At a Glance

● 50% reduction in time required for end-of-day processing

● Achieved a 200% uplift in mainstream core processes​

● 6 months to upgrade the solution supporting loans, bonds, and deposit operations

● Improved currency management and distribution across banks

The State Bank of Pakistan is a critical hinge in the country’s financial system. As the nation’s central bank, it holds responsibility for securing economic stability through the regulation of monetary and credit systems while aiming to encourage economic growth and development. Achieving these goals means the bank requires the most reliable, advanced infrastructure—and, as 2015 came into view, it decided the time was right for a comprehensive update of its core systems.

Since 2000, the State Bank of Pakistan has been using Temenos Solutions, when it implemented two instances of Globus G11 software—the forerunner to Temenos core banking—one for its currency operations, and another for its banking functions. But as time and technology moved on, the bank realized it needed a more open architecture to support greater integration with other systems.

The Upgradability Business Model

Impressed with the latest Temenos software release, the State Bank of Pakistan decided to upgrade from Globus G11 to Temenos core banking R15. But this created a new challenge, as while the bank had been using the older solution, the Temenos software had undergone a complete re-architecting, with major functional changes. In effect, the State Bank of Pakistan was looking to skip 15 years of new releases in one go.

Luckily, the bank discovered it could take advantage of flexible upgrade paths engineered by Temenos.

Managing Business & People Change

At the outset, the State Bank of Pakistan identified managing and mitigating risk as the main requirement for the implementation strategy for the upgrade project. The bank did not simply approach the changeover from a narrow technical viewpoint, but more importantly, realized there would be major implications from a business process and people change management perspective.

To smooth the 15-year release jump, the State Bank of Pakistan decided to perform the upgrade in two stages back-to-back, with each upgrade a big bang in itself. In the first step, it would upgrade the Globus instance for its currency operations, along with the underlying hardware and operating systems, to a more open environment. One of the key objectives of the first upgrade was to gain knowledge and build experience to make the second implementation a simpler task.

Valuable Lessons Learned

The value of this staggered approach was clear by the end of the project: while the first upgrade took 12 months, the bank completed the second—for the solution supporting its loans, bonds and deposits operations—in just six months.

The implementation highlighted several lessons for people and business change management. Firstly, training and face-to-face support for users was vital to build up their knowledge of the systems and familiarise them with the new processes. Also, data cleansing before the upgrade, along with extensive and exhaustive testing, was hugely important to the success of the project.

By completing multiple rehearsal activities, the bank could maximize user involvement and seize the opportunity to verify data following each run-through. This rigorous approach also enabled the bank to establish processes for robust issue tracking and rapid resolution of major issues encountered during testing.

Key Benefits of the Upgrade

Although running upgrades is often regarded as simply an IT and technical exercise, State Bank of Pakistan recognized that the project would be vital to its overall operations and open the door to continuous business process improvements. Senior executives across the bank monitored progress, provided constant support, and ensured the upgrade investment plans aligned with the expected outcomes.

With the R15 Core Banking solution, State Bank of Pakistan enjoys improved scalability, integration and overall systems performance, along with simplified access to new product updates and periodic fixes. New functionality available to the bank includes role-based dashboards, process workflows, and workflow user events.

These new features, together with other enhancements, have led to greater operating efficiency and productivity, including a 50% reduction in time required for end-of-day processing. The solution also keeps the bank up-to-date with the latest SWIFT messaging standards and global financial regulations.

From the IT perspective, the new Temenos solution is much simpler to maintain and manage, helping the bank to achieve greater product innovation, flexibility and configurability. By moving from a version based on a client-server architecture to the browser-based R15 solution, employees also enjoy easier access, especially those working in the bank’s 16 field offices.

Together, these business and technical improvements will eventually result in reduced total cost of ownership of software and hardware, which will in turn provide additional resources for State Bank of Pakistan to invest in more platform enhancements.

We partnered successfully with Systems Limited

Systems Limited is a global technology public limited company founded in 1977 with the mission to offer holistic transformations to its clients. 

Learn more about Systems Limited

Banco Multiva is a relative newcomer to the Mexican financial sector. Founded just seven years ago, the bank aims to challenge more established institutions with high-quality, responsive services. To achieve this, harnessing cutting-edge technology is crucial. Banco Multiva utilizes Temenos core banking solutions to create innovative products for its retail and corporate clients. The Temenos solutions help the bank to evolve its products in tune with constantly changing customer requirements, ensuring client satisfaction and contributing to its competitive advantage over its rivals.

O-Bank is Taiwan’s first digital-native bank. It was initially established in 1999 as Taiwan Industrial Bank, a corporate bank. In 2017, it acquired a commercial banking license so that it could enter the retail space and restructured into O-Bank, or ‘Wangdao’ in Chinese. O-Bank’s Chinese name is drawn from a spirit of inclusiveness, walking the right path, and fulfilling oneself by benefiting others. The English letter ‘O’ represents fulfillment and the unending cycle of life. The bank is committed to sustainability and is focused on delivering innovative financial services products that create win-win outcomes and mutual prosperity for consumers.

Venturing into new markets

Successfully entering the retail banking space is a challenging feat, particularly in Taiwan which is often described as overbanked.

“We only had a year to prepare, build, and launch our retail business,” says Lichen Hung, O-Bank’s Chief Information Officer. “This was a challenge. Since we are a mid-sized operation, we don’t have significant IT resources like enterprise-sized banks, so we are not equipped to build our own infrastructure.”

That’s why O-Bank sought a comprehensive core banking platform, one that could not only enable it to launch quickly, but also support its need to develop and launch personalized, customer-relevant products rapidly.

“Customers are no longer prepared to wait for new products, so we need to act fast,” explains Lichen. “We needed a flexible system to facilitate this and help us deliver personalized offers to our customer base.”

Speed and scalability

Lichen and her team began searching for a solution. Unfortunately, the first two options they found would take more than a year to implement. But then they discovered Temenos.

“The Temenos core banking platform stood out,” Lichen says. “Following discussions with the Temenos professional services team, who shared their previous implementation experience, we were convinced we could make our launch deadline.”

O-Bank was also impressed by the Temenos core banking architecture.

In 2016, O-Bank began the implementation. Everything went smoothly and, although there were some challenges along the way, O-Bank was supported by the Temenos professional services team, which was on hand to provide coaching and offer advice.

“The Temenos team solved all our difficulties. As a result, we met our deadline and, within 12 months, we were able to open our doors as Taiwan’s first digital-native bank.”

Lichen and her team have never looked back. Today, O-Bank has over half million customers, $21 billion USD in assets, and over $100 million USD in profits.

Much of this success is owed to O-Bank’s new-found ability to operate at speed. For example, with Temenos core, the time to onboard a new customer was reduced from seven days to just two or three hours.

Faster time to market

Temenos core banking is also helping O-Bank to launch new products in a matter of days.

Using Temenos core banking’s in-built automation tools, O-Bank can personalize new products to specific customer segments without manual intervention. For example, O-Bank has recently launched a multitier deposit account that pays different interest rates depending on the account holder’s financial circumstances. This approach is already proving a hit with customers. In the quarter following O-Bank’s launch of its multi-tiered deposit account, it witnessed a 12% uptick in account openings and a 75% increase in deposit balances.

A growing success

Since its establishment, O-Bank has grown its customer base each year. These customers are sticking around: “Our success comes from attracting new customers and then keeping hold of them,” Lichen says. “Loyalty is a priority”. We partner with a customer, and then take care of all their financial service needs over their whole life.

O-Bank isn’t resting on its laurels. Thanks to its use of Temenos, it is preparing to take advantage of the opportunities arising from open banking by leveraging APIs to connect with external ecosystems.

This will help it to continue to innovate.

Powerful partnerships

In the longer term, O-Bank plans to migrate its corporate business to Temenos core, too. “Having one core platform is our ultimate goal,” Lichen says. “We will achieve it through our long-term, strategic partnership with Temenos.”

When asked if she would recommend Temenos to other banks like hers, Lichen replied with an emphatic ‘yes’.

“If you want to launch a digital bank from scratch, then Temenos is your best solution,” she says.

At Glance

• Around 4 million daily transactions attributed to its core banking solution

● 91.5% increase in members deposits

● 40,410 new members while reducing slightly the number of employees

Banco Credicoop Cooperative Limitado (BCCL) is a large cooperative bank headquartered in Buenos Aires, Argentina. The bank provides a wide range of services to small and medium enterprises, cooperatives, social enterprises, and individuals through the bank’s 276 branches and 24 service centers.

As a credit co-operative the bank is owned by its members, who hold over 2.65M accounts with the Bank. Being “member-owned” drives a focus on maximizing efficiency and cost control, which is a primary objective of the bank and a catalyst for the decision to replace its core banking system as part of a digital transformation.

Increasing Complexity and Regulation

The goal of this strategic project was to have the necessary technology to ensure the bank could function efficiently in an increasingly complex industry while meeting the constantly changing regulatory requirements. The bank needed to achieve this while maintaining and subsequently reducing costs.

After analyzing 53 different possible solutions in a formal selection process, the bank selected Temenos core banking as it met its demanding technological requirements.

Why is Technology Choice important?

The Temenos core banking system supports a number of industry-standard technologies off a single version of the underlying program code. To BCCL, this meant that they could make the decision on the application platform, the Business Process Management (BPM) tool, high availability architecture, operating system, and database largely independent of the Temenos core banking System. Enabling this choice provided BCCL with the ability to evaluate the technology infrastructure based on cost, support, reliability, etc., and did not lock the bank into this choice. This translates into lower costs and higher service levels for the technology platform that Temenos core banking runs on.

BCCL chose Red Hat, a certified partner of Temenos, to support the implementation of Temenos core banking on an Oracle 11g database. Red Hat deployed the Red Hat JBoss Enterprise Application Platform (EAP) as an application server in cluster mode for the Temenos software, as well as the Red Hat JBoss BPM Suite and Red Hat Cluster for high availability.

Managing the Migration Risk

The bank, right from the outset, understood the importance of the business change impact from an employee and customer perspective and wanted to ensure that the benefits of this strategic transformation project were actually achieved. It chose to take an incremental renovation phase-by-phase approach to minimize risk and deliver benefits sooner, while the whole project may take longer to deliver.

Migrating 276 branches, 24 service centers and 2.65M customer accounts is not a trivial task. Given the incremental step-by-step approach, over 130 interfaces were created to enable this progressive co-existence with the bank’s third-party and in-house applications. The bank also created a test bed of 25,000 test cases to ensure that every aspect of the new core banking system and its co-existence with the broader application landscape were tested effectively for both functionality and performance.

Embracing the Digital Revolution?

BCCL now has the core foundations and agility to take advantage of the digital revolution happening in Argentina and throughout Latin America. In 2017, the bank increased the number of members by 40,410 while keeping its number of employees slightly lower than the prior year.

In the two years since the end of 2015, the amount of deposits has increased by 91.5%.

The bank now has a strategic partner in Temenos who helps unravel the complexity while addressing the constant regulation through enhancements and new functionality made available via annual maintenance updates.

BCCL is certainly maintaining, if not reducing, costs, increasing productivity, and, most importantly, delivering a superior customer experience.

We partnered successfully with Red Hat

Providing a clear modernization path to adopting a cloud strategy for core banking, digital banking, wealth management, fund management, and payments systems.

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Varo Bank is re-imagining personal banking. Launched in 2018, Varo is the first consumer fintech granted a national bank charter in the US. Its mission is to improve the financial lives of its customers with a unique range of high-yield savings accounts, spend tracking and cashflow. Varo provides innovative digital banking services to 180 million Americans currently underserved by the traditional system.

Varo’s efforts to build a better kind of bank powered by modern cloud technology have been recognized nationally. Varo has been named as one of the Inc. 5000 2023 fastest growth companies in the U.S.

One of the main factors that differentiates Varo is its technology platform. The bank based its architecture around open API’s and the cloud. Varo partnered with Temenos and is using its core banking, Temenos Payments and Temenos digital banking services on the cloud. For Varo it was very important to find a bank partner, who could support its hyper efficient cost model in order to pass real value back to its consumers.

Using Temenos cloud-native APIs, Varo can develop new products such as home loans and credit services, launch them rapidly to the market, simplify compliance with American banking regulations, and scale operations seamlessly as momentum builds behind its customer-first approach.

Temenos Banking Cloud has helped the bank to bring innovative products to market faster and at scale to meet the surge in digital banking. Temenos Banking Cloud enables Varo to scale based on customer demands, deploy new products quickly, and drive down operational costs substantially. The broad functionality of Temenos Banking Cloud allows Varo Bank to meet specific business needs and support its regulatory requirements.

With a lower cost/income ratio compared to traditional banks, Varo now offers market-leading digital banking services at a lower cost and expands financial inclusion for millions around the US.

Banco Itaú, the largest bank in Latin America, knows that it has no time to rest on its laurels. To protect its hard-won market share, the bank continually seeks to invest in the latest banking solutions to meet the fast-changing requirements of its clients. To enrich the product range for its international private banking operations, Banco Itau will deploy Temenos Wealth on the cloud. The platform will deliver integrated core banking, digital channels, analytics and wealth front office functionality. Following a big bang implementation strategy to accelerate time to value, Banco Itau will be able to bring new services to market faster, build an attractive, user-friendly online presence, and scale seamlessly as business volumes grow.

In 2020 Itaú Group extended its relationship with Temenos, choosing SaaS-powered Temenos Wealth Front Office and Temenos core banking – fully configured, pre-packaged solutions with embedded local compliance for the bank’s Swiss and U.S. operations. The front-to-back advanced AI technology of Temenos Wealth will deliver state-of-the-art omnichannel mobile and digital banking applications to enable Itaú Group to offer differentiated digital experiences to its international private banking clients. The shift to a single SaaS digital banking platform will drastically reduce the bank’s time-to-market, IT costs and operational complexity and achieve an improved cost/income ratio.

At a Glance

• Offers exceptional levels of security to account holders
• Provides up-to-date digital banking capabilities
• Increases cost-efficiency; employees spend less time and resources managing IT infrastructure in the data center
• Scale its digital banking infrastructure quickly and easily in line with rising member volumes

Baxter Credit Union (BCU) strives to find innovative ways to improve the financial well-being of 320,630 members across the United States and Puerto Rico. This could mean introducing personalized services that help members manage their finances more proactively, providing faster access to key lending products, or offering a more intuitive online experience. All in all, BCU places a premium on continuous improvement.

Jim Block, Executive Vice President & Chief Operating Officer at Baxter Credit Union explains: “Across our business lines, we are always planning ahead and thinking not only about how we can meet evolving member requirements but also how we can get a step ahead of the curve. To achieve this, we naturally forge close links with our network of technology partners to ensure we have access to the most advanced digital capabilities.”

In 2016, Baxter Credit Union (BCU) faced the need to upgrade from version 10.31.20 to version 15.01.47 of Temenos digital banking, spanning the Collection, Loan Origination, and Service modules. The project alone was already considered a major upgrade, as it encompassed launching the $2.8 billion credit union on Temenos’ most recent “person-centric” technology, a panoramic view of account holder relationships. BCU took it one step further and asked to do what had never been done: take the Temenos collection, loan origination, and service to the Cloud.

Situation

BCU’s decision to move to the cloud crests the wave of financial institutions that have begun to examine moving to hosted environments. Historically, the cloud has been viewed with apprehension and distrust by the financial services industry. In the United States specifically, following the wave of security breaches across retail store chains, hospitality organizations, and even the United States government itself, concerns surrounding cybersecurity are at an all-time high, reflected in heavy government regulation. The first task for BCU, Microsoft, and Temenos was to ensure security.

“Temenos handles a large amount of account holder data. Combined with the fact that this was the first time these modules were being implemented in the cloud, we knew we needed to undergo rigorous testing to ensure that not only was everything functioning properly in an all-new environment, but also that it was secure.” – Temenos Executive explains.

US-based BCU wanted to decrease costs while increasing scalability and speed-to-market. In 2017, they became the first Temenos customer to take the Temenos Collection, Loan Origination, and Service into the Cloud

While some organizations might view being an “inaugural customer” as a risk, BCU instead saw the chance to pull ahead of its contemporaries. Additionally, they saw the benefit of moving away from maintaining data centers and reducing IT overhead, which would allow them to focus less on managing systems and concentrate on offering first-class products and services.

“Over the past three years, we’ve made it a strategic objective to move into the cloud wherever the opportunity arises. Our long-term goal is to move all of our vendors into a cloud-based environment. Our vision is to centralize all of our technology so that we can implement uniform processes and skillsets across departments. We are continually investing in technology and innovating in that space. This transition will allow us to increase automation and spin up additional servers more quickly, enabling us to scale and paving the way for growth.” Jeff Johnson – CIO at BCU

Solution

The decision to move to Microsoft Azure led to extensive testing and a thorough audit of their existing processes, making BCU more secure than ever before. Using recent software delivery methodology, the testing and implementation were completed over nine months and included a multitude of checks and balances with continuous collaboration across the implementation teams. During phase one, Temenos and BCU built five environments in the cloud over roughly two months. Phase two was spent upgrading the Temenos digital banking modules to Version 15, fine-tuning processes, and testing that the functionality had not been impacted by the all-new environment. This phase involved a two-pronged approach:

1. Business Unit: Functional testing of the Collection, Service, and Loan Origination modules as BCU jumped four releases
2. IT: environment configuration testing, including firewalls and connectors.

Due to the implementation being the first of its kind, the project involved levels and aspects of security that had not been encountered in previous projects. This meant additional, in-depth testing outside standard parameters from a security perspective, as well as ensuring that the new protocols didn’t inhibit functionality within the system. BCU officially went live in March 2017, with no unplanned interruption to service. With the Temenos digital banking modules now hosted in Microsoft Azure, BCU has gained multiple layers of data protection, including data encryption, auditing, and Azure’s unique threat detection offering. Since the implementation, BCU has seen an improved ability to scale on demand, enhanced disaster recovery capabilities, and optimally sized hardware for their volume.

With the Temenos digital banking upgrade completed successfully, BCU has access to the latest digital banking capabilities, including open APIs, automation, and sophisticated decisioning tools. The credit union can now ingest and analyze more data about lending requests, helping to build a detailed, three-dimensional picture of applicants. As a result, BCU makes lending decisions faster, ensuring members enjoy a stronger experience.

We partnered successfully with Microsoft

Microsoft’s Financial Services group helps financial firms leverage technology to amplify the impact their people can deliver to drive business success.

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At a Glance

• 25.1% operating profit margin and increased operating income by 14.3%

• Achieved 99.9 percent straight-through-processing soon after go-live

• Temenos core banking Integration Framework implemented in just 10 months

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.

Finding the right fit

After assessing core banking solutions from four market-leading vendors, Swissquote decided to implement Temenos core banking 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 core banking.

Spokesperson at the bank 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 core banking 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 application servers as and when required.

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.

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 487,847 with just 1,000 middle- and back-office staff—a ratio of one FTE to 5,650 customers.