AI Will Help Bank Compliance: Temenos by Yolanda Redrup

AI will help bank compliance: Temenos By Yolanda Redrup

Australian Financial Review (AFR) Monday 2nd December 2019 775 words Page 20 | Section: Companies&Markets 416cm on the page

AI will help bank compliance: Temenos

Yolanda Redrup loans, deposits, anti-money laundering, transactions. wealth and front office management. ‘‘Classic traditional anti-money- The banks’ slow shift away from clunky Its biggest rivals are companies such laundering detection was based on legacy systems towards standardised as Infosys and Oracle, but increasingly rules – you put rules into a system and software packages will eventually make the competition is coming from Chinese applied it to the data that was input,’’ he compliance with things such as anti- players like Yusys and banks such as said. ‘‘What you do now is use emerging money laundering legislation easier for Westpac, which has started to offer technologies like artificial intelligence both regulators and financial institu- banking-as-a-service products. and big data to use logic and detect pat- tions, a financial software executive In the Asia Pacific region, Temenos terns and it gives you a better granular- says. grew its revenue by 30 per cent in the ity of checking, rather than just saying a Temenos’ Asia Pacific head Martin first six months of 2019, jumping from transaction is right or wrong. Frick said Australian banks are adopt- $US64.7 million in the previous corres- ‘‘There’s a lot going on [in machine ing standardised software packages ponding period to $US84 million. learning and AI] that constantly from the likes of his company, Infosys Australia is its third-biggest market improves detection.’’ and Oracle to modernise systems, speed in the region. It has gone from having As part of the company’s growth up development and save money. only a handful of people employed here here, Temenos has appointed an Aus- ‘‘Business software is all economies five years ago to more than 300. tralia manager for the first time, former of scale. We have 3000 clients globally The growth is due in part to the Microsoft Australia director of digital and we build a function and can deploy acquisition of local companies Avoka strategy and services, Michelle Tea. it to all of them at once,’’ Mr Frick said. for $US245 million ($362 million) and In the next few years, Temenos ‘‘If you have to build the same func- Rubik for $US50 million. expects most of its growth to be driven tion on your own, it takes longer and Mr Frick said local neobanks such as by the rise of the new challenger banks. you need all the testing and develop- Judo and Volt Bank were opting to use It is also going after the credit unions. ment skills in-house. It’s a very cumber- its entire stack of cloud-based software While the new banks provide a some process. to run their digital banking products, growth opportunity, Mr Frick said they ‘‘Using more software packages will but the big four were also using some faced a tough battle with the incum- lead to an increase in the quality of soft- of its software modules. bents as they tried to build up trust with ware and standardisation of how things But because of the difficulties in consumers. are done, so it’s easier for regulators to moving off legacy systems, penetration ‘‘It’s difficult to say if the challenger check. At the moment if you go to a big of software packages throughout the banks can have a dominant position in bank, then the next, you’ll find some- banking sector remains relatively low. Australia. It’s a very specific market thing very different in each of them Mr Frick estimated penetration in with the top four having more than which makes it harder to regulate.’’ banking at 30 per cent, whereas in 75 per cent market share. It’s super dif- Westpac chief executive Brian industries such as retail more than ficult to challenge that,’’ he said. Hartzer was forced to step down and 90 per cent of businesses were running ‘‘At the moment trust is an issue. I’m chairman Lindsay Maxsted brought software from the likes of SAP or happy to do a cross-border transaction forward his retirement after AUSTRAC Salesforce. with TransferWise, but would I give hit the bank with 23 million breaches He said software companies like them all my wealth? I don’t think so. of anti-money laundering laws and Temenos were well equipped to keep ‘‘But I think they will go after the ignoring patterns of transactions con- anti-money-laundering software up to most lucrative pieces of banking. A sistent with child exploitation. date and he believes – like Transfer- good example already is cross-border Temenos provides software for core Wise chief executive Taavet Hinrikus – payments because banks have tradi- banking functions such as accounts, it is easier than ever to monitor digital tionally made a fortune from this.’’

Licensed by the Copyright Agency (Australia). You may only copy or communicate this Delivering Print, Online, TV, Radio & media item with an appropriate license. The media item remains the legal property of its original creator. Copyright Streem Pty Ltd, 2018 Social media intelligence in realtime. Temenos APAC boss Martin Frick says advances in technology have made it easier to detect money laundering and crime ﬁnancing.