Loraine Lawson
Good day and welcome to The Buzz, a Bank Automation News podcast. I’m Deputy Editor Loraine Lawson. In today’s episode, I sit down with Temenos Americas President Jacqueline White to discuss why so many banks are looking at modernizing their cores and what trends are driving technology at financial institutions. We started the discussion with a look at what’s been going on at Temenos since we spoke in April.Jacqueline White
So, you know, just to just to kind of contextualize myself, I know, we didn’t speak, I think maybe in February or March, but, you know I joined in January, so got about nine months, almost 10 months and three quarters under my belt, it’s been a fast and furious and very exciting time at Temenos headline and what we’re seeing.
We, you know, as the world is kind of stepping out of the pandemic, I will say, and, and, you know, maybe two steps forward one step back, and figuring out what the new normal looks like, we’re seeing a lot of movement and interest in banks across the spectrum, right, everything from large global, tier one logos, to the credit union space, where we have a very big presence with community banks, all the way to challenger banks and Neo banks. So we’re seeing a lot of activity in the market. I’ll say that that’s exciting. We’re seeing a lot of banks looking at their core right now. They are ready to continue and in some cases start modernizing their core. And, of course, Temenos, we believe that the best choice and the best platform and solution for them. So we’re involved in many, many procurements, which are very exciting. I would say that probably from, you know, news relative just to specifically answer your question, Lorraine, specifically, when it comes to new product launch launches. There are two specific areas that I think are exciting. Earlier, just a few months ago, we launched the Temenos banking Cloud, right, the TBC, the Temenos banking cloud. And that really is in response to what we’re seeing in the market. Right, it accelerates the SAS and AI adoption that banks are interested in right now. And, and it’s, you know, it builds on our 10 years of cloud leadership. And I’ll say that, you know, we’ve invested about a billion dollars in r&d investment. And the experience, right, the end user experience of about over 700, SAAS customers. So that’s one of the exciting announcements for us as the Temenos Banking Cloud. And then also, this isn’t as much of a product launch but building upon that, I’ll say that, you know, as I talk to customers every day, what I am hearing is top of mind, is this move to the cloud, right? What is their business look like? Do they want to retain it on prem? Do they want to move to a cloud? What does that cloud look like? What are their capabilities? What would the timeline be? What would it cost them?Loraine Lawson
Yeah, you mentioned a lot of banks are looking into core updates. Now. And I did want to ask you, what do you think is driving that? What functionalities are they hoping they’ll get by upgrading their course? Yeah, so.

Jacqueline White
So when we look at the landscape, ecology of core banking, and we’ll talk just about North America, U.S. and Canada, right, the technology is aging. And a lot of a lot of organizations are looking around and seeing that the only individuals who know how to code in their current system or know anything about the complexity and the customisations are retiring or leaving the organization. And so you know, you’ve heard us before, I think we talked about this back in February, you know, at Temenos we call it the legacy spaghetti, right? It’s it’s very complicated. It’s tangled up, it’s confusing. And so, banks are looking to, to modernize and to get to that point where they can have the advanced data analytics, right? They want to be able to test report and measure their product performance, they want to gain insights into business support decisions and product design. So, you know, so much of our world has evolved. And we’re so used to right not just our customers, but our employees. Inside the financial services institutions are used to having data at their fingertips. And that’s not always the case, right with with their legacy core systems. So they’re looking for everything that comes with modernization, right? They want a streamlined, frictionless system, to the degree that you can do that with something as complicated as a core. They want explainable AI they want, they really want to be able to mine their data, and better understand their customer base their users, so that they can refine the user experience and the front end, you know, digital experience, according to the various demographics of their user base.

Loraine Lawson
You mentioned banking as a service, which of course TIMA knows is really offering now with its cloud solution, terminal speaking cloud. And but for realization and open banking are the top three models terminos has seen coming to the forefront lit recently is wondering how these three will interact to change baking in the next year or so and how it affects the core companies.

Jacqueline White
And the three are temenos, banking, cloud and what else?

Loraine Lawson
But banking as a service platform zation and open banking?

Jacqueline White
Oh, yeah, I mean, it really it changes everything, right. And so many banks are finding that, you know, platform based business models give them a competitive edge, right. So when we talk about platform innovation, we’re seeing banks voluntarily partner with banking and non banking, third parties to really offer a wide range of products and services, you know, through the ecosystem, when it comes to banking as a service. You know, that’s where banks provide banking services to third party, they’re providing, you know, white labeled banking services to non banks, you know, everything from airlines, to retailers, to Neo banks, acquiring a bank charter. And, you know, banks are looking at ways to generate new new revenue streams. When it comes to open banking. You know, this is the, this is the wild, wild west, I guess, right. Everyone’s trying to figure out what does that actually going to mean? You know, President Biden just released an executive order that could potentially pave the way for regulation driven open banking in the US. But of course, the biggest obstacle is the lack of data protection and privacy frameworks. So, you know, all of this, it’s, it’s kind of a jumble, everything is up in the air, trying to figure out how does this Rubik’s cube of pieces and parts all fit together? And I think that it what it really represents is just tremendous opportunity for technology and platform providers, like Temenos. Also for the the banks themselves, and I think it’s gonna open just, you know, amazing innovation for customers, of which we are all customers as well.

Loraine Lawson
Yeah, it’s an exciting time to be a banker, for sure. You recently Temenos recently released their digital banking survey over 4000 banks, 4700, banks, consumers worldwide, sorry, banking consumers. What takeaways did you find?

Jacqueline White
Yeah, that’s, that was an interesting survey that we had. And really, you know, we, we, we talk about all of the technology and the platforms, and when people think about, you know, their digital experience, sometimes they think about algorithms, device screens, task automation, but a lot of times, you know, we can forget that. Although users want immediate functionality from their, their handheld device from their computer. They also want a high touch and a personal touch, right. And so we you know, we call that, you know, digital banking made human. So when we did that, that, that survey that you’re that you’re referencing, we found some interesting things. First of all, we found that four in 10 organizations that’s about 43% you know, a piece have individuals want an easier way to, to pay their bills and to send money? Right? That’s what that’s what we all do, right? We all do that we often pay bills regularly, we’re often sending money to, you know, to a college student or a parent or, and we want easy ways to do that. And so, you know, I think that opens up some interesting innovation. And I think it’s a race for organizations to figure out the fastest, most streamlined way to do that. We also found that about 29%, or one in three, want intelligence solutions to help them with their life goals? Right? They, they want help, understanding, you know, their budget and savings plans, you know, we have, we have a lot of younger users who they want to be ready to, to retire one day, right. And so and they recognize that they need that help. But you know, most importantly, I think what we got from that data with customers want to bank the way they live, they want support from everywhere. And, you know, anytime, anywhere banking, they want to be able to pay their bills, transfer their money, sometimes get a mortgage transfer from bank to bank, potentially, they want to do it while they’re standing in line at the grocery store or in line at the airport, or, you know, as riding in the car, whatever. And, you know, that is that is pushing organizations to, you know, beyond some of their current capabilities.

Loraine Lawson
And are there ways in which that will affect what port core providers like yourself offer? I mean, are you thinking through the survey results yourself?

Jacqueline White
Oh, absolutely. And I’ll share a success story with you, right, so Partners Federal Credit Union, they’re one of our accounts, one of our customers, and they have a disproportionate amount of millennials, right, that they serve us. And so they, their users expect a lot out of their mobile banking application. So since they launch our terminos solution, they’ve added 1800 new customers or new users each month, which has resulted in about a 20% increase in remote deposits. And that’s about a 64% increase in their mobile visa payments. They’ve also reduced their abandonment rate for so and for a for a credit union. That’s, that’s important and fairly, fairly amazing. So for us, you know, our, our digital front end product is infinity. We also have a journey manager and our LMS solution, which are products that we have a huge user base that they are being rolled into our infinity, our overall terminos infinity product. We also have a strategic partner with Salesforce that we’re rolling out later this year, which really gives a deeper dimension into, you know, everything from bank employees that are sitting in a branch to those who are sitting in call centers and opening accounts. So yes, we are, we are on our toes, and really on the forefront of leading the way around digital, you know, the demands that customers are insisting on in the digital banking space.

Loraine Lawson
course we’re post-, payroll protection, act, program, payroll protection programs for small businesses. So as businesses come to the end of the symbolist buns and frozen loan payments resume, what are the needs and what opportunities are there for banks to add value there, do you think? Yeah,

Jacqueline White
yeah. And then that really is the question right, how do we add value? So one thing that we’re seeing and I think this is so fascinating, is and I’m sure you’ve you’ve read a lot you’ve probably written a lot about buy now pay later the the BNPL you know, it’s dominating conversations, especially with the latest news of Apple announcing its version of buy now pay later with Goldman Sachs. You know, it’s it’s a it’s an innovative iteration of A brilliant age old concept, right? To help consumers bridge that gap in finances during challenging times, while also supporting the economy, and enabling merchants with alternative payment options, right? And, and that’s what banks do, right? They offer lending options. So I think it’s fascinating, right? I remember, you know, my grandmother kind of barely right, would, you know, go to the retail store and you, you, they called, they called it layaway, and you would pick out what you wanted. And then you went every week or every month, and you paid for it until it was yours. And you could pick it up. And I think what the paycheck Protection Program showed us is how difficult small to medium businesses have it right, they live on a Razor’s Edge of, of survival, little bit, sometimes hand to mouth, that became, you know, in sharp relief during the pandemic, and during their their challenges. And so I think it’s made banks more aware of that demographic and have the opportunity, right to create a revenue stream that supports that particular segment of the market. So buy now pay later, we see, you know, this, this, this is a big value for retailers and banks and consumers. So obviously, with the retailers, it creates loyalty and repeat customers, they’re, they’re purchasing larger ticket items that they normally couldn’t purchase, or that they don’t want to put onto a credit card that may have high interest rates. And then the value for the banks, who, potentially partnering with fintechs and merchants is that they’re offering a competitive edge. And, and, you know, top of wallet placement, right. And then, of course, for the consumers, it’s obvious, but but, you know, we’ll we’ll say it anyway, is that it gives them more flexibility to buy larger ticket items, such as, you know, furniture home off for a home office, or, you know, to, to continue with their with their purchasing needs. without, you know, in many cases, you know, interest free periods or without those high interest rates.

Loraine Lawson
Are there any other new automations? Or updates? What technologies are you watching? for the coming year?

Jacqueline White
We are watching what’s happening with crypto, and you know, watching go from something that used to potentially invoke, you know, little dismissiveness into potentially the mainstream and we’re keeping an eye on that. We also have a product called our virtual COO and that’s something that we’re rolling out in conjunction with CWB Canadian western bank, and something that we talked about at our user conference in May. And you’ll hear quite a bit more about it. starting in January throughout 2020 to

Loraine Lawson
fly January is there is that are you in pilot now or yes

Jacqueline White
We’re CW B is our beta customer. They are scheduled to go live in January. And again, we rolled it out and in May at our user conference, and will continue to showcase that throughout next year.

Loraine Lawson:
What is it? Exactly?

Jacqueline White:
It’s our virtual CIO. And have you heard of that at all?
Loraine Lawson:
No, I haven’t.

Jacqueline White:
Yeah, it’s AI driven, it provides intelligent thing. It’s really, you know, going back to some of what we talked about earlier, it helps subject matter experts understand cash flow. And you know, it’s all automated, right? So it’s taking that data from the core and helping to make it intelligent and useful within the bank, because you have this tremendous amount of data and detail on users, what their needs are, how they operate. But in the past, we haven’t, you know, banks or organizations haven’t really been able to pull that through and, and make that data useful. So it helps small businesses understand cash flow, so they can understand gaps and finance banks can support with with tailored lending options, you know, and it’s all about that AI driven data analytics.

Loraine Lawson
You’ve been listening to the Buzz, a Bank Automation News podcast. Thank you for your time and be sure to visit us at BankAutomationNews.com for more automation news. You can also follow us on Twitter and LinkedIn. Please don’t hesitate to rate this podcast on your podcast platform of choice.