Temenos Transact (formerly T24)

Type: Core Banking System

Review Date: 4 September 2024

Overview

In this review, we will explore the various facets of Temenos Transact, including its key features, technology stack providing a comprehensive analysis of its benefits and areas to consider.

Temenos Transact, the core banking solution from Temenos, has solidified its position as one of the leaders in the banking software industry, consistently recognized in the Gartner Magic Quadrant for its excellence. Designed to meet the comprehensive needs of financial institutions, Temenos Transact offers an extensive range of functionalities, covering everything from retail and corporate banking to wealth management and treasury operations.

One of the standout features of Temenos Transact is its ecosystem, which includes numerous third-party and own products and integrations. This ecosystem not only enhances the core functionalities of the system but also allows for extensive customization and scalability, ensuring that financial institutions can adapt and evolve their operations to meet changing market demands and regulatory requirements.

Key Features, Benefits, Considerations

Modular License

Banks can select and combine modules related to retail banking, corporate banking, wealth management, and treasury operations to create a bespoke system. The system can easily scale up as the organization grows, supporting increased transaction volumes and expanding service offerings.

The comprehensive list of available modules can be overwhelming. It is advisable to seek guidance from experts in Temenos Transact to select only the necessary modules. This can help significantly reduce the overall system cost.

Security and Compliance

Temenos Transact incorporates advanced security protocols to protect sensitive data and ensure regulatory compliance.

The system is designed to comply with a wide range of global and local regulatory requirements, providing regular updates to maintain compliance.

For local compliance specifics, it is essential to verify with Temenos whether they are supported.

Business Logic

Temenos Transact includes a wide array of functionalities essential for modern banking operations, ensuring seamless integration between modules. The system leverages automation to streamline processes, reduce manual intervention, and enhance operational efficiency.

Financial institutions using a multi vendor application architecture may find it inconvenient and risky to concentrate all business logic in a single solution due to concerns about significant vendor lock-in.

Country-Specific Extensions

Temenos Transact supports various country-specific model banks tailored to installations in regions such as China, Islamic Banking, Canada, India, and more.

While most model banks cover operational processes, they often do not include regulatory reporting. It is advisable to check with Temenos regarding this matter.

Flexible Customization

Banks can tailor workflows to align with their specific operational processes, improving efficiency and service delivery. The system supports integration with numerous third-party applications and services, enabling banks to extend functionality and maintain a cohesive technology ecosystem.

While flexible customizations of Temenos Transact offer many advantages, we recommend hiring and developing on-premise resources to maintain the system and continuously develop new features. It significantly reduces the cost of ownership.

Multi-Tenancy

Temenos Transact supports multi company setup under one instance helping to minimize the cost of infrastructure and reporting development.

Multi-tenancy installation makes the implementation project more complicated. Careful planning is key to success.

Technology and Architecture

Cloud Agnostic

The solution is designed to be cloud-agnostic, supporting deployment on major cloud platforms such as AWS, Microsoft Azure, Google Cloud, and others.

Database Support

Temenos Transact supports major database vendors, including industry favorites like PostgreSQL, ensuring compatibility with existing IT environments.

Container Orchestration

The solution supports container orchestration, making it easy to deploy and manage applications in both on-premises and cloud environments.

Software as a Service (SaaS) Offering

The SaaS option offers a flexible and scalable solution but it can be expensive for smaller institutions or newcomers to the industry. Costs can vary based on the system setup, storage requirements, and additional features needed.

Temenos Application Framework Java (TAFJ)

This framework supports development and customization using Java, managed by RedHat OpenJDK11 and Wildfly, offering flexibility and scalability.

Rest API

The use of a large number of APIs enables easy integration with third-party applications and services, supporting an extensive ecosystem.

Elastic Scalability

Banks can scale their operations seamlessly, adjusting resources as needed to handle increased transaction volumes or new service offerings.

Other Challenges

Functional GAPs

Despite its strong capabilities, Temenos Transact has gaps in several areas that might be required by financial institutions, such as robust CRM system, reconciliation capabilities, Banking as a Service (BaaS) functionality, and crypto features. We recommend seeking advice from experts in Temenos products for more details.

System Upgrade

Upgrading Temenos Transact to a newer version can be challenging and requires significant effort and resources from both the financial institution and the partner side. However, this challenge can be mitigated by minimizing the number of system customizations or opting for the SaaS service.

Expertise and Skilled Resources Demand

A high level of expertise and skilled resources are necessary to manage and maintain the system effectively over time.

The Temenos community has many experts who can be hired to implement a "train the trainer" approach, ensuring that knowledge is effectively disseminated within your organization.

Implementation

According to our experience and feedback from Temenos partners, the implementation process for an on-premises installation takes at least 4 months.

However, this timeline is subjective and can significantly vary based on multiple factors, including:

complexity and scope of the project,
quality and availability of resources,
level of stakeholder involvement,
client’s competencies and project discipline.

Software as a Service (SaaS)

While SaaS can be a significant advantage, it can also be expensive. Careful negotiation is essential to manage costs and avoid unexpected expenses.

Conclusion

Temenos Transact stands out as a comprehensive core banking solution, well-suited for financial institutions aiming to modernize and streamline their operations. Its modular architecture, advanced technology stack, and flexible customization options provide significant advantages, allowing banks to tailor the system to their specific needs and scale as they grow. The system’s cloud-agnostic design, support for major cloud platforms, and extensive security features further enhance its appeal.

However, while Temenos Transact offers a wide range of functionalities, it does have some gaps that need to be addressed through third-party integrations. These gaps highlight the importance of a strategic approach to implementation and integration to fully leverage the system's capabilities.

The implementation process, guided by the Temenos Implementation Methodology (TIM), is structured and thorough but can be lengthy and resource-intensive. Financial institutions must be prepared for a significant investment in terms of time, expertise, and finances. The cost of implementation and ongoing maintenance, particularly for newcomers or smaller institutions, can be substantial. Therefore, careful planning, phased implementation, and expert guidance are crucial to managing costs effectively.

Disclaimer:

The views and opinions expressed in this article are those of the author and is based on publicly available data and the author's personal experience. This article has been prepared for general information purposes only and you should not rely on its contents.