The banking world is undergoing a paradigm shift in today’s rapidly evolving financial landscape. Traditional institutions are at a crossroads, faced with the daunting task of adapting to a digital-first era. As technology companies increasingly shape and distribute financial services, the need for innovation, agility, and sustainability has never been more urgent. Adopting Cloud and Software-as-a-Service (SaaS) models is the key to addressing these challenges.
This new white paper explores the trends driving the SaaS model. We highlight how the approach taken by SaaS vendors like Temenos is helping boost productivity while reducing costs and creating new opportunities through composable banking. We evidence it with examples of financial organisations that employ SaaS and have achieved significant performance and customer experience gains.
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Embrace the Power of SaaS for Banking Evolution
Cloud technology has already proven its transformative capabilities by providing financial institutions with a more flexible, scalable, and secure approach to managing their IT systems. The migration to a cloud-based SaaS model has become a competitive necessity. It offers an end-to-end digital infrastructure that enhances performance, ensures always-on availability, and elevates service delivery. In an era where customers expect one-click convenience, functionality, and engaging experiences, SaaS is the next generation of IT outsourcing that enables banks to stay competitive.
No more worrying about maintaining complex software
With SaaS, banks no longer bear the financial burdens and constraints of maintaining and upgrading hardware and software through on-prem hosting. Scalability and security are greatly enhanced, bolstering regulatory compliance and ESG commitments. Core services, such as payment processing, become streamlined and refined. Furthermore, SaaS facilitates the integration of advanced technologies like AI and machine learning, allowing banks to introduce embedded finance and new services to the market swiftly.
Market Overview: Adapting to New Market Forces
To thrive in the digital-first era, banks must emulate the strategies of tech giants, who leverage digital channels to deeply understand their customers, aligning their needs with tailor-made services. Banks need to harness vast amounts of data and convert it into descriptive, predictive, and prescriptive analytics, akin to the practices of GAFAs (Google, Apple, Facebook, and Amazon). SaaS excels at onboarding and supporting advanced analytics, AI, and machine learning to process this data.
Legacy technology, managed in-house, constrains banks from delivering timely innovation and addressing environmental concerns. The slow pace of incremental tech upgrades cannot keep up with the demands of the modern market, leaving banks exposed to fintech competition and regulatory pressures.
Capturing the ‘Netflix Effect’ with SaaS
Most banks have already embraced the cloud, with 72% of IT executives favouring a cloud strategy for products and services. By implementing SaaS end-to-end, banks can manufacture and distribute highly personalized products and services on demand, 24/7/365. In other words, working with a SaaS provider can achieve the ‘Netflix effect’ for banks, providing an exceptional customer experience.
Four Key Drivers for SaaS Adoption
New Banking and Payment Services
SaaS enables banks to provide tailored products and services across any channel, meeting the expectations of e-commerce and mobile commerce trends
Environmental, Social & Governance (ESG)
SaaS and cloud technology significantly reduce carbon emissions and improve sustainability, helping banks meet environmental targets beyond Scope 1 emissions.
Fintechs and challengers use disruptive technologies to offer competitive pricing and superior customer experiences. Banks must embrace SaaS to stay competitive in this evolving landscape.
SaaS provides an end-to-end solution that aligns with operational, regulatory, and customer-centric goals, enabling banks to evolve, innovate, and compete effectively in the digital economy.
SaaS in Action: Real-world Success Stories
Our white paper details the experiences of Alex Bank, Flowe and Barko Financial Services who all use Temenos SaaS.
Collaborate with Temenos for SaaS Transformation
The adoption of SaaS is becoming pivotal in the financial industry’s evolution. Incumbents and emerging players alike must make SaaS a fundamental part of their operations and collaborate with digital transformation experts like Temenos. Temenos Banking Cloud supports over 700 SaaS customers worldwide, providing continuous updates, scalability, governance, security, and depth of service.
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Unlock The Future Of Banking
Temenos is a global leader in composable banking, empowering over 1.2 billion people around the world with state-of-the-art customer experiences and top-performing solutions. Its open platform enables clients to achieve remarkable returns on equity and cost-to-income ratios.
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