‘Our ultimate goal is to be number one in the U.S.market’: Behind Temenos’ new push in the US with Jacqueline White, president of the Americas
- Jacqueline White joined Temenos as president of the Americas at the beginning of 2021.
- She joins the podcast to talk about what she's seeing in the market and her plans for growing the software firm's footprint in the U.S.
Banking software firm Temenos continues to invest and commit to the US market. The firm recently hired Jacqueline White to lead the charge in the Americas. Jacqueline has a strong background in financial services and joins me on the podcast today to talk about her mandate in leading Temenos and the firm’s relationships in the US market.
We also talk a lot about digital banks and the applicability of SaaS models for financial institutions. Jacqueline discusses the impact deposit growth will have on profitability for the industry.
The new normal
I think all of us — everybody in the industry, at every level, across the spectrum of organizations — would agree that last year’s unexpected pandemic really accelerated the the digital journey that most organizations are on, regardless of size and mission.
And what I’m seeing from the customers that I talk to every day is just take a step back and say, okay, what are we currently offering to our customers? How is that now impacted? How are we going to continue our digital journey, whatever that was, and wherever they might have been on the spectrum of that journey? What is the new normal going to look like? What is that going to mean for the services that we offer our customers?
There’s clearly been massive economic upheaval. Banking is very personal, right? It’s our money. It’s our homes. It’s our financial lifeline. And so how do you go from what can become a very impersonal experience and interaction to keeping that personal touch, that high touch, with customers at all stages and interactions? Everybody’s been shifting to digital and the pandemic has just made that more urgent.
We’re finding that customers want a service that’s convenient, seamless, and personalized. Think about what we want as individuals, right? We want the friction taken out of our interaction with our financial institution. And that’s really what we do at Temenos. That’s our vision. It’s our strategy. It’s what we plan to do in the Americas: Canada, the U.S. and Latin America — to really make banking better together. Our ultimate goal is to be number one in the US market. And we’re going to do that by making banking simpler on both sides of the equation and really modernizing legacy cores, so that banks can focus on being more efficient, secure, and resilient.
Temenos’ global focus
Temenos has been around for almost 30 years. We are 100% focused on banking software. We’re not trying to to be many things to many people — we want to be the very best banking software provider. I think we’re well on our way to proving that. We have about 3000 banks worldwide and 1300 of those are in the US. And of our almost 8000 employees, we have about 800 in the in the Americas with 700 of those in the US.
Over a billion people (about 1.2 billion people or 30% of the global banking population on a daily basis) use us. I think that’s just amazing. So for me, given this moment in time, Temenos really felt like the right company, the right market, the right products — all those things that are coming together at this unique moment in time.
Varo, challenger banks, and financial inclusion
Challenger banks are here to stay. They’re not going away. We’re proud that we have over 60 challenger banks as customers. I’m proud of Varo Bank. They made history last year in 2020 by becoming the first fintech to gain a national banking charter. And they are a key strategic partner for us. The shift to digital is a once in a generation opportunity for growth. And they’re disrupting the market.
There’s no doubt about it: Will there always be a place for traditional brick and mortar banks? Of course, there will be. But challenger banks, in many instances, serve the underprivileged. Inclusive banks are those that are focused on financial inclusion. They want to deliver financial services at affordable costs to disadvantaged and low income sections of society. And that’s important to us. It’s one of our key and core values, as well. And I think that makes us better as a society.
When we think about financial inclusion, a lot of times we’re thinking of emerging economies or emerging countries, but there’s a huge need for this in the US as well. I think 6.5% of households in the US are unbanked and about 16% are underbanked. That’s a huge challenge. With all the financial upheaval that the last year has created and with all the economic challenges, we collectively have a responsibility to make sure that every individual in the US and in Canada has the ability to have banking services, right access to their money, and a safe way to deposit, invest, and transact with their money.
Incumbents launching digital brands
My gut feeling is absolutely that we’re headed in the direction of incumbent banks creating more digital brands. Many of us read just at the beginning of the year that Walmart is going to be launching a financial arm. I think it’s irresistible: one, because of the need, and two, because of the opportunity and potential. So yes, I think that we will see that.
It’s almost like an incubator move. I think there are lots of different strategies. We see a lot of the big banking organizations modernizing pieces of their core. Organizations are finding their way through to figure out what is right for them at this moment in time, and how to get where they need to go as quickly as possible on their digital journey.
I think what’s important is that these institutions are going to have to achieve rapid cycles of product iteration. And they’re going to have to have technology products that solve real problems for customers. That’s really what we’re focused on at Temenos — delivering that rapid cycle of product iteration.
We are agnostic. We support some of the largest big name brands like HSBC, Citibank, PayPal, Commerce Bank, Ally. We also are the number one pick for challenger banks and digital front ends like Grasshopper and EQ Bank.
Big tech moving into banking
We can service all these new non traditional banking entities — Walmart along with Square and others — because at the end of the day, behind the scenes and under the hood, banks all need the same things. It all goes back to the core backbone of the technology that’s required. We’re technology agnostic, so our software is cloud native, cloud agnostic, multi cloud resilient, and delivered as a SaaS or on prem. We’ve got the product and it can be overlaid or embedded in an organization, regardless of size or scale.
What’s next for deposit growth
The ebb and flow of deposits prior to the pandemic saw deposits grow by — I think it was 4% in 2019. And that was the lowest growth rate since the recession of 2010. But what we’re now seeing is that loan demand is high, leading to a potential imbalance in liquidity levels. And so in the first six months of 2020, since Corona struck, there’s been a record $2 trillion surge in cash deposit accounts in US banking, according to the FDIC data.
So there’s a tsunami of money that’s flowing into banks. And it has no precedent, right. There’s no precedent for that in history. The main reason for the growth was because of COVID-19, which suppressed spending due to issues like high unemployment and social restrictions and concerns about long term growth in a volatile stock market. Now, we have this abundance of deposits, but banks are wary of lending in a recession, and are having trouble growing high yield products.
Our customers are succeeding despite these wild swings of the pendulum. Varo became the first fintech to launch as a bank. Atlantic Union Bank has gained customers for life because its support of PPP lending. By partnering with Temenos and leveraging our Infinity delivered as a Software as a Service, we enabled them to roll out a digital loan application for PPP in just four days.
Core software delivered as SaaS
SaaS is a key and core component of our strategy for this year. We will always deliver on premise. There will always be a place for that. There will always be organizations that want to keep it in house on prem, that’s fine. But we are seeing in the US, I won’t say exclusively, but a huge and high demand for some some sort of Software as a Service hosting in the cloud.
I think that really goes to the digital transformation that that the industry is going through, that banks of all sizes are going through. We are never going to tie ourselves to one platform or vendor and we’ll keep finding the best solution for any bank, freeing up time for them really to focus on their core competency.
Biggest priorities in the new role of president
Our number one priority is that Temenos will be known as the customer facing, client focused, banking software provider. There’s nothing more important to us. We are building out and developing a customer experience organization, so that it’s not just about when issues happen, as they do at times with software. It’s not just about logging support tickets and resolving those, but we want to be true partners with our customers. And we want to make sure that they have a one on one experience, just like the banks are offering to their customers. So that when there are challenges, we have a very personal touch to escalate and manage the issue resolution cycle and process.
But in good times, we’re thinking and talking about innovation. Where do they want to go? Where are they trying to get to? And how do we use technology as an enabler to get to those business drivers? So we want to be seen absolutely as very customer focused. We want our customers to be the happiest customers in the industry and feel like they have a true innovation partner with Temenos. That’s number one.
We are very established global company. I think we have a little bit of a branding and perception challenge to overcome in the US. That’s another one of our big initiatives and strategies: to make sure that everyone understands that through our products, no other solution can do what Transact can do. And we’re in a position to drive monumental and transformative formational change, helping banks to build a better, stronger sector. We do that because our functionality is adaptable and scalable.
We have an omni channel marketing approach. We are participating in all of the industry events, and boards throughout the US, Canada, and Latin America. But I really think there’s nothing that speaks more loudly and more clearly than customer acquisition: partnering with banks like Grasshopper and EQ, and showing, from a case study perspective, this is why they chose us. This is what we’ve been able to do together. And this is why other organizations could model and do something similar, as well.