As a supplier of banking technology, one of the trends that has affected our business model is the market shift toward a “pay as you go” type of service. In order to fulfill this expectation, we have adapted our IT operating model by incorporating Cloud technology to deliver our solution. While we continue to sell licenses to our clients with our traditional model, we have also adopted a SaaS model through our partnership with Microsoft Azure to facilitate consumption of our technology at a lower cost of ownership and, most importantly, with greater flexibility. We are now doing this successfully in various markets in collaboration with our partner Microsoft, and have begun to roll this out throughout the different global regions.
"Technology is the bridge between where an industry is, and where they will go."
Another trend that we are adapting to is the continuing need to enhance digital banking capabilities, including real-time interactions at any time day or night, and on any device, between financial institutions and their clients. With the increase in the activity and speed of these interactions, the industry is turning a great focus toward data analytics, which in turn becomes a leap that technology vendors need to make, and which Temenos has done by embedding those analytics within our Core Banking platform and making that data actionable with a 360 degree view of their account holders.
While I talk about these shifts from the perspective of the banking industry, these are trends that actually came to us from the outside. Vendors like Amazon, Netflix and Apple have raised the bar in pleasing consumers who have begun to expect an instant gratification approach from every business in their lives, including their financial institution.
An Industry in Transition
As fintech startups proliferate the market, financial institutions have found that their role is developing beyond their traditional structure as a safeguard. Sure they still offer deposits and withdrawals, and many offer person-to-person payments, but more than that, they are becoming what many fintechs cannot: “advisors” to their clients to help them achieve their financial objectives.
In response to this transition in our industry, our goal as a technology provider is to maximize the efficiency of the financial sector with our technology. This will help our customers to reach more clients and provide financial services to a greater portion of the population. At the same time, this efficiency will improve the way that financial intermediation is achieved, as the role of banks and other financial services providers continues to evolve.
The Human Side of Technology
The challenge for many technology vendors, including Temenos, is overcoming that human reluctance to change. In any industry, when faced with a seismic shift, those organizations must decide whether to dig in their heels and stand their ground, or to modify their stance and adapt to the new landscape. This is what banks and other financial services organizations are facing right now. Technology is the bridge between where an industry is, and where it will go – we all need a mindset for constant change and evolution as agile methodologies continue to develop. And technology vendors must engage with the human side of those decisions, and help their industry cross that bridge.
A Shift in Mindset
For the most part, the issue of cloud or a traditional model is not actually the main issue we face when speaking with prospective customers. Many of these organizations are running on decades-old legacy systems. Because of this, our conversations don’t just center around moving beyond the traditional model, but also how to transform the business from the inside out, as banks and other organizations look to move from the past to the future.
Skills Needed For Technology Leaders
Being better communicators is an absolute necessity for any technology company looking to lead their industry. The skill of connecting with your audience is vital in order to overcome that aversion to change so innately built into human nature. Further, by communicating not only the gap that you have seen, but how and why it should be filled, you will ensure that the technology you develop has the full impact on your industry.
Future Technology Innovation
Augmented Reality (AR) offers great potential to improve lives, both for consumers and those that serve them. Across industries, AR can potentially offer that human element that consumers crave, anytime, anywhere. Meanwhile it grants extended reach to organizations who utilize it, while also offering greater flexibility to their employees. You could be a teller with a green screen set up in a home office in Ohio, speaking to a customer trying to refinance their home in California, offering that personal experience and that instant access. And, just like Amazon, Netflix and Apple, that is going to set up a new expectation for every industry.
Key to Success
We now live in a highly competitive market where a few percentage points on margin will be the difference between success and failure. Efficiency and cost reduction while growing the business and appealing to that human element will be the key to success.