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Profiting from payments [Banker Middle East](Banker Middle East Via Acquire Media NewsEdge) Temenos is an established banking software provider, so why have you moved into the payments market? "When Temenos was founded in 1993, we set out with a simple mission: to aid the banks in getting rid of their legacy software. Ever since, Temenos has worked to make this mission a reality. We have invested more than $1 billion in developing great banking solutions. We have grown our product set from core banking to wealth management, business analytics, channels and financial mitigation solutions, offering a comprehensive solution set to meet the industry's needs. And now we have built upon this experience to create a new type of payments hub, Temenos Payment Suite (TPS). "However, this isn't the first payments solution for us. We already have an extensive range of bank clients who use our existing funds transfer module, our payments repair solution, STEP and our financial crime mitigation software; so when we agreed with a leading, international bank about collaborating to build a new payments solution, this transition into the payments hub market made perfect sense." TPS was designed in conjunction with a leading bank, doesn't this mean that it's been designed specifically in line with their needs? "Not at all. When our partner bank came to us with their requirement for a new type of payments hub it was because they couldn't find a solution within the market that was sufficiently agile to meet their evolving and future needs. "By designing a solution together with an end user it means that a full understanding of a banks needs has been addressed. All too often, software solutions are built based on limited research and feedback from the market and prospective clients provide feedback too late in the design stage. Because we are a partner bank, we're there from the outset and are so established, we were able to really listen to the everyday challenges that banks experience and build these into our system." There are many experienced payment companies servicing the market already. What makes Temenos (and TPS) any different? "We see our entry into an established market as an advantage to our clients. The economic crisis in 2008 changed the face of banking forever and banks are still struggling to recover. Payment services can play a crucial role in this recovery. We have a solution designed after the economic crisis that has been designed with the benefit of hindsight and technological experience, without any glitches or baggage from past versions. We have been able to create a solution for tomorrow's market, a truly modern solution for modern customers. TPS uses the latest technology and has been designed with an understanding of the need for a universal, agile solution that enables banks to profit from payments through value added services which they can quickly bring to market whilst easily address regulatory and risk management requirements." Payments processing is a necessity but historically doesn't generate any profit. Why are banks starting to look at updating their systems? "The payment industry has never seen so much Change oropportunity. Being able to adapt is not just about compliance any more, it's about survival. Banks are not only looking to refresh their technology to cope with regulatory forces and improve process efficiencies, but to support customer retention and access new opportunities." Why can't banks access these opportunities with their old systems? "We have recently seen a huge increase in issues with legacy bank systems; some resulting in costs of over $250 million and without moving off these systems, there is a real danger that these costs will continue. In fact, as a result of these issues the FSA are now undertaking a detailed review of the systems that banks are using. "Payments systems in particular have evolved over decades and often have a complex spaghetti network as a result of changes to allow clearing houses and new channels etc. to be added. Managing these is incredibly complex, time consuming and risky. In addition, elements are often run on outdated software that is particular to that individual system so specific (and expensive) programmers are required to manage them. Upgrading is not an option, as after all with this approach they would still be running on old architecture, and therefore a system which is often inefficient, inflexible and not equipped for today's' 24/7 multichannel banking. Sooner or later a new system will be required, so why spend time creating an instant legacy solution?" With ongoing regulations and customer demands changing continuously, won't the system be outdated by the time the implementation is finished? "Not if you have the right system. Because TPS is a condition and data driven solution, it enables real- time changes; the advantages of this approach are huge. Not only does it mean that a bank now has control to quickly and effectively react to changing market demand and competitor threats, but this also removes the complexity of these changes therefore reducing the need for complex inter-modular testing and other associated risks and costs. And this means that TPS can easily be molded to individual bank needs. In addition, this flexible approach means that it can operate with any payment type, format, source and channel as well as any core or back office system. In essence, this approach enables the payment system to grow and develop as the bank does." With the banking market evolving constantly, what do you see as being a focus within payments over the next few years? "In the future, I think that we are going to see a lot more focus on the customer. I think that banks are starting to realise that not only is there now an opportunity to profit from payments but that payment services can be used as an effective retention tool. After all, giving customers a rich, differentiated experience is key to achieving sustainable competitive advantage in the growing and highly competitive transaction banking market. As a result, I think we will start to see a wider variety of payment services for corporates such as deferral, prioritisation etc. as well as enhanced BI solutions enabling corporates to manage their liquidity better and, of course, real-time payment services. "Innovation in payments will continue to be key to avoiding disintermediation, considered to be fundamental to the long-term success of the payments market. But the industry needs to accelerate innovation. Just as non-banks are providing aggregation services or "wallets", so must banks, offering services of specialist partners as well as their own, and made relevant through location and transaction history. Innovation must lead to instant reward, where payments can be effected and confirmed immediately. Currently, the best route to this may come through Near Field Communications, but this is likely to involve biometrics and will increasingly occur through mobile devices. "In addition, improvement on standards is also a big opportunity for the industry. If the banking industry moves towards global standards, such as ISO20022, it would introduce much more flexibility, and also help the industry to move to real-time payments. This will have significant impact in heading off competition from non-banks, who have already adopted standard protocols." (c) 2014 CPI Financial. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |