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How Temenos is co-creating AI products with banks, not just for them

Nine months into her role as Chief Product and Technology Officer at Temenos, Barb Morgan is focused on a simple principle when it comes to product strategy: quality over quantity. “We want to build less, but build it better,” Morgan said during a conversation at the Temenos Regional Forum Americas 2025 held May 28-30 in Miami.

Temenos’ approach centers on co-creating meaningful solutions with bank customers rather than rushing to market with multiple products. Morgan emphasized that the company is “really focused on making sure that whatever we put out there is meaningful,” as the industry navigates what she calls the “AI hype curve.”

Morgan’s insights reveal why many banks struggle with AI adoption despite the technology’s promise. The real barriers aren’t about computing power or algorithms — they’re messier problems involving decades-old data systems that were never designed for AI and organizational cultures that haven’t caught up to the pace of technological change. 

Her conversation also detailed Temenos’ bet on bringing innovation closer to customers, such as through its new hub in Orlando designed for co-creation, and why the company is taking a strategic and deeply integrated approach to AI that enables banks to deploy AI-powered solutions faster and safer.

Listen to full podcast

A three-pronged AI strategy

Temenos has structured its AI approach around three core components: Gen AI embedded directly into its platform and products, agentic AI with a first solution for sanctions screening already live at one Tier-1 bank, and an AI studio for custom use cases. “We have a lot of customers coming to us with very unique use cases, and so we want to provide them a platform that’s pre-built with banking modules,” Morgan explained.

The company’s focus on embedded AI addresses a common industry challenge. “Having it embedded, versus our customers trying to figure out how to bolt it onto our product, is really important to us,” she said. This approach allows banks to access AI capabilities without investing too many resources into integration.

Banks are ready for AI – their data isn’t

One of the biggest obstacles to AI adoption isn’t fear of technology, but foundational data issues, shares Morgan. “A lot of banks over the past 10 to 15 years went through this huge digital transformation, but what they didn’t transform was the data in the back end,” Morgan noted. “In order to leverage the power of AI, you have to have your data clean.”

This reality has shifted many of Temenos’ client conversations toward data readiness rather than AI capabilities. “Our clients also want to leverage their own data systems. So how clean is your data? Is it really ready? Because for secure AI products, you have to have your data in order,” she said.

Cultural change is the harder challenge

Beyond technical hurdles, banks face significant organizational resistance to AI implementation. “I was talking with one of our US banks last week, and he said I underestimated the amount of cultural change that’s necessary, because so many people are afraid of AI,” Morgan shared.

The fear stems from job displacement concerns rather than technological limitations. “They think it’s going to take my job away, versus thinking of it as augmenting their job and being more of a side by side partner,” she explained. This cultural aspect has to become a major focus for banks that want to succeed with their AI implementations.

A gradual approach to AI deployment

Temenos’ strategy acknowledges these cultural and technical challenges by allowing banks to phase in AI adoption. Morgan described how one tier-one bank using their agentic AI product FCM AI Agent started with just 5% of its traffic, then gradually increased it to 20%. “It wasn’t because they didn’t trust the technology. It was because they were getting the rest of the organization comfortable,” she said.

This incremental approach extends to customer-facing applications as well. “A lot of people, it seems, have their favorite [Gen AI] tool on their phone,” Morgan observed. “I think maybe the banks have underestimated that the customers are actually ready to interact with AI.”

Bringing innovation closer to customers

Part of Temenos’ US expansion includes the opening of its Orlando Innovation Hub, designed specifically for co-creation with bank customers. “Instead of just expanding one of our existing offices, we’re actually going into a brand new building,” Morgan said. “It’s all about being able to do the design workshop, but then the space can transform to doing co-development together.”

The facility will include spaces that can replicate bank branch environments. “There’s a space where we can make it feel like you’re walking into the branch of the bank, and so we can actually recreate exactly what it’ll feel like for their customers,” she explained.

Market-centric over centralized delivery

The Orlando hub represents a broader shift in Temenos’ delivery model. “Over the past 30 years, we have had a pretty centralized delivery team, and this is about bringing it closer to our customers,” Morgan said. “Versus centralized delivery, it’s more about market-centric innovation.”

This approach is driving the firm’s hiring, with plans underway to recruit for 200 positions at its Orland Innovation Hub. “At a recent hiring event, every candidate who received an offer accepted,” Morgan noted. “They were really excited about the co-innovation and the ability to actually work how we want and bring our best selves.”

Building products that actually ship

Morgan has instituted a new discipline around product announcements, moving away from proof-of-concepts toward deliverable solutions. “We’re only going to announce things when they’re live and ready to use now,” she said.

The company has also allocated 25% of its development capacity specifically to customer-driven features. “We’ve actually allocated about 25% of our capacity to just listening to customers and putting their needs on top of what we would already have planned,” Morgan explained.

This customer-centric approach extends to the broader organizational transformation Morgan is leading. 

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“Take a hard look at your current ecosystem. If you were to double the assets under your management today, would your current ecosystem sustain that growth?” Finastra’s Kristen Lista, on what FIs need to do to compete in SME lending

Non-bank financial institutions (NBFIs) are capturing more and more market share in SME lending by leveraging technology to offer quicker lending solutions. This puts pressure on FIs to evolve their approaches while managing costs and improving service quality.

Finastra’s Principal Product Manager Kristen Lista joins the Tearsheet podcast today to discuss the most critical areas where FIs need to focus: consolidating technology to improve efficiency, decreasing the time between application and access to funding, enhancing back-office operations, and creating more client-centric experiences. 

Lista offers a valuable look inside the complex web of challenges that FIs are facing when trying to improve the SME lending products. From technology integration strategies to practical advice on process improvement, Lista offers an actionable blueprint that can help FIs better compete in the SME lending space, driving growth and customer loyalty.

Watch the full episode

 

Listen to the full episode

Barriers SMEs face in accessing funding

Limited credit history, lack of collateral, and sitting outside FI’s credit box prevent SMEs from tapping much-needed financial resources.

Addressing these barriers requires financial institutions to embrace digital transformation: “To overcome these barriers, FIs have to innovate and embrace digital transformation, and that helps to provide faster, more efficient lending decisions, ultimately getting to that time to say yes much quicker to provide for the SMEs funding needs.”

The threat of new entrants

Traditional financial institutions face significant challenges competing with more agile non-bank lenders in the SME space. Lista points out that NBFIs have gained market share by utilizing technology to streamline the lending process.

“Traditional FIs really are struggling to compete with non-bank financial institutions in the SME lending space, because NBFIs leverage technology to offer faster, more flexible lending solutions,” Lista noted. She added that financial institutions also face a tighter cost basis in the SME lending space, which means they need to find ways to reduce costs without compromising service quality, which is very tough to do.

But beyond technology and cost challenges, FIs may be overlooking a chance to diversify their offerings: “There’s really an opportunity and a need for FIs to grow into different asset classes as well, such as moving from SME lending into commercial and syndicated lending, which can help FIs diversify their risk and open new revenue streams.”

How technology can help FIs build better CX

CX and bank office efficiency play a critical role in the relationship SMEs have with their FIs –  technology in validating financial statements, automating underwriting, and enhancing loan servicing capabilities all contribute to the quality of service SMEs receive from their FIs. 

Lista also highlighted a frequently overlooked area, loan servicing. It’s here that FIs have a particularly important investment to make: “Loan servicing is kind of an afterthought in digital transformation, but it really can’t be an afterthought anymore. Loan servicing capabilities have to have that digital transformation, as well, and provide for better communication and transparency for bank clients.”

The importance of modernizing back-office operations

One reason why FIs have struggled to keep up with the pace of their competitors is their historical underinvestment in back-office operations.

“FIs really haven’t focused on the back-office servicing operations of the SME lending process,” Lista said. “There’s a lot of reasons for that. Primarily, they’ve been underfunded because banks thought that the back-office was not revenue generating, and so they would really focus their resources and their budget going towards client-facing systems.”

Blueprint for customer retention and growth

At a time when FIs have to play catch up with their NBFI counterparts, the key to their success may lie in focusing on customer needs, expectations, and experience. 

On the revenue front, Lista noted that while SME loans are typically lower in value, they’re higher in volume, creating a unique opportunity: “In order to grow their revenue, they have to prioritize the customer experience to get that retention and loyalty, and if they do that, they may see an approximate two and a half times increase in their revenue growth compared to those who do not prioritize customer centricity.”

To-do list: What FIs can do to better serve their SME customers

FIs that want to improve their SME customer experience can take the following steps:

– Gain a full system view: Undertake a detailed overview of the systems involved from loan initiation through servicing and termination. “Key systems that you should look at are customer portals, your borrower portals. You should be looking across the ecosystem at KYC, AML systems, loan origination systems, loan documentation systems, and, of course, your loan servicing system.”

– Evaluate potential for automation: Integration between these systems that contribute to the loan servicing process is crucial: “It’s important to look at what they’re doing, what the purpose is, but also, how do you automate and integrate these systems together and piece them together in an automated way throughout the ecosystem?”

– Don’t overlook KYC and AML – they impact CX: KYC and AML processes have a significant impact on turnaround time and customer experience. When considering modernization strategies, this is a critical area of evaluation with a CX lens. Complex KYC and AML processes can impact onboarding success and impact client retention. “If they don’t have smooth transitions from a portal to a KYC system, for example, the borrower is going to feel the delay and the impact,” said Lista. 

– Find technology partners that can technological lift in automation: Tools like Finastra’s offerings can help FIs create a consolidated and streamlined lending ecosystem.

“Finastra offers a lot of solutions to enable this consolidated and streamlined end-to-end ecosystem,” Lista said. “Our products help FIs to digitally transform their ecosystems to provide those right SME offerings and mirror up with their demands and expectations.”

– Integrate teams into SME strategy: “FIs must not only look at the technology, but they must also integrate their people and processes within the technology as well,” Lista advised. “Enhancing collaboration across business segments—the front office, the back office, the middle office—and also working with their IT departments and their technology departments internally. That collaboration is key.”

To read more about what FIs can do to build competitive lending experiences and products for SMEs and find partners that can accelerate modernization efforts and positively impact bottom lines, please visit Finastra’s website.

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Wise goes West: Why the London fintech star is headed for a US stock exchange, and what it signals about global capital markets

    Wise bets on NASDAQ for its next chapter

    In the early 2010s, Wise (then known as TransferWise) made a name for itself by targeting the bloated fees of international money transfers. Its brand was scrappy and distinctly European. But over a decade later, the company’s next chapter isn’t being penned in London or Tallinn, but on Wall Street. 

    Earlier this month, Wise announced it plans to shift its primary stock listing to the US, a move both strategic and symbolic that underscores tectonic shifts in the global listings landscape.

    From crown jewel to continental drift: The primary London listing exodus
    Before zeroing in on Wise’s decision, let’s take a step back to analyze the situation at the London Stock Exchange (LSE). The past five years have seen a steady drip of high-profile companies leaving the LSE in favor of the US, a migration that now totals over $100 billion in market cap. 

    Marsh & McLennan, a professional services provider in risk, strategy, and HR, announced its plan to delist from the LSE in October 2023 and cancel its listing on the Official List of the UK Financial Conduct Authority. The company cited the disproportionate costs and administrative burdens of maintaining a secondary listing in London, given that the majority of its trading occurs on the New York Stock Exchange (NYSE). The delisting took effect on November 27, 2023. Similarly, other firms like construction supplier Ferguson and pharmaceutical firm Indivior have all either moved or are moving primary listings to US exchanges.

    The reasons cited are familiar: lackluster liquidity in London, persistently lower valuations, and limited index inclusion options for growth companies. Despite the UK’s post-Brexit ambitions to become a tech and finance hub, its primary exchange seems increasingly less appealing to the very firms that represent its future.

    Wise’s situation fits this mold, but also tells us more.

    Why Wise is making the leap

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    A tale of two innovations: Square’s AI edge for SMBs and Morgan Stanley’s code makeover

      From payments to investments: The divergent paths of AI transformation

      It’s a new week of the 10Q edition, and the conversation around AI isn’t slowing down. And judging by the pace of innovation, companies are in no mood to rest. 

      We track two new AI developments this week from well-known public companies: Square, the payments and commerce unit of Block, and legacy bank Morgan Stanley.

      AI In Payments: How Square’s Conversational AI Assistant signals a shift in SMB tech — and why it matters

      Square has introduced a conversational AI assistant, Square AI, to help sellers by answering questions about using Square’s business technology platform and providing insights into their own business trends.

      In a time when nearly every company is racing to slap AI onto a product label, Square’s latest move feels different, not because it’s more technically sophisticated, but because it directly addresses a chronic pain point for small business owners: decision paralysis in the face of complexity.

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      How Pagaya (PGY) and Upstart (UPST) are venturing deeper into AI to make fintech lending more intelligent

        Fintech lending dives deeper into the algorithm age

        Wall Street loves a good buzzword, but when AI appears on quarterly earnings calls and product roadmaps, it’s not just talk – it’s a pivot. Over the past week, some of the non-headline-grabbing public financial firms have moved their advanced AI efforts into production, beyond the lab phase and into frontline operations. 

        We look at how Pagaya and Upstart fit into today’s narrative, which goes beyond their AI initiatives to focus on how they are operationalizing those efforts and gradually integrating AI into their company architecture.

        Pagaya’s AI engine is now powering a $300 million BNPL push

        For anyone watching the mechanics of modern consumer finance, Pagaya is making an effort to become one of the critical AI players in the lending world.

        Founded in Israel and listed on the NASDAQ [PGY], Pagaya built its name on a very particular skill: using artificial intelligence to underwrite “second-look” loans, the kind traditional lenders might decline at first glance. The company’s bread and butter is partnering with financial institutions that want to expand credit access without eating a mountain of risk. Its AI models pore over alternative data and make fine-tuned credit decisions that don’t rely solely on FICO scores.

        Recent AI developments

        i) BNPL Bond Issuance: In the past week, Pagaya made a big move: it issued a $300 million bond backed by buy now, pay later (BNPL) loans, a first for the company. It did this in partnership with Klarna, the Swedish BNPL giant that’s been revamping its financials ahead of a possible IPO. The bond deal, arranged by J.P. Morgan Chase and Apollo’s Atlas, gives Klarna more flexibility to offload credit exposure while allowing Pagaya to flex its AI muscle in a hot but volatile space. The bond was oversubscribed and included AAA-rated tranches yielding about 1.75 percentage points above Treasury bonds, indicating strong investor demand despite higher risk premiums compared to competitors like Affirm.

        What makes this interesting is that Pagaya is applying its AI underwriting system to a new frontier, point-of-sale financing, where risks are nuanced, margins are thin, and speed is everything. Klarna handles the consumer touchpoints; Pagaya, behind the curtain, crunches the credit decisions and helps get the funding flowing.

        ii) Asset-Backed Securities (ABS) Issuances: This isn’t Pagaya’s first rodeo in asset-backed securities…

        What we’re seeing now is Pagaya expanding its model, not pivoting. The BNPL-backed bond is less about jumping on a trend and more about applying its proven tech stack to an adjacent product, one that’s booming in retail but increasingly scrutinized for risk.

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        Remitly’s Q1 in review — and why its WhatsApp integration could be a turning point for fintech UX

          A conversation on Remitly’s financial performance, platform integration, & conversational AI developments

          The tech world loves a good shake-up story, especially when it comes to payments. But when the goal is only to upend an industry, things can get lost in translation. While speed and innovation are great, and one of the essential aspects of payments, for many, even small barriers to sending money can feel like an insurmountable challenge. That’s the market Remitly has focused on. The payments firm is solving a more fundamental problem — how to make sending money home a little more predictable, a little less frustrating.

          Earlier this month, Remitly shared its Q1 2025 financial results. First quarter revenue was $361.6 million, up 34% YoY, and active customers increased to over 8 million, up 29%. 

          A week before its earnings release, the company announced its integration with WhatsApp. Through WhatsApp, Remitly users can send, monitor, and control their international transfers without downloading another app. Remitly’s goal isn’t necessarily to get users to only use the app — it’s to keep them in the Remitly ecosystem, regardless of channel.

          I spoke with Matt Oppenheimer, co-founder and CEO of Remitly, to discuss the Q1 earnings highlights, and with Ankur Sinha, Chief Product and Technology Officer, to learn more about the new WhatsApp integration and what this launch signals about the future of remittances and fintech UX.

          We also explore the role of Remitly’s conversational AI in enabling users to send money directly within WhatsApp, check live exchange rates and fees before sending, and track transfers — all while receiving support in a single conversation thread.

          Matt Oppenheimer, Co-Founder and CEO, Remitly

          Q: What key strategies contributed to Remitly’s Q1 2025 positive outcome?

          Matt Oppenheimer: Our strong Q1 results reflect the compounding effect of three core drivers: 

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          How Citizens Bank is building GenAI with a five-year vision, not just quick fixes

          Investment in data is the hallmark of successful Gen AI implementations, according to Citizens’ Chief Data and Analytics Officer, Krish Swamy. 

          Giving us a system wide view of how Citizens is leveraging Gen AI, Swamy joins the podcast to talk about harnessing the power of data to drive decision-making, enhance customer experiences, and navigate the complexities of digital transformation in the banking sector. 

          Our conversation delves into the challenges and opportunities of building a data-driven culture within a traditional banking environment, and how Citizens is positioning itself at the forefront of financial innovation through strategic analytics initiatives.

          Swamy, who also heads the firm’s Generative AI Council, shares his vision for the future of data in banking and the tangible ways Citizens is turning data insights into meaningful actions that benefit both the institution and its customers.

          Watch the full episode

          Listen to the full episode

          Subscribe: Apple Podcasts | SoundCloud | Spotify

          Long term view of Gen AI implementations

          Citizens’ approach to Gen AI is best described as cautious and optimistic. While the firm is not rushing into any use case and is instead taking a methodical approach to evaluating every time a process or task can be improved by Gen AI, it is also sketching out what role the technology could play in the future for its employees and customer experience. 

          “We’re not just taking a process, or a component within a process, and applying Generative AI there. While that might be the starting point, the end game is always going to be: How does this function three or five years from now? How do we work towards that end game?” said Swamy. 

          Strong data based foundation as a differentiator

          Swamy is a firm believer in using a comprehensive data infrastructure as the scaffolding for new technological implementations. “When we invest in data, when we make data easily available, and when we teach people how to use data, I think they become a lot more effective at being able to self-serve. So creating that foundation is an area of differentiation,” he shared. 

          One area where this focus helps the bank drive powerful results is fraud, which has seen a significant uptick since the pandemic, according to Swamy. “We’ve spent a lot of time overhauling the fraud infrastructure and the fraud platform itself. There are multiple sub components around fraud detection, claims processing, case management, which all are parts of the overall fraud value chain. And we made investments to improve the quality of those platforms,” he said. 

          Helping the fraud team stay ahead of bad actors, is the firm’s move to the cloud, which should be completed by the end of this year. “We are almost 80% migrated to AWS, and it makes it easier to get access to data and we are able to bring better data when it comes to our fraud defenses,” he said. 

          Having a centralized source for the data also ensures that fraud teams that include analysts and contact center employees are working from the same source of information. This allows these teams to be more effective and coordinated when trying to spot trends and undertake fraud mitigation strategies, he shared. 

          Another area where the firm is applying data-led Gen AI strategies is the call center. “A lot of the customers’ questions tend to be fairly narrow, almost esoteric and [call enter employees] have to reference procedure documents to be able to give that answer,”  he said.

          In the past, call center employees have used keyword search to access this information, but now the firm is using Gen AI and helping call center agents learn how to prompt more effectively to reach information,” he said. 

          Similarly, the firm is also using the tech to help its developers take care of some of the most frustrating parts of coding: documentation and testing. “Those are areas where we’ve been able to find a lot of leverage from giving software development engineers the right tools to be able to do the testing, documentation, sometimes even writing code, and become more efficient at that,” he shared. 

          Citizens’ partnership strategy 

          When it comes to assembling the right technology partners, Swamy believes building consistency across the organization is the golden rule. “For instance, there are multiple teams that need the ability to have machine learning platforms, and it is conceivable that everybody then goes out and figures out their own thing. That would be a really bad outcome, because I think that would lead to proliferation of costs and would lead to loss of control,” he said.

          “What you do need to do is make sure these solutions are all integrated with all of the other solutions, which is a lot of work for sure. The place where we have spent a lot of time on homegrown solutions is on managing our data. Those are critical assets which are unique to us, which we would not be comfortable leaving completely in the hands of a commercial solution or a bought out solution,” he said.

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          Affirm and Robinhood’s Earnings: The story so far and the road ahead

            The growth paths of 2 fintechs through their recent quarterly earnings

            The earnings cycle has commenced, and companies are beginning to report their first set of financial results for this year.

            A week ago, Affirm disclosed its financial results. We assess the firm’s performance, tracing its evolution and exploring what likely lies ahead for the BNPL provider.

            AFFIRM

            Affirm’s roots run deep in the desire to rethink how we interact with money, specifically when it comes to buying stuff we want, but perhaps can’t always afford upfront.

            In an increasingly digital world, it’s a business model that resonated with consumers seeking flexibility.

            A look at Q3 2025: Still on the up and up
            Now, let’s talk shop. For Q3 2025, Affirm posted strong numbers that got the analysts sitting up a bit straighter. The company reported a revenue increase of 36% to $783 million in revenue, topping expectations. GMV growth accelerated, up 36% YoY to $8.6 billion. The active consumer base reached approximately 22 million, with nearly 2 million new users in the last quarter. Repeat users still accounted for 94% of all transactions.

            What stands out about Affirm’s performance this quarter is the momentum they’ve built in key growth areas. Consumer spending is bouncing back, and Affirm’s BNPL service is benefiting from that as people are increasingly seeking more control over their finances. But there’s more going on under the hood.

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            Green Dot lends real-world reach to Crypto.com’s digital ambitions

              Crypto meets convenience with Green Dot’s Retail Network

              Green Dot and Crypto.com are teaming up to expand banking and money management features for Crypto.com’s US users — a move that brings traditional financial tools closer to the crypto world. The partnership gives Crypto.com customers new ways to fund and manage their Cash Accounts, including earning interest and depositing US dollars digitally or with cash at Green Dot’s nationwide retail network.

              At the core of the collaboration is Green Dot’s embedded finance platform, Arc, which will power a new interest-earning savings vault and streamline the movement of money into and out of Crypto.com accounts. 

              For Crypto.com, which offers access to more than 350 cryptocurrencies, the added infrastructure could help make digital assets more accessible to mainstream users. And with several locations in the Green Dot Network — ranging from Walmart to CVS — the companies are betting that the real-world utility of crypto begins with meeting customers where they are.

              Why partnerships like these matter: The gap between fiat currencies and digital assets continues to be a major obstacle to broader cryptocurrency adoption. This challenge presents an opportunity for banking-as-a-service (BaaS) providers that already operate within established regulatory frameworks and payment infrastructures to step in and deliver value.

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              While no one was looking, Intuit has built a fintech empire

                Intuit isn’t loud — but it ain’t sleeping either

                If you’ve been keeping tabs on Silicon Valley’s power players lately, you might have noticed something interesting: Intuit has been unusually quiet. No flashy keynotes. No viral product demos. No crypto moonshots or AI-fueled promises to change the world (at least not too loudly IMO). 

                But silence doesn’t mean stasis. The company has been playing its cards close to the chest lately.

                If you zoom out and squint a little, there’s a quiet — but deliberate — transformation underway. Behind the scenes, Intuit is doing what many seasoned companies with established customer bases aim to do: build out an end-to-end ecosystem so sticky and essential that customers don’t want — or need — to leave.

                The firm is likely on that trajectory, making a shift from that tax company into something more expansive: a full-spectrum financial operating system. And it’s doing that through carefully chosen, strategic acquisitions.

                The acquisition spree: In April, Intuit announced plans to acquire Deserve, a mobile-first credit card platform, and also signed an agreement to acquire HR platform GoCo. The press releases were tidy, but the impact of these moves is anything but small.

                They signal a clear thesis: Intuit is doubling down on owning more of the financial lifecycle, especially for small to midsize businesses (SMBs), where it already holds a strong foothold with QuickBooks. But instead of reinventing the wheel, it’s opting to buy the ones that are already spinning efficiently.

                GoCo: The back-office glue

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