Julius Baer begins core renovation
Zurich-based Julius Baer will revamp its core systems with help from Temenos
Swiss private banking group Julius Baer has chosen Temenos for a major core banking system replacement project intended to progressively modernise its front and back office systems globally.
Julius Baer will use Temenos’ T24 modular software platform. The project will start with core system replacement in Asia, where T24 will be deployed to replace existing back office systems in Singapore and Hong Kong that are understood to be from Eri Bancaire. After that, front and back office systems will receive attention, as well the bank’s business in Europe (which runs on a proprietary in-house system) and all of the 50 countries where it operates.
“The private wealth industry is undergoing a major structural shift,” said David Arnott, chief executive at Temenos. “Regulatory burdens are rising at the same time as customer expectations are changing, driven by younger and more technically-savvy consumers. Julius Baer has the right strategy: to build a scalable, highly-automated IT platform for back-office operations with decoupled, cutting edge front-office capabilities that enable it to build rich, interactive and personalised experience across customers’ preferred channels.”
Last year, a study Restoring Profitability in the Digital Age, published by Temenos and Deloitte, found that banks that modernised their core systems are more profitable – at least, if they complete the project successfully.
“Banks running modern core banking systems have materially better profitability metrics,” it concludes. “Over the past five years, banks using third-party banking applications have enjoyed on average a 19% higher return on assets, a 28% higher return on equity and a 6.5% lower cost-to-income ratio than banks running legacy applications. The correlation exists across a large data series, over time and across regions, the last being particularly important given the significant disparity between the recent performance of banks from emerging and developed economies.”
