Listen: Weekly Wrap discussion on how Temenos is accelerating innovation

Loraine Lawson
Hi, everyone, I’m deputy editor Loraine Lawson, and welcome to The Buzz from Bank Automation News, where we explore how automation technology is transforming the banking industry. This is our weekly wrap for what’s happening in the industry this week. And before beginning I’d like to give a big thanks to BAN sponsors and advertisers, Glia and Volante. Thank you so much for your support. I’m pleased to be joined by Associate Editor Aaron Marsh. It is November 19, and here are the biggest news items from our editorial team this week.Temenos held its developer conference SCALE. They announced a new sandbox that would allow new capabilities for developers. They also discussed three innovative use cases that we covered in our new story. But they also launched two of those exchange which Martin Bailey Director of Innovation and ecosystem called a new expanded comprehensive, Temenos Ecosystem. And it builds on their Amazon US marketplace for partnering fintechs Now, what this means is that Temenos is offering more support for beginning fintechs they will actually reinvest 20% of their exchange revenues into their fintech innovation program.And that doesn’t mean that they’re slacking on support. However, Martin Bailey said that all the providers are pre integrated, and cloud ready. So what this will do is it’ll give banks that want to be a little more cutting edge the opportunity to partner with these fintechs and use their solution with their core. But if you are risk-averse, then you will be able to deal with more established fintechs. So Aaron, you reported on Backbase, this new data lake and its partnership with Microsoft, that’s another company with a big cloud ecosystem. Can you talk a little about that?Aaron Marsh
Yeah, sure, Loraine. So once again, you hit on it, this is we’re talking about a very powerful core, cloud-based technology that that has quite a bit of versatility there. What we saw earlier in the month when this went to like general availability, is that there is a number of these partners who are offering like deeper integrations with the with the Microsoft Cloud. So it’s going to be easier, you know, to add and implement their technologies for those who adopt the Microsoft Cloud for Financial Services.But what we’re seeing is some of these partners are sort of taking an additional step. They’re tapping the artificial intelligence and computing strength of the Microsoft Cloud, and Microsoft software like Teams, certainly Azura as part of this as well, but they’re using the strengths of the Microsoft Cloud and software to then enhance some of their own capability. So we’re seeing with Backbase has now got like a data lake capability and functionality that they’re offering as part of their as part of their solution. And that builds off of the Microsoft cloud’s computing and artificial intelligence strength.Loraine Lawson
It’s going to be interesting to watch, because a lot of the big players now Google, Microsoft, and Amazon are offering solutions just for financial institutions. So it’ll be interesting to see how the cores align with that and whether or not it’ll end up being a sort of team sport, where if you’re with Microsoft, you’re with, I don’t know, Finastra are one of the cores. So that’ll be interesting to watch.I did read in your story that Vice President and Global Head of Business Consulting at Infosys Finacle said one reason companies are moving to cloud because it reduces the cost of operations by shifting capital expenses to operating expenses. I did find that interesting because other in other industries, they have found that those costs start to escalate once you’re onboard. And so some companies are starting to adopt what they call a chief cloud officer to manage those costs.It reminds me of when I first subscribed to Netflix when I was paying eight bucks, and now I’m paying the 18 bucks, which is sort of the cost of the cable that I replaced with Netflix. So that could be something to watch moving forward. You also recorded this week on trends in fraud. Now this year ransomware has been the big cybersecurity story. What does the Nasdaq Head of Global anti financial crime say are the emerging trends?

Aaron Marsh
We’re very privileged to have had a conversation with Valerie Bannert-Thurner, right. As you mentioned, she’s the global, head of their global anti-financial crimes technology and business. And, you know, I’d like to preface that one of the reasons you talk about AML so much is that this is an area where there’s so much to be gained right now. To sort of frame the conversation, the United Nations estimates, there’s something like, you know, between two and four or $4.4 trillion laundered in US dollars equivalent, laundered throughout the global financial system every year. Now, okay, so it’s a pretty big amount of money. And then for the good guys, 1% or less of that, perhaps much less like 0.1%, is actually detected. So this is actually an area where we can say, pretty much, the bad guys get away with it almost all the time. And crime pays. So it’s, so here’s an area where we’ve really got to make some improvements.

So Valerie and I, we talked about some of the things that make it difficult. And she’s, as you mentioned, she’s pointing out some trends. One of the things going on, and people don’t necessarily think about this, but the bad players in this space, those who are looking to launder money, are getting very technologically sophisticated. They’re investing, you know, their proceeds in very complex systems. And they’re moving money across borders, sometimes multiple borders, through multiple companies, and through many wallets, so it’s very difficult to trace, it’s very difficult to follow this, it’s hard to find.

But as part of the good news that I heard from Valerie, there are some things that are improving prospects of finding this money that’s laundered, and some of it is, you know, artificial intelligence and machine learning are being applied to increase the effectiveness of AML software and systems. So to give you an idea, usually, what you have to deal with as a bank is just like a ton of red flags, as potential transactions that could be questionable, and you have to kind of sift through many of these, you know, manually, and it’s just very tedious. So AI and ML are being used not only to help sort through all the red flags that you get, but also reduce the number of false positives that you get. So we’re trying to kind of hone in and get get people to look at, you know, only the stuff that matters.

The other thing that she mentioned to me, and she even called this the big one this year. So in terms of what we should be looking for, cryptocurrency and the underlying blockchain technology that underpins cryptocurrency have seen like massive usage spikes, massive investment this year. And that presents a number of a number of very particular challenges. First of all, you have anonymity of players involved in cryptocurrency trading. So the both parties there, there’s an anonymity. And then also, as Valerie mentioned, it introduces new payment rails. So payments are, you’re going to have to follow them, they’re coming in from different directions. And you’ve got these anonymous players in there, and it presents some new challenges. So just a few things that are sort of going on in that space that can be very difficult to get a handle on.

Loraine Lawson
Yes. Earlier in the year, I spoke with Chief Risk officers and false positives were one of their main concerns. So I’m sure that will resonate with any CHIEF RISK officers out there listening. It does seem like we can’t get away from crypto, if you’re a financial institution you are going to have to engage with it was interesting what you said about, you know, the difficulties in cracking down on crypto, the Biden administration, this earlier this month, I think it was to take action to sort of crack down on that ransomware program, using sanctions to cut off digital payment systems that allow such activities to happen, especially in the crypto space. So that’s interesting. I think that’s all we have time for today. But Aaron, can you tell us a little bit about what you’re reporting on next week?

Aaron Marsh
Well, look for this, you mentioned, you know, how banks maybe can get involved in the crypto space. I just had a very interesting conversation with a consulting group that has a new service to discuss with banks, exactly that, banks and financial institutions that might be looking to get into this space. They’re offering a service to sort of explore all those possibilities with you. So I think that’s definitely one thing that’s on my radar screen that people should be looking for.

Loraine Lawson
Next week, I’ll be reporting on bot governance, what it means how you do it, some tips from some vapes and consultants. I also have a podcast with Finastra. They’re offering three strategies for becoming a next generation bank. So that should be fun. Thank you for joining us for the Weekly Wrap on The Buzz. For more podcast content, check out Bank Automation News and search The Buzz from Bank Automation News on iTunes and Spotify. Thank you.

Loraine Lawson
Hi, everyone, I’m deputy editor Loraine Lawson, and welcome to The Buzz from Bank Automation News, where we explore how automation technology is transforming the banking industry. This is our weekly wrap for what’s happening in the industry this week. And before beginning I’d like to give a big thanks to BAN sponsors and advertisers, Glia and Volante. Thank you so much for your support. I’m pleased to be joined by Associate Editor Aaron Marsh. It is November 19, and here are the biggest news items from our editorial team this week.Temenos held its developer conference SCALE. They announced a new sandbox that would allow new capabilities for developers. They also discussed three innovative use cases that we covered in our new story. But they also launched two of those exchange which Martin Bailey Director of Innovation and ecosystem called a new expanded comprehensive, Temenos Ecosystem. And it builds on their Amazon US marketplace for partnering fintechs Now, what this means is that Temenos is offering more support for beginning fintechs they will actually reinvest 20% of their exchange revenues into their fintech innovation program.And that doesn’t mean that they’re slacking on support. However, Martin Bailey said that all the providers are pre integrated, and cloud ready. So what this will do is it’ll give banks that want to be a little more cutting edge the opportunity to partner with these fintechs and use their solution with their core. But if you are risk-averse, then you will be able to deal with more established fintechs. So Aaron, you reported on Backbase, this new data lake and its partnership with Microsoft, that’s another company with a big cloud ecosystem. Can you talk a little about that?Aaron Marsh
Yeah, sure, Loraine. So once again, you hit on it, this is we’re talking about a very powerful core, cloud-based technology that that has quite a bit of versatility there. What we saw earlier in the month when this went to like general availability, is that there is a number of these partners who are offering like deeper integrations with the with the Microsoft Cloud. So it’s going to be easier, you know, to add and implement their technologies for those who adopt the Microsoft Cloud for Financial Services.But what we’re seeing is some of these partners are sort of taking an additional step. They’re tapping the artificial intelligence and computing strength of the Microsoft Cloud, and Microsoft software like Teams, certainly Azura as part of this as well, but they’re using the strengths of the Microsoft Cloud and software to then enhance some of their own capability. So we’re seeing with Backbase has now got like a data lake capability and functionality that they’re offering as part of their as part of their solution. And that builds off of the Microsoft cloud’s computing and artificial intelligence strength.Loraine Lawson
It’s going to be interesting to watch, because a lot of the big players now Google, Microsoft, and Amazon are offering solutions just for financial institutions. So it’ll be interesting to see how the cores align with that and whether or not it’ll end up being a sort of team sport, where if you’re with Microsoft, you’re with, I don’t know, Finastra are one of the cores. So that’ll be interesting to watch.I did read in your story that Vice President and Global Head of Business Consulting at Infosys Finacle said one reason companies are moving to cloud because it reduces the cost of operations by shifting capital expenses to operating expenses. I did find that interesting because other in other industries, they have found that those costs start to escalate once you’re onboard. And so some companies are starting to adopt what they call a chief cloud officer to manage those costs.It reminds me of when I first subscribed to Netflix when I was paying eight bucks, and now I’m paying the 18 bucks, which is sort of the cost of the cable that I replaced with Netflix. So that could be something to watch moving forward. You also recorded this week on trends in fraud. Now this year ransomware has been the big cybersecurity story. What does the Nasdaq Head of Global anti financial crime say are the emerging trends?

Aaron Marsh
We’re very privileged to have had a conversation with Valerie Bannert-Thurner, right. As you mentioned, she’s the global, head of their global anti-financial crimes technology and business. And, you know, I’d like to preface that one of the reasons you talk about AML so much is that this is an area where there’s so much to be gained right now. To sort of frame the conversation, the United Nations estimates, there’s something like, you know, between two and four or $4.4 trillion laundered in US dollars equivalent, laundered throughout the global financial system every year. Now, okay, so it’s a pretty big amount of money. And then for the good guys, 1% or less of that, perhaps much less like 0.1%, is actually detected. So this is actually an area where we can say, pretty much, the bad guys get away with it almost all the time. And crime pays. So it’s, so here’s an area where we’ve really got to make some improvements.

So Valerie and I, we talked about some of the things that make it difficult. And she’s, as you mentioned, she’s pointing out some trends. One of the things going on, and people don’t necessarily think about this, but the bad players in this space, those who are looking to launder money, are getting very technologically sophisticated. They’re investing, you know, their proceeds in very complex systems. And they’re moving money across borders, sometimes multiple borders, through multiple companies, and through many wallets, so it’s very difficult to trace, it’s very difficult to follow this, it’s hard to find.

But as part of the good news that I heard from Valerie, there are some things that are improving prospects of finding this money that’s laundered, and some of it is, you know, artificial intelligence and machine learning are being applied to increase the effectiveness of AML software and systems. So to give you an idea, usually, what you have to deal with as a bank is just like a ton of red flags, as potential transactions that could be questionable, and you have to kind of sift through many of these, you know, manually, and it’s just very tedious. So AI and ML are being used not only to help sort through all the red flags that you get, but also reduce the number of false positives that you get. So we’re trying to kind of hone in and get get people to look at, you know, only the stuff that matters.

The other thing that she mentioned to me, and she even called this the big one this year. So in terms of what we should be looking for, cryptocurrency and the underlying blockchain technology that underpins cryptocurrency have seen like massive usage spikes, massive investment this year. And that presents a number of a number of very particular challenges. First of all, you have anonymity of players involved in cryptocurrency trading. So the both parties there, there’s an anonymity. And then also, as Valerie mentioned, it introduces new payment rails. So payments are, you’re going to have to follow them, they’re coming in from different directions. And you’ve got these anonymous players in there, and it presents some new challenges. So just a few things that are sort of going on in that space that can be very difficult to get a handle on.

Loraine Lawson
Yes. Earlier in the year, I spoke with Chief Risk officers and false positives were one of their main concerns. So I’m sure that will resonate with any CHIEF RISK officers out there listening. It does seem like we can’t get away from crypto, if you’re a financial institution you are going to have to engage with it was interesting what you said about, you know, the difficulties in cracking down on crypto, the Biden administration, this earlier this month, I think it was to take action to sort of crack down on that ransomware program, using sanctions to cut off digital payment systems that allow such activities to happen, especially in the crypto space. So that’s interesting. I think that’s all we have time for today. But Aaron, can you tell us a little bit about what you’re reporting on next week?

Aaron Marsh
Well, look for this, you mentioned, you know, how banks maybe can get involved in the crypto space. I just had a very interesting conversation with a consulting group that has a new service to discuss with banks, exactly that, banks and financial institutions that might be looking to get into this space. They’re offering a service to sort of explore all those possibilities with you. So I think that’s definitely one thing that’s on my radar screen that people should be looking for.

Loraine Lawson
Next week, I’ll be reporting on bot governance, what it means how you do it, some tips from some vapes and consultants. I also have a podcast with Finastra. They’re offering three strategies for becoming a next generation bank. So that should be fun. Thank you for joining us for the Weekly Wrap on The Buzz. For more podcast content, check out Bank Automation News and search The Buzz from Bank Automation News on iTunes and Spotify. Thank you.