EFG and BSI unite on Temenos’ T24 core banking tech

Swiss private bank EFG International has competed the migration of all former BSI business onto its technology platform, Temenos’ T24.

The BSI business was moved from Avaloq Banking Suite, supplied on a hosted basis by Temenos’ rival Avaloq.

EFG bought BSI from Brazil’s troubled Grupo BTG Pactual for CHF 1.33 billion ($1.38 billion) in spring 2016. In its turn, BTG Pactual took a stake in EFG of around 20%.

The combined bank manages around CHF 170 billion ($176.6 billion) in revenue-generating assets.

EFG is a long-standing user of Temenos’ T24 core banking system. It was actually one of its very first takers. EFG’s former COO and currently member of the board, Ian Cookson, is Temenos’ non-executive and independent director.

According to a joint presentation by EFG and BSI in May 2016, the IT and operations platform integration and migration project will run until Q4 2018 and cost CHF 80 million ($83 million).

At the time of the takeover, BSI’s annual spend on IT and operations stood at CHF 160 million ($166 million), whilst EFG’s spend was CHF 80 million ($83 million). So BSI’s expenditure in this area was twice as much for a similar number of employees and assets under management (AUM).

Softbank is rumoured to be looking to form a digital payments system that could potentially rival PayPal.

City sources in London told the Sunday Times that the bank will head a consortium backed by some of the world’s largest banks.

As is often the case with these kinds of stories, details are thinner than a catwalk model but Softbank has shown plenty of interest in forging ahead in fintech.

A recent example includes paytech firm Dynamics, which teamed up with Sprint, a subsidiary of Softbank, to launch the Wallet Card, a battery-powered, connected payment card.

Moving on, and this is all speculation of course, Softbank is also rumoured to have been eyeing up core banking software vendor Temenos. The latter doesn’t have a fully-fledged payments system (although it has been developing one for some time now – Temenos Payments System – with varying degree of success) but such a deal would see the bank delve deeper into the fintech space. Shares in Temenos rose 20% amid these reports, which have been denied.

Elsewhere today (29 January), Deepcore, a wholly-owned subsidiary of Softbank, announced the launch of its artificial intelligence (AI)-focused incubation business for students, researchers and entrepreneurs in Japan.

The idea is for Deepcore to develop young entrepreneurs in the AI field, especially in the deep learning arena, and support start-ups.

As a first step, Deepcore has entered a joint research agreement with Matsuo Lab of The University of Tokyo, to promote joint projects with companies.

Eblein Frangie, Finabank (left) and Enrique O’Reilly, Temenos (right)

Finabank in Suriname has signed for a front-to-back office suite of tech from Temenos to drive its “multi-lingual [Dutch and English], multi-currency expansion” across the country.

Finabank operates in the retail, commercial and private banking space and has three branches. It is currently the country’s fourth largest commercial bank, but its ambition is “to become the number one provider of financial solutions in Suriname”.

Temenos’ T24 core banking system, Temenos Connect digital banking platform as well as business intelligence (BI) and financial crime mitigation tools will “help propel Finabank’s efforts”, the vendor says.

The implementation project is scheduled for 18-24 months and will be carried out with the input from Sofgen, a Swiss consultancy firm and system integrator and Temenos partner. Sofgen also assisted Finabank with the selection.

According to Eblein Frangie, CEO of Finabank, during the selection process Temenos demonstrated “a clear understanding” of the bank’s business objectives and how to achieve them.

“With the flexibility of the new platform, we will be able to respond to market needs and create new value-added products and services as we grow,” Frangie states. “Our customers will gain a modern front-end experience, with greater accessibility across channels, while receiving the value that comes from a secure, streamlined technology foundation on the back-end.”

New core banking tech deal for Temenos in Myanmar

Myanmar Citizens Bank (MCB) has signed for Temenos’ T24 core banking system, FinTech Futures understands.

The implementation partner is Techmill Technologies, an India-based system integrator and Temenos partner.

It is understood the MCB will also implement the vendor’s front-end software for digital channels, Temenos Connect.

Temenos already has a number of takers of its flagship T24 platform in the country, namely Co-operative Bank (CB Bank), Myanmar Oriental Bank and Fullerton Financial.

Fun with flags

Banco Postal, Angola’s ethical bank, has implemented Fiorano Software’s platform “to tackle integration challenges in its digital transformation journey”, according to the vendor.

Banco Postal runs two core banking systems, TagPay and Temenos’ T24. The bank opted for Fiorano “for its native integration with T24”, the vendor explains.

The bank also needed to integrate with Angola’s national payment subsystem, Empresa Interbancária de Serviços (EMIS), from scratch, including the mobile application to enable mobile and utility bill payment services for the customers.

“Banco Postal is built on a strong commitment for financial inclusion in Angola. Having such an innovative approach to banking, the technical challenges were one of the biggest constraints to the success of such implementation,” says Marcelo Barreto, head of IT, Banco Postal. “Fiorano enabled us to swiftly tackle these restrictions.”

He also compliments Fiorano’s “collaborative environment and deep commitment”, which enabled the bank to deliver the required integrations in under two months.

CHDB signs for Temenos

Construction and Housing Development Bank (CHDB) in Myanmar is replacing its legacy core banking system with Temenos’ T24.

The bank will implement the R17 version of the system.

The new platform will support retail banking operations at CHDB as well as internet and mobile channels.

The implementation will be carried out by an India-based system integrator and Temenos’ partner, Techmill Technologies.

Recently, Techmill and Temenos scored another new customer in Myanmar – Myanmar Citizens Bank (MCB).

Validata gains new client in Africa

Validata has gained a new taker in Africa for its quality assurance software. This is understood to be Stanbic Bank in Kenya.

Stanbic Bank is upgrading its core banking system, Temenos’ T24.

The bank issued a request for proposal (RFP) earlier this year looking for an automation test solution to improve the quality of its testing processes.

According to Validata, the RFP process included an “exhaustive” proof of concept, where the tech vendor “successfully met all of the bank’s requirements”, beating other contenders, including HPE and IBM, to the deal.

Validata states it was selected “for its ability to add value throughout the automated lifecycle process, from requirements management to testing, defect management, release automation and reporting”.

Vaios Vaitsis, CEO and founder of Validata, is confident his company’s DevTestOps solutions for Temenos substantially reduce production defects compared to other solutions, as well as reduce testing times and the deployment of software corrections by half and with fewer resources.

Banking software vendor Temenos enjoyed a decent 2017 with a total software licensing growth of 22%, retaining the momentum gained in 2016.

If you had forgotten, back in 2016 it revealed a total software licensing growth of 21% and earnings growth of 20%.

In its latest flurry of stats, Temenos says tier 1 and 2 banks contributed 59% of its total software licensing in FY 2017, and it had 65 new customer wins.

Temenos CEO David Arnott says: “We won deals with Openbank, Itau, KBC and a US tier 1 bank among others [State Street, as FinTech Futures reported exclusively], which speaks to our global relevance and the strength of our value proposition.”

The firm had a total revenue growth of 15%, and grew profit by 17%. Total revenue for the year came to $736.7 million – with software licensing coming in at $316.1 million.

Temenos CFO and COO Max Chuard says for 2018 it is guiding for non-IFRS total software licensing growth of 13.5% to 18.5% and non-IFRS total revenue growth of between 10% and 13%.

He adds that is guiding for 2017 non-IFRS EBIT of $255 million to $260 million, which implies a margin of over 31%. For FY 2017, non-IFRS earnings per share (EPS) was $2.45, an increase of 18%.

Belgium-based banking group KBC is undergoing a major technology modernisation enterprise wide, with Temenos as the main tech supplier.

Temenos is already supplying its flagship T24 core banking system to KBC in Ireland and says the two parties have built “a good relationship”.

The banking group is on a “progressive renovation” journey of its international operations and is working with Temenos to roll out the new core banking platform across multiple geographies.

KBC core markets

As part of its group strategy, KBC will set up an open architecture IT package as core banking system for its international markets unit. It will also create a common competency centre, BE@T.

There will be one centrally managed infrastructure and all countries will gradually migrate to the agreed target architecture. However, dedicated programmes will be run by the country managers.

All T24 modules will be upgraded at least every three years – the bank will apply the “stay together” (enabling sharing) and “stay current” (latest developments) approach.

There will be no internal T24 development or customisations of the core system’s modules, unless agreed by the bank’s design board.

Also, KBC says it aims to improve the applications it offers its clients – a one-stop-shop offering – via co-creation/partnerships with fintechs and other value chain players.

Temenos has agreed to buy trading platform provider Fidessa – which could see it valued at £1.4 billion.

On 20 February there was a “possible offer” being discussed. Today (21 February), Temenos says the boards of Temenos and Fidessa have reached an agreement on the terms of a recommended all cash acquisition.

Fidessa shareholders will be entitled to receive £35.67 in cash for each Fidessa share.

Temenos says its enlarged group is expected to have (on a pro forma basis), for the year ended 31 December 2017, revenues in excess of $1.2 billion and an EBITDA margin of 32.3%.

The Temenos board says it expects the transaction to generate approximately $60 million per annum of run-rate pre-tax cost synergies, which are expected to be fully achieved within three years post completion. The EBITDA margin for the enlarged group is expected to increase from 32% to 37% pro forma for the run-rate cost synergies.

Andreas Andreades, the executive chairman of Temenos, says the deal will “accelerate both companies complementary growth strategies in banking and capital markets and will enable us to cross-sell into our existing client bases and capture a greater share of the IT and software spend of banks especially as they move to the cloud”.

Andreades adds: “The capital markets industry is undergoing structural changes that will require it to renew its software systems. However, the current vendor landscape is fragmented and dominated by legacy technology. This creates a huge opportunity to combine the complementary product strengths of Fidessa and Temenos in the front and back office.”

On 19 February, Fidessa released its financial results for the year ended 31 December 2017 – and its revenues rose by 7% to £353.9 million.

As reported on 15 February, Temenos also had some good financial results. It enjoyed a decent 2017 with a total software licensing growth of 22%, retaining the momentum gained in 2016.

If you had forgotten, back in 2016 it revealed a total software licensing growth of 21% and earnings growth of 20%.

In its latest flurry of stats, Temenos says tier 1 and 2 banks contributed 59% of its total software licensing in FY 2017, and it had 65 new customer wins.

And if you had forgotten another matter, as reported last month, SoftBank was rumoured to be acquiring Temenos, but this was denied.

This story was previously published on 20 February 2018 with the headline “Temenos mulls £1.4bn Fidessa acquisition”. It has been updated to reflect that the acquisition has been confirmed.

Catch up on FinTech Futures’ top five fintech stories of the week – all in one place!

Temenos buys trading platform provider Fidessa for £1.4bn
The two parties have reached an agreement on the terms of an all cash acquisition.

Nxchange pioneers ABN Amro’s blockchain tech for escrow accounts
ABN Amro Clearing Bank (AACB) has developed a blockchain-based alternative for escrow accounts.

Sound practices: fintech implications for banks and supervisors
BCBS identifies ten key implications and related considerations for the industry.

Russia’s beta biometrics brings better banking security
Tinkoff Bank, VTB Bank and Pochta Bank have presented a beta version of their unified biometrics system.

Insurtech Homelyfe opens up tech stack for third party fun
“Partner Platform” offers access to its product lines and to provide home insurance cover.

The latest issue of the Banking Technology magazine is out now, full of fintech goodness! Click here to read the free digital edition.

Temenos gains new live site in Lebanon

A new bank in Lebanon – Saradar Bank – formed as a result of a merger of Banque de l’Industrie et du Travail (BIT) and Near East Commercial Bank (NECB), has gone live with Temenos’ T24 core banking system.

Saradar Bank offers private, commercial and retail banking services.

Prior to the merger, BIT was a long-standing user of the SAB AT system from another core banking software provider, SAB.

Meanwhile, NECB signed for T24 in 2015. It also took Temenos Connect for digital banking channels and Insight BI for business intelligence and analytics.

BIT and NECB united in mid-2016 as Saradar Bank.

T24 has replaced the new bank’s “multi-system environment with a single, centralised core banking system”, Temenos says.

There was a “big bang” go-live, the vendor adds, “for instant and synchronised impact”. The project was led by Temenos and supported by its regional system integrator and partner, BankerWay.

Banking Technology March 2018

Fintech with flourish. Nourish your brain.

The latest edition of our flagship magazine – Banking Technology – is out now, packed with news, analysis and insights, case studies, research and expert commentary.

A note from our editor-in-chief, Tanya Andreasyan:

We are still early days into the year, but it has already brought us a number of high-profile takeovers in the financial services tech space across the globe.

In the US, mobile banking app developer Digiliti Money was acquired by another fintech vendor, Urban FT. No surprises here – Digiliti ran into major financial and organisational difficulties last year and has been in conversations with Urban FT about the sale for a while.

In the UK, risk management and regtech vendor Lombard Risk got taken over by Vermeg. Vermeg, which specialises in securities processing and fund administration tech, has valued Lombard Risk at £52 million.

Visa bought its long-standing partner Fraedom, a paytech firm that focuses on the corporate sector and originates from New Zealand. Visa did not disclose how much money it parted with. Fraedom’s tech underlies Visa’s IntelliLink Spend Management, a core platform for its commercial and SME clients.

Openlink Financial, a provider of trading and risk management tech, has been acquired by ION Investment Group. Is ION aiming for a clean sweep of the treasury management software market? It already owns most of the key providers in this space (the two exceptions at present on the international scene are Calypso and Murex). I guess we’ll never know – ION is notoriously reclusive when it comes to communication.

And, of course, there is an interesting move by Temenos to diversify its portfolio by buying trading platform developer Fidessa. The two parties have reached an agreement for an all-cash deal, valuing Fidessa at £1.4 billion. One may also recall the recent rumours of Temenos itself being an acquisition target, with Japan’s SoftBank named as an interested party. This, however, was denied by the core banking system vendor.

So, who’s next?

And not to forget the Regulars of course:

News – the good, the bad and the ugly.
Appointments – the movers and the shakers.
Industry events – mark your calendars!
Out of office – curiosities, frustrations and mishaps of the fintech world.

The March 2018 edition of Banking Technology features:

Spotlight: artificial intelligence
Virtual agent answers Credit Suisse’s call for tech support.

Payments commentary
Australia’s New Payments Platform – it’s alive!

Analysis: open banking
A comprehensive guide and practical suggestions.

Point of view: mission to Mars
Allow the momentousness to mean something (without going into space).

Comment: what’s a financial institution?
Industry alignment or industry confusion…

Interview: Caren Robb, Letshego
Creating inclusive banking for remote communities.

Analysis: banks and social media
Empathy is future proof, apps aren’t.

Challenger bank spotlight
Fiinu – putting people before profit.

Silkbank in Pakistan has completed an upgrade of its core banking system, Temenos’ T24.

The bank, which has been using the system for nearly a decade, is now running on R16.

The project was carried out by National Data Consultants (NDC), together with the Silkbank and Temenos teams. NDC is a regional partner of Temenos and a T24 system integrator.

Silkbank, NDC and Temenos teams. Image source: LinkedIn

NDC’s other customers include State Bank of Pakistan, Meezan Bank in Pakistan, Al Khaliji in the UAE, Sahara Bank in Libya and Export Development Bank in Sudan.

Temenos gains new core banking tech client in Egypt

Banque du Caire, a state-owned bank in Egypt with 2.7 million clients, is replacing its legacy tech with a suite of front-to-back solutions from Temenos.

The bank will implement the vendor’s flagship core banking system, T24; Temenos Connect for digital banking (front-office); and tools for financial crime mitigation, payments, risk and compliance.

On the way out is Oracle FSS’s Flexcube core banking system, which the bank has been using for many years, FinTech Futures understands.

The new software will support Banque de Caire’s retail and corporate banking operations.

“Banque du Caire has seen continued growth, and we are projected to grow 10% year-over-year,” says Khaled Hamada, the bank’s CIO. “Our existing platform was not flexible enough to scale and respond to our growing customer base and their needs.

“Temenos’ technology provides us with an agile solution, which can scale to size, and offers pre-configured features and enhanced product agility.”

Temenos already has a number of long-standing customers in Egypt, including Commercial Bank of Egypt and Suez Canal Bank. Among newer T24 takers are Arab African International Bank (a 2015 deal) and Housing and Development Bank (a 2014 deal).

CHDB signs for Temenos

Construction and Housing Development Bank (CHDB) in Myanmar is replacing its legacy core banking system with Temenos’ T24.

The bank will implement the R17 version of the system.

The new platform will support retail banking operations at CHDB as well as internet and mobile channels.

The implementation will be carried out by an India-based system integrator and Temenos’ partner, Techmill Technologies.

Recently, Techmill and Temenos scored another new customer in Myanmar – Myanmar Citizens Bank (MCB).

Validata gains new client in Africa

Validata has gained a new taker in Africa for its quality assurance software. This is understood to be Stanbic Bank in Kenya.

Stanbic Bank is upgrading its core banking system, Temenos’ T24.

The bank issued a request for proposal (RFP) earlier this year looking for an automation test solution to improve the quality of its testing processes.

According to Validata, the RFP process included an “exhaustive” proof of concept, where the tech vendor “successfully met all of the bank’s requirements”, beating other contenders, including HPE and IBM, to the deal.

Validata states it was selected “for its ability to add value throughout the automated lifecycle process, from requirements management to testing, defect management, release automation and reporting”.

Vaios Vaitsis, CEO and founder of Validata, is confident his company’s DevTestOps solutions for Temenos substantially reduce production defects compared to other solutions, as well as reduce testing times and the deployment of software corrections by half and with fewer resources.

Banking software vendor Temenos enjoyed a decent 2017 with a total software licensing growth of 22%, retaining the momentum gained in 2016.

If you had forgotten, back in 2016 it revealed a total software licensing growth of 21% and earnings growth of 20%.

In its latest flurry of stats, Temenos says tier 1 and 2 banks contributed 59% of its total software licensing in FY 2017, and it had 65 new customer wins.

Temenos CEO David Arnott says: “We won deals with Openbank, Itau, KBC and a US tier 1 bank among others [State Street, as FinTech Futures reported exclusively], which speaks to our global relevance and the strength of our value proposition.”

The firm had a total revenue growth of 15%, and grew profit by 17%. Total revenue for the year came to $736.7 million – with software licensing coming in at $316.1 million.

Temenos CFO and COO Max Chuard says for 2018 it is guiding for non-IFRS total software licensing growth of 13.5% to 18.5% and non-IFRS total revenue growth of between 10% and 13%.

He adds that is guiding for 2017 non-IFRS EBIT of $255 million to $260 million, which implies a margin of over 31%. For FY 2017, non-IFRS earnings per share (EPS) was $2.45, an increase of 18%.

Belgium-based banking group KBC is undergoing a major technology modernisation enterprise wide, with Temenos as the main tech supplier.

Temenos is already supplying its flagship T24 core banking system to KBC in Ireland and says the two parties have built “a good relationship”.

The banking group is on a “progressive renovation” journey of its international operations and is working with Temenos to roll out the new core banking platform across multiple geographies.

KBC core markets

As part of its group strategy, KBC will set up an open architecture IT package as core banking system for its international markets unit. It will also create a common competency centre, BE@T.

There will be one centrally managed infrastructure and all countries will gradually migrate to the agreed target architecture. However, dedicated programmes will be run by the country managers.

All T24 modules will be upgraded at least every three years – the bank will apply the “stay together” (enabling sharing) and “stay current” (latest developments) approach.

There will be no internal T24 development or customisations of the core system’s modules, unless agreed by the bank’s design board.

Also, KBC says it aims to improve the applications it offers its clients – a one-stop-shop offering – via co-creation/partnerships with fintechs and other value chain players.

Temenos has agreed to buy trading platform provider Fidessa – which could see it valued at £1.4 billion.

On 20 February there was a “possible offer” being discussed. Today (21 February), Temenos says the boards of Temenos and Fidessa have reached an agreement on the terms of a recommended all cash acquisition.

Fidessa shareholders will be entitled to receive £35.67 in cash for each Fidessa share.

Temenos says its enlarged group is expected to have (on a pro forma basis), for the year ended 31 December 2017, revenues in excess of $1.2 billion and an EBITDA margin of 32.3%.

The Temenos board says it expects the transaction to generate approximately $60 million per annum of run-rate pre-tax cost synergies, which are expected to be fully achieved within three years post completion. The EBITDA margin for the enlarged group is expected to increase from 32% to 37% pro forma for the run-rate cost synergies.

Andreas Andreades, the executive chairman of Temenos, says the deal will “accelerate both companies complementary growth strategies in banking and capital markets and will enable us to cross-sell into our existing client bases and capture a greater share of the IT and software spend of banks especially as they move to the cloud”.

Andreades adds: “The capital markets industry is undergoing structural changes that will require it to renew its software systems. However, the current vendor landscape is fragmented and dominated by legacy technology. This creates a huge opportunity to combine the complementary product strengths of Fidessa and Temenos in the front and back office.”

On 19 February, Fidessa released its financial results for the year ended 31 December 2017 – and its revenues rose by 7% to £353.9 million.

As reported on 15 February, Temenos also had some good financial results. It enjoyed a decent 2017 with a total software licensing growth of 22%, retaining the momentum gained in 2016.

If you had forgotten, back in 2016 it revealed a total software licensing growth of 21% and earnings growth of 20%.

In its latest flurry of stats, Temenos says tier 1 and 2 banks contributed 59% of its total software licensing in FY 2017, and it had 65 new customer wins.

And if you had forgotten another matter, as reported last month, SoftBank was rumoured to be acquiring Temenos, but this was denied.

This story was previously published on 20 February 2018 with the headline “Temenos mulls £1.4bn Fidessa acquisition”. It has been updated to reflect that the acquisition has been confirmed.