Digital Banking with Temenos powered by open source

Temenos, Cognizant and Red Hat have joined together to provide a modern banking platform that provides composable capabilities from front to back so that banks can better compete in today’s world. The partnership streamlines the deployment of Temenos’s products and enables our joint banking customers to stay current with the latest innovations in the market. Specially for Banking an on-prem approach is often key for transformation, which we provide.

Technology in the focus

Temenos is a prominent provider of banking software solutions, catering to banks and financial institutions of all sizes worldwide. Their software facilitates core banking operations, digital banking experiences, regulatory compliance, and process optimization.

After Temenos achieved the top score in the software industry for the second year running in last year’s Dow Jones Sustainability Indices (DJSI), it is clear that there will be hardly any Digital Banking transformation without Temenos.

Temenos was the only company in the industry awarded top 1% distinction in the S&P Global Sustainability Yearbook for 2024. ¹

Challenges

Temenos comes along with a SaaS offering and the possibility to run on-prem. In this blog we will focus on the on-prem approach.

Temenos tackles technical challenges in integrating legacy systems, enhancing cybersecurity, ensuring regulatory compliance, and driving digital transformation. They support streamlining operations by integrating heritage systems with modern technology platforms and embedding cybersecurity features to protect against cyber threats. Temenos also addresses regulatory complexities by offering compliance tools and assists banks in adapting to digital trends with innovative digital banking solutions. Additionally, their capabilities in data management and analytics empower banks to unlock insights for strategic decision-making and improved customer experiences.

But Temenos cannot be seen as a single application but comes with quite some application landscape. And it isn’t always a low hanging fruit to integrate, configure and host them.

Open source as accelerator

To streamline the hosting, updating as well as installation process of Temenos a partnership of Red Hat and Temenos was formed to improve exactly these scenarios.

The idea is to leverage the benefits coming from the Open Source community by using Red Hat’s application platform OpenShift.

Support from the integration partner

To accelerate such transformation journeys it makes sense to join a triple-play and add a system integrator. Here as an example we have Cognizant on board. Cognizant is globally the No. 1 Temenos integrator and comes with tons of experience.

So, that was it to give you a rough idea about what this blog is about. Are you still interested in more? Then have a look at the following chapters where we explain everything that was said in more detail.
Also, Cognizant gives their view on what is the main value proposition with three concrete use cases, closing by a key takeaways section at the end.

You want to know more about Temenos? Then check the appendix section More Background Info around Temenos.

But before we start let us say some words about why we have partnered here with Cognizant.

Why Cognizant?

Cognizant has been a Strategic Alliance Partner of Temenos since 2009, making it the first and one of the largest partners and have won the Services Partner of the Year award in 2015, 2018, and 2019. They are also named as “Leader in providing Temenos IT Services” by Everest Peak Matrix 2022. ²

As a certified Temenos Partner for Infinity and FCM Implementations, Data Migration, and Upgrade services, they offer end-to-end SI services covering Consulting, Implementation, Customizations, Upgrades, Migration, Testing, Training, and Support.

Find more details in the Cognizant Company Profile.

After the setting-the-scene is done, let's get concrete, with our three use cases.

Background

One of the benefits of modern banking platforms is that they are increasingly built upon microservices. It offers flexibility to consume and update parts of the platform as needed. Below you can see the modularity of the Temenos offering.

This reference architecture is a broad view of all the components at different layers working together, from application to underlying infrastructure.  The details are not so important but it shows what this partnership is about, putting this to work for you.

We don’t expect you to understand the whole diagram here in detail, but it gives you a rough idea of how complex this can get.

But let’s take Temenos Quantum Fabric as an example. It is a middleware component which helps to connect the user interface with the backend application. Just have a look how many applications are running only in this layer.

Now let’s have a quick look at the most relevant applications for our case:

Temenos T24 Transact

This core banking module provides comprehensive functionality for retail, corporate, and universal banking operations, including account management, payments, lending, and treasury management.

Temenos Infinity

Temenos' digital banking module enables banks to deliver seamless omnichannel experiences to their customers through web, mobile, and API channels. It includes features such as account opening, self-service banking, personalized recommendations, and real-time payments.

Temenos Payments

This module offers end-to-end payment processing capabilities, supporting various payment types including SWIFT, SEPA, ACH, and real-time payments. It facilitates efficient payment orchestration, compliance, and fraud prevention.

Temenos WealthSuite

Designed for wealth management institutions, this module offers wealth management and private banking functionalities, including client relationship management, portfolio management, and investment advisory services.

There are banks where these applications were grown individually and there are others, they just started to think of a Digital Banking journey together with Temenos. So the question is, how the installation but also update mechanism can be streamlined. And this is exactly what we want to explain based on the three use-cases coming up.

Value Proposition

As said, we structured this chapter based on the three biggest relevant use-cases.

A) A customer decides for a Digital Banking journey with Temenos

Technical challenge

Legacy System Integration

Many banks and financial institutions have existing legacy systems that need to be integrated with Temenos solutions. This process can be complex and time-consuming, requiring careful planning and coordination to ensure a smooth transition without disrupting ongoing operations.

Data Migration

Transferring data from legacy systems to Temenos platforms while maintaining data integrity and consistency is a significant challenge. Data migration requires meticulous planning, data cleansing, and validation to ensure accuracy and completeness, often involving large volumes of sensitive customer information.

Customization and Configuration

Temenos solutions offer extensive customization options to meet the unique requirements of each financial institution. However, configuring and customizing the software to align with specific business processes and workflows can be challenging and may require specialized expertise.

Performance and Scalability

As banks grow and their customer base expands, they need scalable and high-performance systems to handle increasing transaction volumes and user traffic. Ensuring that Temenos solutions can scale effectively to meet evolving business needs while maintaining optimal performance is a key challenge during onboarding.

Solutioning

As described, onboarding to Temenos can result in being a cumbersome endeavor when done manually. The idea is to accelerate and stabilize the onboarding by leveraging the benefits of the OpenShift platform.

This can cut down the onboarding from super worse-case up to a year down to weeks.

Then main leavers are:

Containerization

OpenShift utilizes containerization technology, which encapsulates Temenos applications and their dependencies into lightweight, portable containers. This standardized packaging simplifies the deployment process and ensures consistency across different environments, making it easier to onboard new users to the Temenos platform.

Orchestration

OpenShift provides powerful orchestration capabilities through Kubernetes, which automates the deployment, scaling, and management of Temenos application containers. This automation reduces the complexity of managing infrastructure and allows for seamless scaling to meet changing demands, simplifying the onboarding process for both administrators and users.

Resource Optimization

OpenShift optimizes resource utilization by dynamically allocating resources based on application needs. This ensures efficient use of computing resources and improves performance, enhancing the overall user experience during onboarding and beyond.

Flexibility, Scalability and Availability

OpenShift offers flexibility and scalability, allowing organizations to easily adjust resources and scale their Temenos deployments as needed (see also the deployment model). This scalability enables organizations to accommodate growth and adapt to evolving business requirements without significant manual intervention, facilitating smoother onboarding processes for new users.

There are many more benefits when selecting Red Hat to onboard Temenos applications described in the Appendix chapter New Customer

B) A customer wants to get more efficient and runs a modernization program

Technical Challenge

Staying competitive is not optional, it is crucial.

Transforming banking operations is one of the key points to stay competitive in today’s dynamic and enhance customer experience.

But modernization means tackling running applications, creating code where it is not 100% sure how to test it and what effects it has. And huge integration risks.

I need to keep up my core business but at the same time find an agile and comfortable way for my developers to improve the status quo.

Solutioning

Temenos but also customers can leverage the automation capabilities from Red Hat’s container platform OpenShift for automation and scalability purposes.

Integrated Solutions

When combined with Red Hat's open-source technologies and infrastructure solutions, such as OpenShift for containerization and managing interfaces via the service layer and Ansible for automation, organizations can benefit from a tightly integrated and cohesive modernization strategy by increasing automation capabilities in general.

Scalability and Flexibility

Red Hat's OpenShift platform enables the scalability and flexibility required for modern banking systems. By containerizing Temenos applications, organizations can easily scale their infrastructure up or down based on demand, ensuring optimal performance and resource utilization while adapting to changing business needs. 

Security and Compliance

Security is paramount in the banking sector, and Red Hat offers robust security features and best practices to safeguard applications and data by leveraging many automation capabilities.

Combined with Temenos' focus on regulatory compliance, organizations can ensure that their modernized banking systems meet stringent security and compliance requirements, mitigating risks and maintaining trust with customers and regulators.

Agility and Innovation

Red Hat's open-source philosophy fosters innovation and agility by enabling rapid development and deployment of new features and services. With Temenos' continuous innovation in banking software and Red Hat's DevOps tools and practices, organizations can accelerate their time-to-market for new products and services, gaining a competitive edge in the market.

Cost Efficiency

By leveraging open-source technologies and containerization, organizations can reduce infrastructure costs and achieve greater efficiency in resource utilization. Additionally, the modular nature of Temenos and Red Hat solutions allows organizations to adopt a phased approach to modernization, minimizing disruption and maximizing return on investment.

Overall, modernization with Temenos and Red Hat offers a holistic approach to transforming banking systems, combining innovative software solutions with reliable infrastructure and security measures to meet the evolving needs of the financial industry.

Please find the full list of all benefits in the section Banking Modernization

C) A customer embarks on a Cloud journey

Technical Challenges

Many banking clients already have a public cloud journey in place. So it is rather not an “if” decision, rather an “how to do it”.

Applications have to be migrated. Others have to be modernized. New interfaces and connections have to be established. More potential thread scenarios are coming up.

And there in the middle would be your Temenos applications.

Affected by all the migration work, affected by applications being moved, using new interfaces.

Enough challenges which can be named than space in this blog available.

Solutioning

Upgrading your core banking on OpenShift can prepare your bank exactly for this move.

OpenShift - the hybrid cloud enabler

OpenShift is an hybrid cloud platform that can run on prem as well as on the cloud. This means again streamlined operations.

OpenShift can be your bridge to the cloud, while the core stays in your premises, you can leverage the cloud when a failure happens, or when you want to change provider, you need scaling for a certain period of time and so on.

Once you are on OpenShift, if you plan to go fully into the cloud it will be easier as the platform will stay the same.

Unified Approach

Temenos and Red Hat offer a cohesive, integrated approach to cloud adoption. Temenos provides banking-specific software solutions tailored to the cloud environment, while Red Hat offers cloud-native technologies and infrastructure solutions, such as OpenShift and Ansible, designed to streamline cloud deployments. This unified approach ensures compatibility and interoperability between Temenos and Red Hat offerings, simplifying the cloud journey.

Overall, partnering with Temenos and Red Hat on a cloud journey enables organizations to leverage banking-specific software solutions, cloud-native technologies, automation, security, and compliance expertise to achieve greater efficiency, scalability, flexibility, and cost savings in their cloud adoption efforts.

Find the full list of all benefits here Cloud Readiness

Let us try to wrap up the most important things in the final chapter.

Key takeaways

At the end let us - the Red Hat team - take the opportunity and shout out a big thanks to Cognizant for the lively collaboration on this blog. It was a pleasure to work with you and leverage your experience as the biggest Temenos integrator worldwide.

Let us try to summarize the blog with the biggest aspects we see:

1. Temenos became an important player in the Digital Banking business and will increase its footprint in the future
2. The step to enhance Temenos with Red Hat’s Open Source power is a match winner because of
   a)    Being able to leverage Red Hat’s market leading container platform 
           OpenShift and improving aspects like reliability, time to market
   b)    Leveraging Red Hat’s Ansible Automation Platform to accelerate
           onboarding in a tremendous fashing.
3. Red Hat helps to increase security aspects from infrastructure to application development; bottom to the top.

Sources:
1. How Fintech Giant Temenos Became an ESG Leader | FinTech Magazine
2.Temenos_Customer_Forum 2023_PDF_Brochure_Cover.pdf (cognizant.com)