Temenos Value Benchmark
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The Temenos Value Benchmark – Maximizing Business Value From Your Investment in Information Technology

Kanika Hope
Blog,
Kanika Hope – Chief Strategy Officer

We all know that disruptive technologies like Cloud/SaaS, Microservices, APIs and AI are having a profound impact on the way banking services are delivered and consumed today. This is leading to the twin trends of digital and open banking, and hence changing the very structure of the banking value chain. Meanwhile, non-traditional entrants like the technology giants, neo-banks and fintechs, are leveraging these technologies to compete in banking, and that too with a cost base 30-60% [1] lower than incumbent banks.

Gregory N. Hill, Managing Director, ANSA Merchant Bank Limited in the Caribbean, states “It is an exciting time to be in banking. There are radical changes taking place in the way that banks operate, that are being driven by technology. We’re finding that the conversation is changing in the boardroom as IT becomes a driver of business strategy and banks are searching for ways to differentiate themselves in the present era.”

However, compared to other industries, only 27% [2] of overall spend in banking is invested on innovation and growth, whilst the rest is spent on keeping the lights on or on non-discretionary regulation. In the past, banks did not have a good track record when it came to business and IT alignment when embarking upon transformation projects.

Therefore, before undertaking any IT project, banks need a strategic and objective view of technology requirements and cost-benefits now more than ever before. They need answers to questions on how they are performing compared to peers on key operational metrics as well as industry best practices, how to prioritize long term vs short term investments and how to build robust business cases that include all IT and business benefits and costs.

To address this, we launched the Temenos Value Benchmark – a strategic program where we collaboratively work with our clients to understand the drivers of business performance in banking, the benefits of technology, and how well banks are doing compared with their peers. Our participants receive a customized report with trends, insights, comparisons and recommendations structured around the banking value chain. Today, we have more than 60 retail, corporate and private banks in the program across 33 countries. Through the Temenos Value Benchmark engagements, we have had rich discussions with over 600 senior business and IT executives across our participant base.

Data-driven insights to support your business strategy

Banks have leveraged the insights from the benchmark in several ways ranging from understanding their digital capabilities, streamlining operations to building their growth and expansion strategies.

As Jeff Wright, SVP, Equipment, Digital & Client Solutions, Canadian Western Bank says, “We are  always trying to trade off things that we could do to drive growth in the short-term between longer term plays like getting ready for Open Banking, which is three to four years away in the Canadian market. We are even evaluating our investments in our data capabilities. The benchmark showed us that other banks are in a similar place and looking to invest right now to build these capabilities, which verifies the decisions we are looking to make.” Furthermore, Azfar Karimuddin, SVP, Information Services, Canadian Western Bank adds “The benchmark helped answer questions about our areas of investment that are relevant to us as leaders of the organization, as well as our Executive Committee and Board Members.”

For Julius Baer operating in the private banking space in Europe, the landscape is rapidly changing as technology transforms relationship-based client interactions and end-to-end operations. Thomas Fehr, COO EMEA and Americas says “I was looking less at sales and growth and more on the operational side of the business. One of my priorities is in the area of compliance and specifically false positive alerts which is a significant metric in private banking. We have a lot of manpower invested in this area, and the benchmark showed us how we can streamline and optimize our operations.”

Gregory Hill of ANSA Merchant Bank has a vision to expand and grow internationally. He rightly recognizes the need for a reliable and stable technology platform that can integrate with systems in local markets that they choose to enter. He says, “From a CEO’s perspective I am looking at our return on equity, growing shareholder value, customer retention, customer growth, and operating efficiency. As we expand with every acquisition and new product launch, we are trying to get metrics to understand cost of customer acquisition, speed to market and level of customer engagement. Using the technology we have now and with the Temenos Value Benchmark insights, we are able to pull data we did not have access to in a meaningful way; to customize our products and services, to grow market share, and to deliver a reliable and stable level of performance.”

To hear more insights from our C-level participants, watch the full webinar replay here

To find out more about the Temenos Value Benchmark, visit the web page here


[1] McKinsey analysis
[2] Celent 2019: 2018 Global average IT spend by Banks in new investments