A look at the latest core banking success stories at this year's Temenos Client Forum in Bangkok.
Core banking solution provider Temenos held its annual client forum in Bangkok this year, but the Middle East was well-represented. Temenos counts Bank Muscat, National Bank of Fujairah and Al Salam Bank among its recent client wins, and there were plenty of existing users ready to discuss their successful implementations.
First Gulf Bank (FGB), one of the world's fastest growing banks in recent years, told the audience how Temenos has enabled its rapid expansion into new product lines.
P. Rambabu, senior vice president, IT, FGB, said: "We can't live with multiple systems, we wanted a comprehensive integrated platform."
It opted for T24, with the original 2002 implementation covering functions in corporate banking, retail and treasury. "It is flexible and customisable, has functionality for the bank's future plans, and a support structure," explained Rambabu. "It has been a cornerstone of our strategy. Quite a lot of this has been possible due to the flexibility we have in the core banking platform."
He added: "Significant customer pain areas have been eliminated."
It is still very early days as far as business process outsourcing is concerned.
FGB has received approval to begin Islamic banking services, which it will soon roll out with the aid of T24, and will also be moving into private banking. It is also putting a strong focus on its mobile banking system, and will shortly go live with T24 non-stop module.
T24's modular nature enabled FGB to work on new product lines in isolation, before adding them to the existing modules in the core banking package.
"Because it's modular we are able to focus on particular subjects," says Rambabu. "We were able to focus on the mortgage module without disturbing the rest of the business."
FGB is also working with Temenos on a data warehousing project, having realised that it needed to strengthen its reporting capabilities.
The bank's expansion plans do not stop there. "We're looking at multi-tier functionality very aggressively," says Rambabu. "We want to be number one in the UAE in the next two or three years, and a force to be reckoned with in the Middle East."
Bahrain's Al Salam Bank, although also expanding rapidly since it began operations 18 months ago, had a different story. The Islamic bank used Temenos' model Islamic bank solution - perhaps the closest thing to an ‘out-of-the-box' core banking system.
"We wanted to use something to get us up and running as quickly as possible," explains Abbas Malalla, head of IT, Al Salam Bank. "The competition is tough. Many new banks were being set up at the same time we were trying to operate, so we had a very short window to bring our products to market.
"We chose Temenos for its ability to give us an almost ready-made product, the model bank concept, with product functionality that matches our Islamic banking strategy." The vendor's international presence was also important, Malalla says.
Al Salam set itself a tight implementation deadline of six months for its core banking project.
"The product had two phases," says Malalla. "For phase one, basic functionality, which is retail and treasury operations, we did that quickly in two and a half months' time. Then we moved to the rest of the functionality: asset management, wealth management, and the sophisticated products related to securities and trade finance, etc. We did those in about three-and-a-half months. We went live just within the target we set for ourselves."
The bank had several priorities for the product: it should need as little configuration as possible, it should be strong in Islamic banking and private banking, and it should come from a provider with a global presence.
"We are using Temenos in every branch and subsidiary, in the Middle East and worldwide," says Malalla. l Salam currently has operations in Bahrain, Sudan and Algeria, but expects to open in other major international markets shortly.
Its expansion will also include growing its product lines.
"We consider ourselves a very innovative Islamic bank," says Malalla. "There are lots of products in the pipeline."
Al Salam will be something of a pioneer, since it will develop Temenos' Islamic treasury solution, with all of the improvements to be worked back into the product for a future release of the model bank package.
"We have gone into a strategic partnership with Temenos," says Malalla. "We will take their Islamic product and transform our Islamic treasury.
"We want to be the first bank that can really offer a real Islamic treasury product, and we also want to have innovative Islamic products on the market, launched quickly, as soon as we can.
"We will provide the brains and they will provide the technology."
The model bank solution is part of Temenos' strategy for the future, allowing banks to implement a ready-made platform with built-in best practices for universal banking, private banking and wholesale banking before adding on customisable elements suited to their region.
"With T24 we believe we have the most flexible banking application in the world," says Mark Cullinane, COO, Temenos. "The majority of banks are not going to differentiate the services they provide, so let's preconfigure the commoditised services they provide." This could cover anything from foreign exchange trading to routine savings transactions. Cullinane adds: "We are reducing complexity and risk for banks in implementing and replacing a core banking system.
"Since June 2006, 11 banks have taken it up and gone live. You have the ability to develop software around the core system. We provide the ability for clients to write code themselves."
Temenos is putting greater focus onto its core banking consulting services, which help can help streamline services and increase procedural efficiencies.
At one bank, taking a fresh look at procedures meant Temenos was able to reduce the loan application process by 77 minutes, from around 270 minutes.
"What is the cost benefit in implementing something that does what you did before?" asks Cullinane.
"The maximum benefit is when you change your processes."
He adds that one Middle East bank has already spoken to Temenos about looking again at the processes involved in its T24 implementation a few years ago to see if it can be made more efficient.
In fact, the Middle East has seen a growing number of core banking implementations, as banks overhaul their IT.
Andreas Andreades, CEO, Temenos, estimates that around 20% of core banking implementations in the Middle East are ‘greenfield'.
"Most projects are replacing something: either a ‘mature' - to put it politely - competitor's product, or an in-house system," he says.
"The Middle East as a market is booming and has been for quite a while. Our sales tripled in size in the Middle East over the past 24 months. We are in a position today to offer an Islamic model bank and can take an Islamic bank live in as little as two months."
He has also seen increasing demand for Islamic banking solutions in the region and beyond. "We have seen a lot of activity in the UAE," says Andreades. "Growth is coming from as far away as Pakistan, where we've conducted six new deals in the past 18 months. Altogether it's a key market. We've seen interest in Islamic banking in London as well."
The Temenos Client Forum in Bangkok certainly seemed to live up to its tagline "enabling growth".
With such rapid development of solutions to support Middle East banks, it remains to be seen what kind of technology will be available when the Temenos Client Forum comes around next year - this time in Rome.