Temenos Ramps up AI Efforts to Power its Digital Banking Platform

Temenos, the banking software company, today announced during the Machine Learning Panel at Sibos that it is increasing the development of Artificial Intelligence capabilities throughout its digital banking platform. The Temenos AI initiative will enable banks to offer personalized services to customers, augment users’ decisions with data-driven machine intelligence, and maximise straight-through-processing (STP) rates for financial transactions at reduced cost with limited or no human intervention.

As part of this global initiative, Temenos has just launched a Centre of Excellence for Artificial Intelligence as its innovation engine. The Temenos AI Centre of Excellence will foster a collaborative ecosystem with Temenos’ banking clients and partners to help identify and validate use cases where AI could have an immediate impact on customer experience, as well as operational excellence, and hence improve the bottom line.

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Temenos’ pioneering initiative will involve injecting AI throughout its packaged, digital banking platform available on premise and in the cloud. Temenos is assisting banks to get ‘AI-ready’ by providing modern data architectures and integration tools that promote real-time data quality and governance, and allow high volumes of data to be consumed by AI and machine learning-based applications. Temenos has invested heavily in AI across its technology stack from AI-based fraud detection tools, to machine-learning and predictive analytics models. Temenos also launched the ‘Robo-Advisor’, as part of its WealthSuite, a packaged solution that helps financial institutions improve returns and enhance their customer experience through a fully automated or a hybrid digital advisory service.

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Prema Varadhan, Vice President of AI Centre of Excellence, Temenos, said: “Our drive for innovation is constant. We invest over 20% of our annual revenues in R&D, an amount that surpasses what a global Tier 1 bank would typically spend on its core banking systems, the bulk of which is usually spent on maintenance of legacy systems rather than innovation. Our vision is to build and fully embed own and third party AI capability throughout our banking platform to improve efficiency, automate processes, and crucially provide personalized customer engagements. AI is an integral part of our platform and an essential component in creating the intelligent bank of the future. We want to make AI capability accessible to all banks regardless of their type and size. Together with our customers and partners we aim to leverage our Centre of Excellence as an innovation engine that will enable banks harness the full potential of new technologies.”

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Temenos AI Centre of Excellence will initially focus on the following:

• Front office. Temenos will help banks embed AI to deliver compelling customer experiences, greater personalization and smoother on-boarding. This delivers cost savings and new revenue streams to banks. For example, Temenos Front Office Suite has numerous, integration, machine learning models, which mine transactional data to understand customer behaviors and patterns. The results of these models are integrated within the platform in order to provide customers with real-time product, service, or educational offers that enhance their financial lives.
• Payments Exemption Handling. Temenos will use AI technologies to identify any payments going into exception, monitor users’ manual corrections, and learn how to fix and automate these payments, thereby improving STP rates and lowering costs.
• Real-time fraud detection. Temenos is using AI to profile individual behaviours and detect fraud in real time. Banks need self-learning capabilities, beyond rules-based engines, to profile customer behaviour, using vast amounts of customer data and transactions to flag activities outside behavioural patterns that could be a potential fraud. Temenos is working towards using cloud computing to deliver new algorithms that help solve the real-time fraud detection challenge.

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In a recent report*, Jost Hoppermann, Vice President and Principal Analyst, Forrester, wrote: “The artificial intelligence (AI) space has quickly become a key tool for leading banks to improve customer experience (CX), increase process efficiency, and drive revenue. AI’s increasing maturity means that banks’ application development and delivery (AD&D) teams should consider off-the-shelf banking software powered by AI. When the dust settles, AI will be embedded as part of all products.” He went on to note that, “until recently, only larger banks were in a good position to gain these benefits because using AI required massive in-house skills or intensive help from a systems integrator. This is changing … AI will move from being something special to a core technology — and banks of all shapes and sizes will have AI-powered banking applications.”

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Temenos has been in the forefront of innovation and was the first to offer a core banking system with real-time 24/7 processing, the first to launch a core banking offering in the cloud in 2011, as well as the first to go to market in the cloud with a combined payments hub and core banking platform. Temenos was also first with its MarketPlace, an online digital store, which brings together over 150 financial software products from over 65 certified fintech partners that are fully pre-integrated into the Temenos software. Almost half of Temenos’ 5,000 employees are working in R&D.

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