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Temenos T24 & CORE BANKING – Where is it going and how do I get there first?

April 28, 2017

Future of Core Banking T24 Temenos

By: Othon Vroulakis & Luca Ziprani

Core Banking- what is it?

As described by Antony Peyton, senior reporter at IBS Intelligence, “Core banking is the essential services the bank offers” which includes:

  • Taking deposits & lending money
  • Managing financial transactions
  • Keeping details of accounts and account holders
  • Linking all accounts and account holders via a database
  • Maintaining its own accounts i.e. fixed & variable Costs
  • Routine maintenance i.e. Opening & Closing accounts, Interest calculations etc…

Where does Temenos and their star product T24 come in?  

Temenos is the market leading provider of banking software systems to retail, corporate, universal, private, Islamic and microfinance & community banks. T24 is a widely used core banking system and provides a technically advanced, SOA-based front-to-back platform for banks in over 120 countries, from small community banks to large retail banks with over 15 million accounts”- IBMWiki

The company has recently received the title of:

  • A ‘Global Power Seller’ for new business deals for 11 consecutive years, with 71 new deals in 2016
  • A ‘Top Global Player’ for 5 consecutive years , signing 173 deals with new and existing customers

– Temenos.com

So why does Emmanuel Daniel want to “kill Core Banking”?

Emmanuel Daniel, chairman of Asian Banker, at the recent Huawei Connect Summit in Shanghai stated he wanted to “Kill Core Banking as we know it”… how come?

Daniel believes that the future of Core Banking rests in Digitisations; most modern banks claim they are 80% digitised. However, more often than not, this is not the case. Digitisation has changed its definition since the early 21st century, having an online presence and a contactless card is just not enough in 2017.

Emmanuel claims that most Core Banking services are still carried out manually be it “the routine due diligence to the customer, the fulfilment process or the securitisation process.”

What is the Future? Transparency & decentralisation…

The 2008 financial crisis was a blessing in disguise (a very very good disguise) for FinTech; banks had to deal with the new fines, blocks & regulations imposed by governments to “punish” those responsible and ensure that the same mistakes were not repeated.

A whole new school of thinking was necessary to surpass the crisis – Hence Bitcoin and Blockchain.

The idea behind Bitcoin was that people no longer trusted financial institutions after the Crisis, thus an anonymous person or group of people called “Satoshi Nakamoto”created a cryptocurrency and electronic payment system that was decentralised. – Alex Tapscott – CEO and founder of Northwest Passage Ventures

Being decentralised the obvious question was how can it be safe & who do we trust with our money?

This is where the Blockchain system came in – A distributed or “Shared ledger” that multiple parties are using which allows parties to collaborate without having to trust each other. Each process or “block” must be authenticated and validated by over 50% of the other parties or “miners” before it is accepted and added to the Blockchain. In essence every process is audited making it more transparent, fast and cheap than traditional methods.

These two new innovations lead to the Digitisation of banks – Making mortgages & loans more transparent via the Blockchain system i.e. customer can see and access the entire supply chain and order of transaction behind their loans, mortgages & investments.

Henri Arslaian, the FinTech Revolutionist, believes that this is only the beginning.

According to Citi Bank 30% of banking jobs will disappear by 2020 due to Digitisation. Intermediaries such as Correspondent Banks & Governments that perform “business logics” (currency exchange, inflation, International money transfers etc.) are becoming obsolete as they are costly, slow and exclude a large amount of the population (2-2.5 bill. people have no access to a physical bank).

However, decentralised systems are not user friendly and they require a centralised service or platform e.g. the internet needs Google & Hotmail. Similarly, “Blockchain is going to be the infrastructure in the background” and centralised services will be built on top of it. – Henri Arslaian

Modernising your Core Banking systems is no small featOthon Vroulakis can provide immediate assistance by supplying experts with the latest T24 skills. If you are staffing your projects and need expert recruitment in the T24 space please reach out to Othon atSKILLFINDER INTERNATIONAL +44 (0)203 763 9514.

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