GENEVA, Switzerland – 26 July 2013 – Temenos (SIX: TEMN), the market leading provider of mission critical solutions to the financial services industry, today announces the publication of “Progressive renovation for core banking system modernisation”.
The banking industry faces an almost perfect storm of change which is undermining profitability and will prompt a rethink regarding technology and system modernisation. Regulation is being tightened, customer loyalty is diminished, competition is becoming more intense and multi-form and there is a revolution in mobile technology.
Large retail banks stuck on branch accounting are operating at high cost, high complexity and low flexibility and this is unsustainable in the light of these structural headwinds.
Banks must therefore renovate their branch accounting systems, but a “Big Bang” replacement is often too risky for the largest retail banks. Some large retail banks have performed renovation in their branch networks but very few, if any, large retail banks have been able to successfully execute a “Big Bang” replacement programme. On the contrary, there is a list of high-profile failures that have cost a lot of money to achieve little business benefit.
The solution is a build and migrate strategy. Build and migrate removes the roadblock to change, not because it is revolutionary but because it is manageable for a typical IT department. A bank’s CIO can be confident in building a new line of business and progressively migrating accounts under controlled conditions. Such a project contains an acceptable risk in terms of cost, time to completion and ultimate success.
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John Schlesinger, Temenos Chief Enterprise Architect, said:
Traditional retail banks are running on old, costly and increasingly redundant batch technology which is hindering competition and allowing new entrants with customer orientated service models to edge in on retail banking customers. The strategy of build and migrate allows a large retail bank to enjoy the advantages of enterprise-ready components quickly, with acceptable technical and business risk.