, Cognizant is investing in
training its associates to deliver T24 implementations over a
three-year period. It will also work together with Temenos to
establish a global Centre of Excellence. Financial institutions
worldwide will benefit from this best-of-breed partnership as the
joint partnership goes to market, Gunning said.
Cognizant is already engaged on a number of Temenos T24
implementations and will also work with Temenos’ Complementary
Solutions Partners to provide solutions to banks where needed, he
said.
Cognizant’s consultants will be fully trained on implementing T24
Model Bank, will apply the Temenos Implementation Methodology to
all projects and will be able to avail themselves of Temenos
Application Management Services for localised integration
projects.
“What we are best at is software building and installation, and we
work on our own products really well,” Gunning said. “The area
where we need to fill in is in services, particularly as the
clients get bigger. We are playing with some serious Tier 1 banks
with huge projects, and with Cognizant, a lot of the consulting
part is what they really do well.”
Having such a big-name partner on the job is reassuring to banks
taking the plunge and replacing core systems, no small decision,
Gunning said, and one clients take as seriously as any technology
purchase they make.
“It’s genuinely valuable, and also customers demand it,” he said.
“Our response has been sort of ad hoc, turning to IBM on some
things, Hewlett-Packard on others, and we just felt that we needed
a more uniform approach. Their skills are in all the true system
integration… the integration piece is a huge chunk of work, and
they do this so well.”
Likewise, Temenos turned to the acquisition route to add business
intelligence to its offerings with Lydian, which sells a range of
products formerly under the Webform brand (now rechristened
Insight) that allows access to multi-dimensional analysis of a
bank’s data and permit better-informed management decisions.
The products give users the ability to produce desktop reports,
graphics and dashboards – defined according to any specified
parameters or key performance indicators (KPIs) – that are
invaluable in assessing performance, profitability and liquidity,
Gunning said.
“Lydian is our way of providing a data solution back to the
customers – it takes us into the information side of support for
banks,” he said. “Managers can analyse profitability all the way up
to department level, all the slicing and dicing of the balance
sheet, with dashboards for all the managers from branch managers to
the CEO of the bank. The CEO can customise the ten leading ratios
he needs on a daily basis, from customer turnover to all profit
targets, risk-weighted… and he can drill all the way down to a
branch level.”
Temenos will integrate the Webform products with the T24 Data
Warehouse. The T24 Data Warehouse, which was introduced as part of
the 2008 release of T24, is an integral part of T24 with the
benefit of tight integration between operational and management
information. The Webform products will add the ability to
interrogate this data using pre-packaged multi-dimensional analysis
tools.
“The demand for this is incredible,” Gunning said. “These guys are
going as fast as they possibly can… one of the challenges is just
how fast this is moving off the shelf!”
Surveying the global banking technology market, Gunning said that
business in core systems is diversified enough to have remained
fairly steady despite the economy.
“We have 35 offices and customers in 100 countries, so we’re pretty
nicely diversified,” Gunning said. “We go from microfinance
institutions all the way to retail and wholesale giants, so we can
ride the peaks and troughs through our diversification. North
America and Northern Europe are pretty quiet at the moment, but
outside of that, Asia and the Africa/Middle East market have been
less affected, and South America is a reasonable market growth-wise
for us as well.”
Underscoring Gunning’s comments, Temenos’ recorded an operating
profit of $8.7 million in the first quarter of 2009, up 34 percent
compared with the first quarter of 2008. Operating margin jumped
from 7.4 percent to 10.7 percent.
