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Digital to the Core

We have been guiding financial institutions towards their digital future for 25 years.

The digital imperative

In 2010, the Economist Intelligence Unit wrote, "Simply put, there are no alternatives but to become more digital with whatever assets are available."

True in 2010, the need to digitize has grown in urgency every year since – not least for banks.

Producing information goods and services, banking is highly susceptible to new business models and new forms of competition. And they are already emerging – think marketplace lenders, P2P FX providers, crowdfunding platforms and automated investment management.

So, financial institutions must digitize if they are to keep up with new types of competition and evolve to deliver new types of services.

But digitization also offers a chance for financial firms to establish deeper customer connections. Firms can draw insights from customers' data and use them to help customers make better commercial and financial decisions – what we call Experience-Driven Banking. This both capitalizes on banks' competitive advantages and gives them the opportunity to move from being transaction providers to trusted virtual advisors.


The digital challenge

So, what stops banks from becoming more digital?

In many ways, the finance industry is a victim of being a technology pioneer. Financial companies adopted software before a software industry existed. And, in doing so, they built systems that were necessarily bespoke and not upgradeable.

But, the problems have been compounded over time. Since only very few financial institutions have corrected their original mistake and moved to packaged software, firms continue to layer legacy software on top of legacy software. A typical universal bank runs more than 180 applications, written in a piecemeal fashion over decades in languages now not easily supported.

Financial institutions now have significant technology debt which will need to be paid off. According to Celent, financial firms spend more than 75% of their IT budgets maintaining legacy systems. This leaves little budget to invest in innovation just at the time when innovation is most needed

And, unfortunately, there are no shortcuts to digitization. Over the years, many firms have tried to put a 'sticky plaster' on the legacy problem by investing in middleware, stand-alone pricing platforms and siloed channel solutions. But, this created additional complexity while failing to deliver the rich, integrated customer experience that customers want and expect.


The digital guide

More and more financial institutions are now ready to tackle their legacy IT straightjacket. But, where should they start? And how to go about disentangling the spaghetti web of interconnected legacy applications and interfaces?

Financial institutions will need help to navigate from their analog past to their digital future, from legacy to modern, upgradable systems.

There are many options available to them, so it will be important for financial institutions to make the right choice.


The best doctor

When you're unwell, you seek out the best doctor, not the best hospital or the hospital with the most doctors.

There a several reasons why Temenos is the best partner for digitization:

  • This is all we do. Temenos only makes software for financial institutions. This makes us true specialists
  • Over the last 25 years, we've guided over 3,000 financial institutions through IT modernization
  • Because our software is componentized, we offer de-risked and gradual replacements of banks' ageing infrastructure.
  • We work with a broad range of partners, giving our customers choice over the technology they run and giving them access to the best system integration resources on the market.
  • Our software is truly packaged. Choosing anything else will mean replacing legacy with legacy.
  • We commit to spending 20% of sales on R&D annually. As such, our software gets functionally richer and technologically more advanced every year. Once you've caught up, you'll never fall behind again.

If you would like to know more about how Temenos could help your organization to outperform its peers, why not get in touch?