Making banking better for billions with next-gen technology

The banking sector has come a long way since the global financial crisis. Faced with an existential moment, banks regained trust and have since used technology to improve many elements of their business. But fast-forward 13 years, and the industry is facing a challenging environment. Digital technology is evolving customer demands, competition is rising as “zen masters” of customer experience such as the GAFAs show an interest, and macro-economic conditions are persistently challenging.

As TransferWise co-founder Taavet Hinrikus wrote earlier this year that, after a traditional focus on “a captive audience and local networks”, some banks have found themselves out of step in an increasingly digitised global marketplace. Like almost every other industry, banking has had to pivot to respond to the Covid-19 pandemic and its impact on human life.

Banks that have embraced digital technologies have shown they can thrive in the digital era. Through cloud-native, AI and API-first technologies, banks have brought highly personalised, low-cost services fast that build into the wider fintech ecosystem – changing the way billions of consumers and small businesses around the world pay, borrow and invest.

For Carl Robertson, chief marketing officer at Temenos, an acceleration is now needed. “Banks have started the journey, but customer expectations are changing very fast. Consumers want what they get from companies like Apple, Netflix and Google – convenience and personalisation in real-time.”

“The future of banking is very exciting… to me, it’s about making the banking part invisible and focusing instead on the customer’s life journey. No one wakes up dreaming of a loan or mortgage, but they do dream of buying a car and a house. The bank needs to place itself at the centre of that experience.”

“Banks are starting from a good place. They are well capitalised and regulated. Plus, they have the customer relationships and trust, and with that comes a huge amount of data they can use to create better banking experiences.”

Better banking is within reach for both new and incumbent banks – but it will only be possible through digital banking technology. That’s why a community of 3,000 visionary banks across 150 countries are using Temenos’ technology to fundamentally transform their business.

Temenos unleashes the full power of the cloud, and the benefits of software-as-as-service (SaaS). This cost effective, scalable and resilient technology allows new banks to launch from scratch in record time – as fast as 90 days. It also gives traditional players the tools they need to revolutionise their offerings in order to make banking better for their customers.

With digital transformation achievable for banks of all shapes and sizes, a growing number of “changemakers” are emerging. These are the sector’s leaders, all of whom are seizing the opportunity to transform themselves and in turn shape the future of banking through the power of technology.

For Robertson, there are three key attributes that set these organisations apart from the competition. They use modern banking technology to pursue these attributes – marking them out as the true drivers of change who will make banking better.


These are:

1. Purpose-driven leadership

At the heart of every changemaker is the desire to make a positive impact in its customers’ lives.

Colin Walsh, chief executive of Varo, the first national mobile-only bank in the US, feels this is more important than ever in the current economic climate, which is presenting “a whole series of real structural problems for everyday people trying to make ends meet. Macro-economic trends have caused many people to feel very financially stressed and stretched,” he explains.

By partnering with Temenos, Varo, which launched in 2017, has been able to quickly develop and launch a range of products and bring them to market in record time. Crucially, it has offered innovative digital banking services to the 180 million Americans previously underserved by the traditional system.

Dutch bank ABN Amro has also shown real leadership – using advanced banking technology to accelerate innovation. Using Temenos technology, ABN Amro can rapidly create and launch new products for customers, with the ability to “code in the morning and deploy in the afternoon.” This has instilled a new culture around innovation – an evolutionary process the bank remains committed to. “We continue to innovate and bring changes to our systems on a continuous basis,” says Friso Westra, head of IT development at ABN Amro.


2. Customer obsession

For the most successful changemakers, everything they do starts and ends with its customers. That means their services are created in response to real world concerns, using machine learning and AI to tailor their offerings to individual customer needs.

Varo for example has introduced a feature where customers can access their paychecks up to two days early in addition to tracking their spending and cashflow.

Walsh at Varo notes that advanced digital technology results in “hyper-efficient cost structures.” The end purpose is to create savings that can be passed on to customers.

In the last year alone, Varo helped customers save $124 million through its No Fee Overdraft product.

Openbank is the largest digital bank in Europe. It has been using technology to challenge the status quo since it started as a telephone banking pioneer 25 years ago.

Temenos’ digital technology is helping Openbank to redefine a customer’s relationship with their bank – significantly enhancing client engagement either through advisers or via self-service digital execution.

The bank is working with Temenos to gain a much deeper understanding of its customers’ needs while bringing personalised products to market ten times faster than it would have previously been able to – and at a dramatically reduced cost.

“Everything we do, we put the customer at the heart of it,” says Openbank chief executive Ezequiel Szafir. “That’s something that’s new in banking and we’re very proud of it.”


3. Partners for change

Changemakers are visionaries, but they aren’t lone wolves. They understand that the future of banking is all about partnerships to create ecosystems of outstanding customer journeys.

In a recent global study by Temenos and the Economist Intelligence Unit, more than 80 per cent of respondents saw banking becoming a platform of services. And 45 per cent were committed to transforming their businesses into digital ecosystems – with the bank at the centre of the customer experience.

Temenos’ open API architecture allows visionary changemakers such as Varo to integrate their own digital products with third-party services into a rich ecosystem model. And through Temenos MarketPlace, changemakers are strengthening their customer journeys even further by partnering with an ecosystem of the world’s most innovative FinTechs.

This is a chance for banks to be a catalyst for change. In the global financial crisis, banks were the problem. This time, they are part of the solution. Changemakers are the banks that have shown us it’s possible. They are run by people who are courageous, who are driven and have the vision to go out and make their bank better and make society better. Banking is not just about powering the economy, it’s about helping individuals, businesses and communities to enjoy their lives and to thrive.

By partnering with Temenos, banks are harnessing the full power and generational opportunity of digital technology. They are making banking better for the billions of people who rely on these services every single day.


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