Swissquote is a Swiss bank like no other. Founded in 1996, it aims to ‘democratize banking’ by providing free, real-time access to prices on international securities exchanges, along with services including private banking, wealth management, multicurrency credit cards and cryptocurrencies.
Innovation has been hardwired into Swissquote’s DNA from day one. Having been the first pure digital bank in Switzerland, Swissquote is today one of the world’s leading online currency trading service providers. The bank’s online portal, which enables users to access their accounts as well as information on global stock exchanges, currently receives two million hits every month.
Driving internal efficiencies
To maintain this track record of success and attract new business, Swissquote strives continuously to find new efficiencies and innovations. Specifically, the bank looked to increase internal efficiency by streamlining many back- and middle-office workflows. By eliminating time-consuming manual workflows, such as the processing of thousands of daily transactions, Swissquote wanted to free up resources to focus on value-add tasks—including development work on its in-house-developed online trading portal.
As a business that began life as a financial software provider, Swissquote has always placed cutting-edge technology at the heart of its growth strategy. When it decided to refresh its core banking system, only a best-of-breed offering would suffice.
Transforming core systems
The bank previously relied on an aging core system that was built on an accounting and performance management platform, and required extensive customization as customer and transaction volumes increased. In its place, Swissquote looked to deploy a modern core banking solution with rich digital capabilities.
Lino Finini, Head of Back Office and Banking Applications at Swissquote, explains: “We wanted to find a cutting-edge core platform that would enable us to automate key processes and scale seamlessly as customer volumes increased. When we started to assess potential vendors, we also looked for easy integration with our current environment, including our Java-based application servers and front-end systems.”
Finding the right fit
After assessing core banking solutions from four market-leading vendors, Swissquote decided to implement Temenos T24 Transact along with Temenos Integration Framework. The bank runs the core platform on its Java Enterprise Edition application server and uses Temenos Integration Framework to leverage its existing middleware message broker to connect its front-end systems with Temenos T24 Transact.
Lino Finini continues: “Of the core banking solutions that we looked at, Temenos offered the most sophisticated functionality by some distance, and was the only vendor with a platform framework to connect the different components of our ecosystem. Another impressive factor was the long-term technology roadmap presented for its core and integration solutions, which gave us confidence that we had identified the right partner.”
Implementing and integrating
Working alongside expert teams from Temenos, Swissquote completed the implementation of Temenos T24 Transact and Temenos Integration Framework in just 10 months. The bank now makes extensive use of the core platform’s straight-through-processing (STP) capabilities to automate and accelerate back- and middle-office workflows, such as transaction handling. As customer volumes increase, Swissquote can easily scale the solution by adding additional applications servers as and when required.
Lino Finini adds: “Going live after only 10 months was a great achievement, made possible by the expertise of the Temenos and their willingness to provide on-site solution architects. Since then, we have been impressed by the scalability of the platform, which supports our ongoing growth, and the multi-company capabilities, which have been useful as we launched operations at many international locations beyond Switzerland.”
The Temenos solution also helps Swissquote’s IT team to operate more cost-effectively. As Temenos Integration Framework utilizes industry-standard Java Enterprise Edition specifications and standards, the bank has been able to transfer its existing skills and knowledge and avoid the need to invest in additional training or to hire vendor-specific solution specialists.
Optimizing internal operations
Working with Temenos, Swissquote has achieved its strategic goal of developing smoother, faster workflows and increasing efficiency. Soon after going live, the bank achieved 99.9 percent straight-through-processing for the tens of thousands of transactions it handles each day. This exceptional level of automation has made it easier for Swissquote to process rising business volumes quickly, and helped it to continue its upwards growth curve.
This enhanced efficiency has translated into improved financial performance, with operating expenses declining and overall profit margins increasing. In 2018, for example, Swissquote achieved an operating profit margin of 25.1 percent and increased its operating income by 14.3 percent.
Paolo Buzzi, Chief Technology Officer at Swissquote, adds: “The Temenos solutions enable us to protect our financial margins and build towards a more profitable future—the level of automation and efficiency that we have introduced to our workflows has been outstanding.”
Delivering quality service with lean operations
Streamlined internal processes boost staff productivity at Swissquote, freeing employees from repetitive, manual tasks and ensuring more time are available for revenue-generating activities. In particular, the bank can dedicate more resources to improving its front-end virtual interface—helping Swissquote strengthen its position as an innovator in the digital banking sphere in Switzerland.
Harnessing the automation capabilities of the Temenos solutions also enables Swissquote to keep headcount low. Even as customer numbers continue to grow, the high level of STP provided by the core platform means the bank does not have to take on huge numbers of extra full-time employees. In 2019, Swissquote services a customer base of 339,000 with just 60 middle- and back-office staff—a ratio of one FTE to 5,650 customers.
Lino Finini concludes: “From the start of the core banking project, we felt that Temenos was committed to our success, helping us to optimize our back-end environment and processes, and building a platform for profitable growth.”