signed before T24 GBS was introduced and also to the ‘specific nature’ of the banks (Honda Bank, for example, is focused on auto financing). The message from the vendor was quite different in 2008, when then CEO, Andreas Andreades, was quoted in the vendor’s press release as saying: ‘Honda Bank is an important win for Temenos as it signifies our continued growth in the German market and the flexibility and ease of deployment of our T24 Model Bank in other sectors like automotive finance’.


EIH and Honda Bank ‘will benefit from certain features of T24 GBS’, said Luhle, and so would Landesbank Baden


Württemberg (LBBW), which took Temenos’ offering in early 2010 to cover its lending activity. Luhle emphasised that the EIH, Honda Bank and LBBW projects were different in nature to those targeted for T24 GBS, defined as integrated, enterprise- wide, front-to-back office support of the operations of a mid- size bank. In fact, Honda Bank gave up, turning in 2013 to local supplier, COR&FJA (subsequently bought by Sopra). EIH Bank’s assets were frozen in 2011 as part of sanctions against Iran.


Financial Objects


Temenos bought long-standing core banking system provider, UK-based Financial Objects, and its IBM iSeries-based system, IBIS, in mid-2008, for £27.2 million. At the time of the deal, IBIS – once a strong competitor to two other IBM midrange-based offerings, Midas and Equation – was used by 40 or so banks, typically for their foreign branches. Financial Objects also had the much newer Activebank Retail, which only had a handful of users, a wealth management offering which had come via its acquisition of UK-based Wealth Management Systems in 2005, and energy trading and risk solutions, gained through an acquisition from Raft International in 2006. Chuard saw potential for ‘upselling and cross-selling’ into the Financial Objects customer base. He said at the outset that it was not possible to say whether there would be cross-selling in the opposite direction. It seemed the Actis takeover of the previous year had exceeded Temenos’ initial hopes and had become a blueprint for other such acquisitions. Temenos had been aggressively targeting the user bases


of the two other iSeries-based offerings, as was clear from a glance at the front page of its website, where it promised ‘Temenos T24 Model Bank is the simplest way to replace Misys Equation or Misys Midas’. By buying Financial Objects, it was able to come at this smaller user base from a different route. Temenos agreed to pay a premium of 90 per cent over the


closing price of 31.5 pence per Financial Objects share on the day of the offer, 2nd July 2008. Temenos’ shares rose eight per cent on the day of the announcement. It was then two and a half years on from the acquisition that the initial IBIS customers finally started to commit to T24. The first to sign was Monte dei Paschi di Siena (MPS), in December 2010, followed soon after by Bank Hapoalim International in the UK.


MPS was looking to move from a distributed set-up, with its offices in different locations mostly on separate versions of


532


IBIS, to a centralised installation of T24. ‘Because it needs to set the system up differently, rather than just map it straight across, the plan will probably take a year or so,’ said David Carruthers, ex-IBIS, who headed the former Financial Objects team within Temenos. There was an historical twist here as IBIS had been developed by a subsidiary of MPS, and the UK- based company set up to market it, IBIS, remained owned by MPS until it was sold to Financial Objects in 1996. Locations where IBIS came to be installed at MPS included Shanghai, Hong Kong, London, New York, Frankfurt, Singapore, Madrid and Guernsey. At this time, there were still 40 or so IBIS users, with only a couple having moved to other systems since the acquisition. In these cases, ‘they had been pressurised by their head offices for years to move off IBIS and onto group systems’, according to Carruthers. One other bank in London had closed. At least one bank, Alpha Bank in the UK, opted to buy the IBIS source code and to become self-sufficient. In early 2011, Cyprus- based Russian Commercial Bank (RCB), part of VTB, followed MPS and Bank Hapoalim in signing to move from IBIS to T24. However, a year or so later, Crown Agents in London opted for Sungard’s Ambit Core Banking to replace IBIS, preferring this to T24 at the shortlist stage. The bank’s director of operations, Carol Pattullo, was not convinced that the T24 route was the right one, with part of this linked to the commercial terms being proposed by Temenos.


Support for IBIS would cease in October 2013, according to Carruthers, and the objective was to persuade the rest of the IBIS users to move to T24. Temenos claimed to have created a model bank version of T24, designed to make it as easy as possible for IBIS users to switch. Building it was ‘quite a big project’, and involved a gap analysis between the two systems. The second stage was mapping data from the IBIS databases to the T24 databases, which Carruthers saw as


Universal Banking Systems Market Report | www.ibsintelligence.com


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