Temenos Transact in Fintech

Temenos Transact which until recently was known as T24 is one of the most popular and established core banking solutions around the world. In recent years it has undergone quite a few changes and got some nice improvements. Now it is cloud native and cloud agnostic, there is also Temenos Banking Cloud offering as well as Temenos has pretty much simplified integrations with other systems thanks to APIs and micro services. So... does Fintech needs such banking solution that always was mostly targeted towards banks?

My answer would be: "it depends". I have been approached several times by different fintech startups with questions about Temenos Transact and if it would be suitable for them, what features it has and what could be time to production to get up and running and start serving customers. Honestly, initially I was a little sceptical if fintech actually needs full blown core banking solution as there are many different solutions on the market developed more with fintechs in mind. Temenos Transact is not cheap as well, though with Temenos Banking Cloud offering upfront costs can be reduced significantly as you will pay as you go.

So, why it depends? There is no solution that can satisfy every company even if they are doing basically the same. Time to production and ownership costs, vary a lot between solutions as well provided functionality and technologies used. For fintechs also level of different process automation within system, ease of building interfaces with external solutions and ability to enhance core functionality without vendor involvement can impact choice between solutions.

If we take particularly Temenos Transact, then, as I mentioned earlier, it has been modernised quite a bit, if we compare with older versions that were called T24. It is also now more targeted towards fintechs and challenger banks, not only "classical" banks and financial institutions, and you can buy only functionality you will be using (eg. accounts, payments and that's it, sure core will be also included as without it nothing will work). Big emphasis in latest versions has been put on APIs and, honestly, Temenos has done pretty good job here as you can expose basically everything via REST APIs (just think about security of your core and expose wisely, nevertheless you can build your own controls and APIs also have some built-in security that can be set up), send events to other systems via queues and build different micro services. Temenos Transact has always been quite flexible solution in terms of functionality enhancements without vendor involvement. It allows to build your screens, enquiries, reports, add fields to core applications, build your own "applications" or tables which now doesn't require programming skills, validations, actions on different events on the record and services. There are also so called "model banks" for many countries and regions which can reduce time to production significantly as basically model bank provides close to ready setup of the system. Sure, these models might not suite everyone even within same country, though building your own environment is much easier when you can tweak provided model. From my experience, minimum viable product you can get up and running in approximately 6 months with Temenos Transact and it is also more or less in line with Temenos own press releases and case studies.

Now about bad for fintechs... Temenos Transact is still full blown banking solution with functionality more targeted to "classical" banks. For payment institutions and electronic money institutions you will have to seek for workarounds around core functionality to satisfy regulatory requirements as there are some requirements which don't have banks and these are not supported by Temenos Transact right out of the box. Sure, different solutions to support specific regulatory requirements can be implemented thanks to system extensibility, but it will require some time and effort than just to tweak provided model. Total cost of ownership, even I suspect in SaaS model, will also be higher than, if you choose some solution that has been developed specifically for fintechs as these tend to cost less. Another thing that can be considered as drawback by fintechs is, there is quite a bit of legacy in Temenos Transact, although quite well hidden. 

All in all, there are both pros and cons, if we talk about choosing Temenos Transact as your core, but there will be pros and cons with any solution. If you are serious about your great idea how to make world better and provide better payments, financial services etc. and look for well established core as a foundation, then I would suggest to consider Temenos Transact among other solutions. If you cannot cope with a little bit of legacy and look for latest, coolest and hottest in terms of technology, this won't be core solution for you. Also, if you re tight on budget, most probably Temenos Transact won't be your choice as well.

PS. This might sound like paid article, but it is not such. I am not affiliated with Temenos in any way, with exception that already almost 14 years have been delivering requirements related to Temenos T24 / Transact as independent consultant and these are only my thoughts about this topic based on my experience.

PPS. There are also some BaaS offerings on the market as well, which have Temenos Transact as a foundation, so these might be worth checking out as well.