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Temenos Transact is a Core Banking System for New Banks

Temenos Transact takes advantage of cutting-edge technology to make standard banking services more accessible and more straightforward to use, allowing financial institutions to meet the evolving needs of their clientele better.

Customers today are pickier and less loyal than in the past, always looking for the next best deal from various vendors. Increasing customer loyalty and acquiring new customers with the help of Temenos Transact allows leading FIs to offer new solutions and services across sectors.

Top reasons for adopting Temenos Transact

Unsurprisingly, the top reason for adopting Temenos Transact as a core banking system is – the competition.

Companies that have recently entered the banking industry share a common trait: they are consumer-focused, technology-driven upstarts utilizing disruptive technologies to create compelling value propositions for their target markets, in addition to providing attractive solutions for challenger and neo banks, Temenos Transact supplies and leverage these technologies to help incumbent banks become more agile digital banking providers.

From retail and corporate banking and wealth management, customizing Temenos adoption is a matter of hands-on competence that comes from years of consulting with the top global FIs. Reaching game mastery accelerates the next in Digital Banking, something that partners like Maveric Systems understand intimately.

Two main reasons that add complexity to the mix are the need for continual releases and the changing market landscape.

New features are added to the solution every month, making them immediately available to financial institutions. These enhancements come from component-level upgrades installed in real time without disrupting ongoing customer services.

Profit margins have been under stress for the last decade due to the persistent downturn. Return on equity levels has yet to recoup their pre-2008 crisis peaks of >20%. New entrants’ cost models are dramatically different from established banks; their cost-to-income ratios average 30%, compared to the 50s for most European banks. Temenos Using Transact’s cutting-edge digital banking architecture offers higher process automation that provides better products and services at a lower price.

Important Caveat for Core Banking Systems: Not all use cases are identical.

While multiple Fintech start-ups consider if Temenos Transact is a good fit for them, vis-à-vis features, deployment times, and the resulting boost in CX, it makes sense to examine the market for alternative solutions. For one, the upfront costs for adopting Temenos can be reduced with the Temenos Banking Cloud service because of the pay-as-you-go pricing model.

Secondly, no one solution fits everyone’s use case. After all, specific variability is inevitable – production costs, ease of integration, the complexity of the underlying technology stack, and the degree to which the core banking solution automates front-middle-backend processes are all crucial for decision-making.

Classical Banks Vs. Fintech’s

Temenos Transact is a fully-featured banking solution. However, its features are geared more toward traditional banks. In some situations, payment institutions and electronic money services providers may need to seek workarounds for their core functionality. There is the fact that system extensibility in Temenos Transact allows various solutions to be implemented to meet multiple regulatory requirements, but doing so requires more work than simply modifying a pre-existing model.

The Final Word

If you are looking for a digital core banking services, look no further than Temenos Transact. Over 1000 banks in 150+ countries rely on Temenos Transact, which uses cloud-native and agnostic technology to provide the broadest and most sophisticated banking functionality spanning retail, corporate, treasury, wealth, and payments.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Optimizing the Temenos Transact (T24) Core Banking system to Maximize Performance

One of the most widely used digital core banking solutions – Temenos Transact – uses cloud-native and agnostic technology. It provides an extensive and powerful banking functionality across retail, corporate, treasury, wealth, and payments – in 1000 banks in 150+ countries.

Top Banks rely on T24 to bring innovative products and services to their customers. This becomes essential as customers are more discerning and digitally aware than ever. Across sectors, Temenos Transact empowers banks across industries to use capabilities and create attractive offerings, boosting customer loyalty and easing customer acquisitions. A significant benefit of T24 is customers’ assurance that regulatory compliance and critical market changes will automatically apply across their Temenos solutions.

Before we examine how best to optimize the T24’s performance, it is worthwhile to study core banking system challenges.

A Reliable IT architecture

Core banking systems work optimally when their underlying IT architecture is robust, reliable, and scalable. While legacy infrastructure has its unique challenges, it is a fact that banking operations are complex in themselves. Developing middle and front-end layers for such complex structures that are supposed to meet the ever-changing customer needs is an overwhelming proposition.

Regulatory Mandates and Corporate Compliance

Unlike other sectors, BFSI is a heavily regulated industry with risk and compliance as one of its central pillars. While exhaustive documents, knowledge, and teams manage the regulatory environment, it is a constantly changing ecosystem. Core banking systems must face many regulatory standards, cybersecurity protocols, and privacy laws.

Diversity in products and offerings

As Big Tech and FinTech increase their footprints in the banking sector, traditional banks focus on finding new profitability pockets and arresting existing margins. As the competition mounts, the expectations from core banking systems to enable new products and value propositions only increase. Incumbent banks stretch their core systems to deliver stiff banking operations and perform in tighter innovation cycles.

Optimizing the Temenos Transact (T24) Core Banking system

Temenos T24 is an end-to-end CRM and product lifecycle management platform that powers core banking operations. To leverage its full potential, a competent partner like Maveric is essential for extracting maximum value through full lifecycle implementations, L3 development, upgrades, integrations, testing, and support.

With Maveric, banking customers receive rapid and easy access to new modules such as Infinity, Transact, and TPH. The outcome is accelerated digital transformation journeys.

T24 Environment Configuration

Databases make the heart of a T24 environment. Therefore, initial DB tuning involves setup, configurations, and troubleshooting. For instance, computing the number of concurrent DB connections to your database, setting up the PGA spaces and open cursors, to cite a few. Additionally, DB-related tuning focuses on – Database block size, Redo logs, Cache, Retention, Buffer Flushing, and Indexes.

Table resizing and Reducing JOB.LIST.

As table spaces grow fast and delay the system’s performance, we must identify the file sizes and apply them manually or as part of routine maintenance. Additionally, reducing JOB.LIST / LOB size becomes essential. JOB.LIST tables are temporary files that are used to populate record keys. Shrinking the DB size without deleting the existing records is needed to reduce the unclaimed LOB size.

Overall performance optimization.

A vital optimization action is to monitor the number of concurrent sessions and configure the expected throughput limits. Furthermore, the CPU-related limits must be adhered to to ensure optimal throughput is maintained.

Conclusion.

From T24 implementations, upgrades, customizations, integrated support, Data migration, and QE services, the outcomes are decided by a singular fact: does the partner bring an encyclopedic Temenos proficiency for the bank’s digital transformation mandate?

About Maveric Systems

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Everything You Need To Know About Temenos Infinity

With the influx of eCommerce and popular entertainment sites, consumers today expect a similar responsive experience for their banking needs. FIs must ensure frictionless and omnichannel digital experiences that are intuitive and secure. It is not an easy ask.

Moreover, retail banks look to solve significant challenges through digital transformation and to create innovative products and value-added services that can accelerate business growth and boost customer retention. There is also the all-important matter of Customer experience.

For these reasons and collaborating within fintech ecosystems, Temenos Infinity Retail is the industry-leading solution with a complete portfolio of seamless, personalized, secure banking applications.

What is Temenos Infinity?

Temenos Infinity is a purpose-built, end-to-end digital banking solution designed specifically for retail banking. It offers the freedom to deliver retail banking experiences across channels – physical branch, web, native mobile apps, conversational banking, and wearables.

More specifically, the platform enables banks to:

Higher Agility It speeds up GTM mandates through any cloud platform that can elastically scale on demand. By leveraging advanced microservices and APIs, the platform simplifies connectivity to any core banking system and responds to fast changes while managing development time and costs.

Next-Gen Digital Experiences Not only are frictionless and personalized banking experiences created, but data analytics and AI capabilities offer actionable customer insights. The result is more meaningful customer engagement and loyalty through an Omni- channel strategy.

More than Banking In a world of open banking, integrating with third-party systems or leveraging pre-built integrations from the Temenos Marketplace is a significant advantage to learning and delivery of value-added services.

Temenos Infinity Scales Businesses

The solution uses APIs across multiple third-party cores based in the cloud or on-premises, independent of the core banking system. Not only is the solution scalable to allow for varying user volumes, but it also allows client separation via back-end systems. This accelerates agility and the GTM for FIs. Furthermore, Temenos Infinity’s API orchestration later communicates to user apps while seamlessly managing workflow rules, events decisioning, and reusability.

Bringing a business edge. Critical Benefits of Temenos Infinity

From lowering development costs because of its low-code environment to its ability to leverage modern microservices architecture to scale incrementally, Temenos Infinity is a versatile platform. Engaging customers at their place and time of choosing, the Temenos family of apps can create new experiences basis the multiple user journeys and touchpoints.

Commanding top-notch security at each layer, the system fully complies with industry regulations, entitlements, and role-based access controls.

Now FIs can leverage the power of data and learn across customer interactions by Identifying points of attrition, abandonment, and bottlenecks. The outcome is a radical improvement in business processes.

Finally, Temenos Infinity can integrate with best-in-class third-party solutions (including accessing the Temenos Marketplace)

Temenos was named a leader among Digital Banking Engagement Platform providers according to The Forrester Wave™: Digital Banking Engagement Platforms, Q3 2021.

In sum,

Temenos Infinity is the business transformation platform that enables FIs to accelerate their digital transformation initiatives and leverage front and middle office transactional capabilities. Banks are reimagining ways to up their CX game, whether physical or digital.

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4 Key Challenges of Integrating Banking with Temenos T24.

Business owners who fail to take advantage of available automatic, actionable insights risk losing out. After all, locating new sources of revenue, increasing profit margins, and streamlining operational costs are crucial to today’s economic climate.

More often, CXOs and CIOs seek Business-led, Technology-enabled perspectives that come from leveraging data and turning it into meaningful insights; so that the information ecosystem’s full potential can be harnessed.

In that regard, BI systems and methodology offer significant advantages.

This blog article elaborates on the best practices of using BI, especially when integrated with Temenos T24.

Benefits with BI

A well-orchestrated BI engine has multiple advantages to offer.

From increasing the ability to address and monitor regulatory compliance, measure, and influence customer profitability, identify new revenue streams and growth pockets, elevate specific elements in offerings (3Ps), and empower leaders to make proactive decisions.

But before BI engines and integrations can bring in the rewards, data is an important consideration.

Data can pose formidable challenges.

While data is everywhere, generating value depends on the organization’s approach (and tech investments) in transforming that data into actionable insights.

Compounding that challenge often can be that KPIs aren’t aligned with the organization’s strategic, tactical, and operational goals – which means teams are blind in understanding if their performances are in the right direction. There are more practical challenges.

For instance, while the organization’s data processes (accessing, unifying, cleaning) may be working, there could be situations where a single source of truth is absent. This erodes trust and obstructs a FI’s adoption ability of AI, ML, and other deep learning models.

The need to create a robust BI framework arises from the mentioned challenges, especially when integrated with Temenos T24, so that D&A gains may be actualized.

BI framework for FIs to maximize Temenos T24

How does one construct a robust BI framework?

Firstly, building a BI framework for Temenos involves a testbed that implements analytics across key banking processes using accelerators – such as data model blueprints for design and development, that includes industry KPIs grouped by function and business drivers, and finally integrates the semantic layer that yields unified information views.

Solution architects work through the T24 implementation stages, they must stay mindful of the inevitable challenges. (see infographic below)

Being mindful of the Four Key Challenges of Integrating Banking with Temenos T24.

Finding what works – choosing the proper application.

Optimizing data assets and capitalizing on untapped business intelligence means researching multiple options that identify not only the best software supplier but also someone who offers implementation support and is a domain expert to guide you on how best to extract positive outcomes.

From the many market options available, the search for the correct application begins by knowing your own goals. The hunt for the solution can be narrowed by evaluating various lenses such as – business strategy, security and access levels needed, and the level of integration required to create value for the customer.

Furthermore, matters of ease of use and scalability must be incorporated as part of the selection process.

Elevating Data Quality and Combating Data Silos

Identifying measurable results (the purpose of a world-class Banking BI system) depends on error-free data achieved through robust pre-cleansing processes.

A reason for mediocre data quality could also be a lack of understanding amongst users or the rush to complete projects without due diligence.

Additionally, a frustrating challenge one meets in BI implementation are the legacy-siloed mindsets. Breaking down silos and harmonizing data is done by setting expectations, finetuning governance mechanisms, and obtaining leadership consensus beforehand.

This ensures that be it financial or banking performance – the BI engines feed off a single source of truth. It is only then that Temenos T24 can create a pivotal shift in supplying performance reporting data and actionable insights for the future.

Data Culture, End-user Training

In addition, to the capital investment in hardware and BI software infrastructure, specialized skills to extract maximal value are gained through employee education and change management programs.

Not limited to the leadership ranks, an authentic data culture permeates when more BI conversations happen, data-centered decision-making increases, and best practices in adapting various BI use cases are celebrated organization-wide.

Integrating Temenos to upgrade a legacy setup starts to pay dividends when the mentioned initiatives are built both grounds up and are role modeled by the leaders.

Ultimately, the users’ enhanced proficiency and a data-driven decision-making culture allow the best use of Temenos T24 automated reports.

Amping up personalization, Focussing on Business Process Re-engineering.

Temenos T24 implementation streamlines and accelerates banking processes when appropriate organizational efforts are directed toward making it customizable.

Even in the highly regulated and orderly world of finance, no two institutions are identical. Different FIs require disparate data sets for efficient operation, depending on their strategy, market seasonality, and operational lifecycle.

Furthermore, integrating Temenos with advanced BI applications necessitates regular system scans to pinpoint overhauls and optimization areas. In the longer run, this is an effective practice for incumbent banks to seize opportunities favored by market insights.

Conclusion

In sum, the truth is that data must be in the correct structure, repository, and condition to serve the organization’s BI and AI mandates.

Once that is in place, the company-wide strategy for incorporating analytics for day-to-day decision-making comes next.

With specific expertise gained through Temenos T24 applications, the established ground rules help business users, IT, technology, and the data analytics community work harmoniously. After that achieving business goals by integrating tools into daily operations and decision-making happens seamlessly.

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Meeting the ISO20022 Mandate with Maveric’s Message Translation solution.

The tipping point is here. The question of ISO20022 migration has moved from “if” to “when.”
Come 2025; ISO 20022 will become a default standard for high-value payment systems for 80 percent of transaction volumes and 87 percent of transaction value globally.
Adopted in more than 70 countries, this messaging standard (MX) has replaced MT or domestic proprietary formats. For the payments industry, valued at $2T in 2020, streamlining and syncing global banking transactions assumes criticality that can no longer be ignored.

Given the crucial nature of ISO20022 – the ISO standard for electronic data interchange between FIs – this article starts with the adoption benefits, expands on challenges banks face, their breakthrough options, and Maveric’s translation solution, along with its tenets and architecture.

Benefits of ISO 20022:

ISO 20022 is a standardized global language for financial messaging covering trade, cards, payments, securities, and FX.
Moving from the legacy SWIFT MT to highly structured, data-rich, open standards (ISO 20022 or MX) helps banks and financial institutions with the following benefits.

Increased interoperability
Supporting non-Latin alphabets
XML-based approach that supports all payment types.
Harmonizing formats that could not previously work with one another to now provide a richer, faster, and more efficient end-to-end payments experience.
Ability to group messages based on data components from different payment methods enables more efficient management of:
- Nostro reconciliation
- Exception handling
- Reporting
- AML

What are the challenges that bank faces in implementing ISO 20022?

While the ISO20022 benefits are many, the complexities and interdependencies that the new standard introduces are formidable.

Prominent and legacy tech providers must map their pre-ISO 20022 systems by reframing the proper rules for AML, fraud, and compliance.
The exponential increase in data may require an infrastructure overhaul. ISO 20022 can multiply message lengths hundreds of times.
Replacement of Legacy Architecture. Legacy systems that cannot process modern, complex, and diverse message standards may have to be phased out.
Prohibitive time and costs. Upgrading a legacy system that handles new formats takes significant time and cost.
Inadequate Legacy middleware. Existing middleware can handle only legacy FIN messages.
Out-of-step Data Management. Banks must define new data models to handle ISO messages.

What implementation options do the banks have?

Big bang migration. This form of an upgrade is a considerable cost and effort exercise, not to speak of the timeline challenges.
Hybrid approach. This implies marrying migration and translation tasks as needed across different countries. While the localized system is purpose-built and quick to implement, the binary nature of the solution poses a maintainability challenge.
Translation approach. Especially suited for like-to-like migration cases with low-to-moderate business volumes, this approach comes with a no-build effort and quick implementation.

Maveric recommends the Translation approach which will enable the banks to quickly become compliant. The intent is also to build a platform which will support future payments implementation roadmap of the banks.

Maveric Message Translation Solution

Maveric has created a solution based on the Translation approach for the core banking systems to accelerate the next in industry standards. This empowers Financial Institutions to achieve ISO 20022 compliance swiftly for both international and domestic payment schemes.

The solution is differentiated in the following ways.

The entire implementation can be completed within 4 to 6 months depending on the number of payment types involved.
The advantages of cost, efforts, and faster time-to-market notwithstanding, the Translation method (translating MX messages to MT format and vice-versa) is the least-disruptive approach.
Banks can avoid a total overhaul, keep using internal legacy systems, and buy time for an informed next step, whether an MX implementation or an API implementation.
The Message Translation Solution provides a transformation platform to enable banks to meet ISO 20022 compliance with low code and minimal effort.

Trace Financial Transformer has been selected as the translator tool of choice for building this solution. This platform is not only meant for payments but can also act as the non-ESB middleware for the banks at the enterprise level.

Message Translation solution architecture

This solution introduces a spring boot based middleware platform which integrates core banking systems to payment gateways. The translation of messages are handled in the middleware layer, there is no impact to core banking systems.

Workflow [as referenced in the above schematic]

Payments platform produces MT messages.
Messages are first queued and then consumed by the Spring boot camel application
Camel route invokes Transformer jar.
Transformer logic transforms messages to MX and routes to the payments adaptor.
The transformer component handles reverse flow (MX to MT).

Fundamental tenets of the Message Translation Solution.

This solution covers all the below aspects:

Maveric’s critical offerings for Message Translation Solution:

End-to-end strategic solution and architecture for handling ISO 20022 messages, using Transformer product.
Implementation to store additional MX tags.
Readily available detailed gap analysis between FIN & MX messages.
Reconciliation of payment messages
DevOps implementation for Translation solution.
Automated test cases for payment messages validation

Why Trace Financial Transformer?

The Transformer tool comes from Trace financial, a market leader in financial message transformation and integration, supporting major global financial institutions, service providers, and application vendors across the globe.

Maveric has three primary reasons for choosing Transformer:

One for all! Transformers are replacing antiquated middleware systems that worked fine for the important messages of their day. With their pre-built messaging libraries and easy import of JSON and XML schema definitions, transformers today support any message type.
More power to the BAs and Developers! Even as message standards grow diverse and more complex, with their practical designer tools, Transformer solutions require no upfront programming experience to build and test rules.
Transformation logic is no longer locked at the Technical layer! Powerful message libraries contain rules for a messaging standard. This offers a high level of validation. Additionally, automatic format conversions allow for effortless field mapping.

For the banks, the benefits are quick and powerful.

In the ISO200022 Transformer approach, banks needn’t configure, create, or manage the frequent change that powerful message libraries offer.
After all, building or altering message libraries is not a straightforward exercise and requires the deep expertise that Transformer allows.

Bringing it Together

Today a ripple, tomorrow a wave.

The ISO 20022 impacts sanctions, fraud, AML, core banking, and other systems far beyond payment. As the de-facto industry standard sets in, banks will store and exchange payment information in a structured manner. So, more than seeing ISO20022 migration from a ‘compliance lens,’ financial institutions should use the ‘innovation lens’ to generate business value through data.

Conclusion

In the face of ISO 20022 deadlines, large institutions find themselves at a fork. On the one hand, the modernization approach has explicit promises, and on the other hand, the cumbersome implementation varies by payment market infrastructure.
Maveric’s translation approach makes for a compelling option for banks to navigate from standard compliance through to payment modernization.

Please reach out to Maveric to achieve ISO20022 compliance.

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