At a Glance
● 4 months to implement Temenos core banking platform
● 50-70% faster timeframes for new product launches
● 6 months to launch new online mortgage products
Next Bank is a native digital challenger bank headquartered in Taipei, serving retail customers. It launched in January 2022 and is one of only three banks in recent years to have obtained a digital banking license in Taiwan. It is committed to creating banking services that customers may never have imagined with innovative thinking, design aesthetics, and friendly experiences. Its main shareholder is not from a traditional banking background, but instead is Taiwan’s largest telecommunications company – Chunghwa Telecom. That goes some way to explain its challenger mentality.
The speed with which Next Bank has captured market attention will encourage Taiwan’s older banks to innovate, predicts Eric Lee, its Chief Information Officer. “Many banks in Taiwan have been established for a long time and are relatively rigid. For them, transformation is a heavy burden.” He offers mortgages as an example of the lack of innovation in the sector. “In the traditional housing loan experience, customers need to go into a bank branch to complete their application. With Next Bank, customers can do everything on their mobile. I think this is a pioneering work.”
This new online mortgage offer was built and launched in just six months, using the Temenos core banking platform. “Our entire mortgage business, from project approval to overall launch, took only six months,” explains Eric. “That speed is a huge competitive advantage, and will become more so as we launch new products into market.” That short timeframe is largely down to the rapid deployment of the Temenos core banking platform, which took just four months. “We were so impressed by the quick and smooth implementation of the Temenos core banking platform. It meant we could get to work earlier on building our mortgage offer,” adds Eric.
Eric highlights that the speed with which Next Bank launched its new mortgage service has created a stir in the sector. Shortly after the launch, Taiwan Bank, the nation’s largest bank, sent one of their top designers to Next to exchange lessons on how to create a 100% online mortgage product.
“This was a great endorsement of the approach and progress that Next Bank has made is such a short period of time, and illustrates how the Temenos core banking platforms is front of mind for any bank when it comes to creating new digital services.”Eric Lee, Chief Information Officer at Next Bank
Configurability the key
Mortgages are just one service in Next Bank’s new product portfolio, alongside accounts, loans, and insurance. It has all been built and runs on the Temenos core banking platform. Key to the choice of Temenos was the configurability of the platform, explains Eric. “Like every country, Taiwan has specific regulations that differ from other countries. Off-the-shelf solutions would have been very painful for us to customize and integrate. With Temenos this capability is built-in, so launching a new product is much faster.” As an example, the six months it took to launch its online mortgage product represents a 50-70% reduction in the typical timeframes for these projects.
Next Bank will be making the most of this capability. Its next product offers—corporate management and wealth management—are expected to launch very soon, with foreign exchange planned for Q1 2024.
More capabilities under one roof
The breadth of integrated capabilities included on the Temenos core banking platform has made it easier and faster for Next Bank to quickly secure a market presence.
“Not yet two years old, Next Bank already offers the most complete product line of any digital bank in Taiwan, thanks to the extensive choice of modules and the ease of integrating them with our existing products. So unlike other banks, our IT team is never a block to the business.”Eric Lee, Chief Information Officer at Next Bank
The assurance of experience
Reputation was another key reason why Next Bank selected Temenos. Eric notes that Temenos was able to demonstrate deep knowledge of the Taiwanese market and a successful track record of deployments with other banks in the region. For example, in 2022, Shanghai Commercial and Savings Bank appointed Temenos to replace its legacy core systems. The success of that deployment gave Eric and his team the proof they were looking for. And plans for Temenos to open a dedicated support hub in Taiwan have provided further reassurance.
“What really stands out about Temenos is how it balances the advantages of global scale with the forensic knowledge of specific markets.”Eric Lee, Chief Information Officer at Next Bank
Other institutions in Taiwan are looking at the Next Bank story with interest. “The balance of standardization and configuration of the Temenos composable banking platform delivers the agility, speed, and cost-effectiveness that can be a good option for legacy and neobanks alike,” says Eric. It also means that separate bank branches can use the same instance of the platform, rather than needing to deploy their own core system. And the extra competition will be a good thing, he adds. “In this way, we can have more industry exchanges, which is helpful for talent training and innovating the ecosystem.”