Financial institutions across the world have to keep up with continually evolving technology. Briony Richter speaks to Emily Steele, president of Temenos’s North America division, about the Canadian marketplace
Across Canada and the US, the market is witnessing a rapid shift towards digitisation. It is increasingly clear, therefore, that financial institutions cannot stay on legacy systems.
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Although legacy banking systems have been able to make transaction processing efficient, they are not fit for the pace of new digital technologies entering the market. To be digitally ready, banks and credit unions must revolutionise their back-office tech to deliver the most secure and up-to-date service that customers expect.
Temenos strategy
Speaking to EPI about what Temenos is up to in Canada, Emily Steele says: “We’ve broken the market into four categories: the big five, regional banks, credit unions, and other financial institutions such as digital-only banks or challengers.
“Our experience in the credit union space has been a complete core transformation. The credit unions are replacing everything front to back. They might not replace their digital at the same time, but our experience has been that they don’t just break off a line of business like deposits.
“Instead they will do deposits, lending, corporate retail and so on. They do more of a big transformation than we see in banks. The regionals do seem to be taking more of a progressive renovation approach, and certainly top of mind in all the categories is digitalisation,” she says.
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By GlobalDataTransforming a bank’s system to become digitised requires modernising its core processing. Financial institutions are faced with the choice of evolving from ‘front to back’ or ‘back to front’.
Going ‘back to front’ means upgrading the legacy core so that as the transformation takes place, it can support bringing customers the new digitised products and services that they desire.
Steele continues. “I don’t think anyone is mincing words that the time is now for improving the customer journey, and that is inclusive of a lot of people starting at the front of that journey. However, they are recognising that to get to true digitalisation requires modernisation of the core at some point in their transformation.”
Canada is seeing digital activity in all categories. With the big five, Steele notes that it’s more of a progressive renovation rather than a complete overhaul and replace – that method is seen more among the credit unions.
In 2016, Vancity, one of Canadas’ largest credit unions, went live with Temenos’s T24 core banking platform, which was integrated into Vancitys’ platform to enhance its ability to offer new and innovative services while speeding up the time to market.
Using T24, Vancity is able to broaden its products and services in quick response to market changes. The credit union is one of many under the wing of Temenos. With over 20 years’ experience in the financial industry, Steele has a wealth of experience behind her. Before taking on this new role, Steele was COO of Temenos in North America.
Asked about her targets in Canada, Steele states: “We are targeting in each of the categories. We have a strategy with the big five and we have captured the majority of the large credit unions. We are still working to get more, but we have the majority running a Temenos product today.
“If you think about our core banking real-time open technology, layer that with a front office, add payments, and then look at a wealth portfolio, we really fit well into each of those markets.”
Open Banking
As Open Banking sweeps through Europe, the question remains as to whether a similar regulation will hit the North American market.
Earlier in the year, the Canadian government reviewed the merits of introducing Open Banking in its 2018 Federal Budget, and Steele notes that there is definitely active chatter about the opportunities in Canada.
“Neither the US nor Canada have made any moves in that direction yet, but I would say, from a Canada perspective, that people are preparing for it more than the US.
“We are having very significant discussions with a couple of our customers in Canada who, even though that regulatory demand has not been placed on them, are preparing for it.”
The Temenos perspective is one of an open mindset. The company believes that for financial institutions to be fully digital, they have to be open – and Temenos can facilitate that transformation.
Speaking about her role and the market, it is also clear that Steele wants to see Temenos grasp all the opportunities available as the banking industry goes through this revolutionary transformation.
“I am extremely excited about the direction that the industry is going in. As technology providers, we have an opportunity to make a real difference.”
