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NEWS Welcome to the real world Alex Hamilton reviews Temenos Community Forum 2017
Senior Reporter Alex Hamilton
for 2017’s Temenos Community Forum, held in Lisbon, Portugal during April. Despite challengers, startups and disruptors trying to get their hands on banks’ market share, they’ve yet to succeed. Banks, reckons Temenos, have a unique position that can help them duke it out with the disruptors and emerge on top – with a little help from the company’s core system, of course.
“R
2016 was a healthy year for Temenos. It racked up 178 go- lives, averaging a new launch every two days, which saw it top the IBS Sales League Table in a number of categories. It also spent more than $145 million on research and development, an indication of its “desire” to innovate. Major projects with Nordea and Bank of Ireland are proceeding apace, too, with smaller go-lives scheduled over the course of 2017 from both projects.
Temenos also crossed a market cap of $5 billion during 2016, a figure that, according to the opening presentations, is set to hit $6 billion by the end of May.
David Arnott, Temenos CEO, was in combative mood during the first morning’s sessions. Time is ticking away towards a doomsday, he said, in which the FinTechs and big technology players can get their hands on the banks’ bread and butter. PSD2 will bring about a sea change in the industry, but before the clock strikes zero banks have a chance to position themselves as “partners” to the customer. Technology has been defined by three basic drivers since 1900 – needs, wants and engagement – and the unlimited data that consumers have access to has left them attention-short.
eal world FinTech” was the theme
“There’s a lot of froth about FinTech,” said Arnott, but it is no longer threatening market share. Where startups are causing damage is to price. To compete with that, banks need to meet several digital targets and they can only do that with a strong core. Switching to a fully- digital core is “absolutely essential”.
At a press lunch, Arnott further stressed Temenos’ focus on a long-term strategy to aid banks in core replacements. “We’re not affected by share price,” he said. “To be honest we could reduce our research and development budget by $100 million and sit happily on that extra capital but we want to support projects years down the line.” Using that strong research base will help Temenos carve itself into the top echelons of the industry: “We know we’re going to dominate the space.”
“We go to companies and have a very clear message – this is a two-year cycle,” Arnott continued. If the vendor’s opponents go to the same companies and claim it can be done in one year then it’s on them to deliver. Arnott added that competitors will often end up delayed and with the customer unhappy.
Tier 1 and Tier 2 banks are the priority for Temenos now, though Arnott insisted that it is still catering to firms all of sizes. Its tiered software system enables the same system (with a few modifications) to cater to the smallest and largest of institutions. Despite that, gaining business from Tier 1 and Tier 2 banks in the new few years will be “where the battle is won and lost”.
Elsewhere at the event IBS Journal caught up with Mark
www.ibsintelligence.com © IBS Intelligence 2017
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