Amidst a backdrop of persistent tough macro-economic conditions and geopolitical uncertainty, the rise of new competition and evolving customer demands, as well as crippling legacy architectures, incumbent banks have an immense opportunity to harness the power of digitization to transform their business. Recognizing our role as a true strategic partner to our clients, we introduced the Temenos Value Benchmark program in 2018 to provide our clients with tangible data-driven insights on the business value enabled by their investment in IT.
Nearly 25 retail, corporate and universal banks across the globe participated in the initial round. An analysis of the data collected to date highlights that our top-performing clients already achieve industry-leading cost-income ratios of 25.2% and returns on equity of 25.0%, 2X better than the industry average. These clients also invest over 53% of their IT budget on growth and innovation rather than on maintenance, which is 2.5 times the industry average. In this paper we share our analysis of the key factors that differentiate high performing banks (i.e. those with better cost-income ratios and/or returns on equity and assets), from the average performers, focusing on the tangible drivers of business performance in the industry.