At a Glance

• Reduce the duration of the close-of-business processes to 2 hours
• Ability to extract daily automated IFRS 9 reports
• Enables the creation of in-depth reports on expected credit losses and asset performance
• Simplifies product development and customization with the latest Arrangement Architecture workflows

Two decades of rapid economic growth have turned Cambodia into one of Asia’s biggest success stories in recent years. While a dynamic retail banking sector has emerged to serve people living in cities, it is the country’s many microfinance institutions (MFIs) that support the rural communities that form the overwhelming majority of the population.

Among the most prominent is Woori Bank, founded in 2003 and one of only seven fully licensed microfinance deposit-taking institutions (MDIs)—meaning it can provide current accounts alongside loans. The MDI pursues a strong pro-poor agenda, offering financial packages that help families save for their children’s education, and providing millions of dollars in loans to help households purchase sanitation products and enable agricultural cooperatives to buy vital equipment.

Woori Bank has won many accolades for social responsibility and financial transparency from leading global development organizations such as the Consultative Group to Assist the Poor (CGAP). And in June 2018, it received another boost as Woori Bank, one of Korea’s leading banks, took over the MDI. As well as continuing its work with Cambodia’s rural communities, Woori Bank is now looking to become one of the major players in the national market.

How to Maintain an Upwards Growth Curve?

With over 60 separate providers, microfinance is a crowded market in Cambodia, and staying competitive is a tough task. For MFIs aiming to remain relevant to customers, there is the temptation to lower interest rates on loans to attract more business, but this erodes profitability. Meanwhile, over-indebtedness among customers is another major challenge and potential curb on growth, especially as financial literacy remains limited in Cambodian society.

Putting in place robust governance structures has therefore been a strategic goal for the government and the National Bank of Cambodia. Over time, they have introduced stronger regulations to align the financial sector with international best practices and accounting standards that require rigorous monitoring of areas such as non-performing loan rates.

The latest step in establishing these solid, sustainable foundations for the sector was the introduction of IFRS 9 accounting standards, which require banks and MFIs to move from reporting on incurred credit losses to expected credit losses. The government set a deadline for all Cambodian financial institutions to comply with the new rules by January 1, 2019.

Tackling IFRS 9 With Temenos

The fast-approaching IFRS 9 deadline posed two significant challenges for Woori Bank. First, the project team had to break down and understand the full requirements of the new regulations. Then, it needed to implement a solution capable of performing the calculations to meet IFRS 9 standards. To achieve these goals, Woori Bank turned to Temenos for an upgrade of its existing Temenos Inclusive Banking core banking systems, including the addition of the new Temenos IFRS 9 module.

Meeting Demanding Deadlines

After kicking off the project in September 2018, Woori Bank gave Temenos and implementation partner MCB Consulting Services Ltd. [MCBCS] just four months to complete the installation. MCBCS took the lead and handled the configuration and testing of the new solutions, with Temenos support. Despite the tight timeframe, the upgrade was ready on schedule and on budget without a single delay.

Mr. Chanveasna Heang continues: “We were extremely pleased with the solution delivery from MCBCS and Temenos. In the past, we have seen many other vendors miss deadlines and exceed budgets. This time, everything ran smoothly thanks to MCBCS’ clear understanding of our requirements and deep knowledge of Temenos Inclusive Banking solutions, and also how technology can truly add as a business enabler.

Creating More In-Depth Reports

Using the Temenos module, Woori Bank can now classify its assets as amortized costs or fair value contracts in accordance with IFRS 9 standards before running impairment calculations to determine expected credit losses. By generating reports providing in-depth, forward-looking assessments of asset value within the Temenos solution, the MDI ensures that it can identify and take timely action in the event of non-performing loans.

Looking Ahead to the Full Benefits of the Upgrade

By upgrading to the latest version of Temenos Inclusive Banking, Woori Bank gained new capabilities that will help it achieve operational efficiencies, improve customer service, and seize a competitive advantage. The MDI has already cut the time it takes to complete close-of-business processes by up to two hours.

Looking to the future, Woori Bank is exploring features within the Temenos solution, including the 360-degree view of individual customer data, which will enable employees to offer more relevant services, and new Arrangement Architecture module workflows that will make it easier to develop and customize new loan and savings products. The MDI is also looking into the Temenos Integration Framework, which it can use to build collaborative projects with partner organizations.

Since its foundation in 1982, Arab Tunisian Bank (ATB) has carved out a position as a top five bank in Tunisia by offering award-winning retail and corporate products. The bank has recently gone live on Temenos open platform for composable banking looking to transform its banking infrastructure to capitalize on the new digital age. ATB is a mid-sized universal bank serving retail, SME and corporate customers with a staff of 1,300 and 134 branches across the country, awarded as the “Best Commercial Bank in Tunisia” by Global Banking & Finance.

The initial phase of the transformation of its core banking systems for retail and corporate business lines with Temenos frees the bank from legacy constraints to accelerate product delivery and digital growth. The second phase of the implementation includes additional Temenos Core Banking Capabilities and pre-composed Banking Services for Digital Banking, Payments and Enterprise Risk Management. On Temenos open platform, it aims to differentiate itself in the market as a customer-centric bank through technology and innovation. Leveraging the platform’s core and digital banking capabilities to power new growth opportunities, drive efficiencies at scale, and deliver seamless customer experiences.

ATB is a mid-sized universal bank serving retail, SME and corporate customers with a staff of 1,300 and 134 branches across the country, In 2017, the bank was also awarded the “Best Commercial Bank in Tunisia” by Global Banking & Finance. With demand for online and mobile banking rising rapidly in North Africa, Temenos’ next-generation platform, built on microservices and APIs, will allow ATB to quickly and sustainably scale its business. Cloud-native and with an ecosystem built around it, the Temenos platform also enables ATB to open up to fintechs and the possibilities of new business models in the future.

We partnered successfully with ITSSA:

ITSS provides high-quality services for banks with Temenos Transact in parts of Africa, Middle East, Asia and Latin America.

Learn more about ITSS

Vista Bank is bringing a fresh approach to the African banking sector. To appeal to customers ranging from individual consumers to small and medium-sized businesses, Vista Bank set out to create innovative, user-friendly digital banking services. To realize this vision, the bank deployed Temenos core banking and Temenos digital banking—providing an integrated ecosystem of core banking, analytics, payments, and digital solutions. With the scalability and pre-configured local best practices of the Temenos solutions, Vista Bank has the platform it needs to achieve its strategic goal of expanding beyond its core markets in Sierra Leone, The Gambia, and Guinea to build a customer base in 15 African countries by 2025.

As its previous banking solutions reached end of life, Coast Capital seized the opportunity to refresh its core environment and introduce more business and product flexibility for its 595,000 members. The credit union—the largest in Canada by membership—deployed Temenos core banking for retail banking, gaining the ability to perform in-depth analysis of customer data that would shape its growth. Armed with deep insights into member preferences, Coast Capital is rolling out more personalized services, ensuring greater customer satisfaction today and in the future.

ACLEDA started life providing credit to small and medium-sized businesses operated by victims of war in Cambodia. Following a strategic shift, ACLEDA entered the banking market, and implemented Temenos core banking to underpin the transformation. Using the Temenos platform, the bank has developed retail services including loans, online accounts, cash management and trade finance. These packages have won ACLEDA the status of Cambodia’s leading commercial bank and enabled international growth in Laos and Myanmar.

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.

Learn more about Red Hat

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.