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June 19, 2015updated 04 Apr 2017 12:51pm

Temenos poised for growth in LatAm

Having entered the Latin American market a decade ago, Temenos has increased its presence strongly across countries – Brazil being the latest addition. Head of Latin America, Enrique O'Reilly, tells Meghna Mukerjee about the region’s strengths and challenges, and how “local presence and the right attitude” is the banking software vendor’s growth mantra

By Meghna Mukerjee

Having entered the Latin American market a decade ago, Temenos has increased its presence strongly across countries – Brazil being the latest addition. Head of Latin America, Enrique O’Reilly, tells Meghna Mukerjee about the region’s strengths and challenges, and how “local presence and the right attitude” is the banking software vendor’s growth mantra

In 2014, Swiss software vendor Temenos grew its business by 600% in Latin America. Growth plans for 2015 seem even more robust with Temenos tapping into a new country and opening an office in Brazil in April 2015 – a market that has been traditionally insular. The new office and inception into Brazil adds to the vendor’s existing footprint in the region, with offices in Mexico, Costa Rica, Ecuador, and Miami.

Temenos already has two clients in Brazil – Banco Itaú and Banco Votorantim.

Speaking to RBI at the Temenos Community Forum (TCF) 2015 in Istanbul, Turkey, that took place between 19 and 21 May, Enrique O’Reilly, regional head of Latin America at Temenos, says he is pleased about this expansion.

“It is a strategic decision to grow. There are great opportunities in the Brazilian market and it has only recently become more outward looking and begun integrating itself with the rest of the world.

“We know that Brazil has some challenges so we won’t pretend like we will attack all the banks there at once. But we believe we can quickly make an impact and offer our solutions to a market that has the need for it,” he says.

In parallel, Temenos is investing and preparing its core banking system to be “more Brazilian”.

“It is going to take time, but instead of going to a bank and saying ‘let me replace your core’, we are also capable of saying ‘let me replace your guarantees capability or take care of your trade finance’. Through some of these components, we should begin to have a presence with Brazilian banks. The flexibility of products and the resources that we have, internally and externally, allows us to offer good solutions to the Brazilian market,” he explains.

O’Reilly came into his current role in 2012 and is based out of Temenos’ Miami office. He describes the Latin American region as “two hemispheres”.

“On one hand you have Brazil, which is half the size of the market. Then you have all the other countries led by Mexico in terms of size. They are the Spanish speaking countries in the region.”

Temenos started operations in the region 10 years ago, beginning with Mexico. “Now we have over 35 clients in Mexico. We also have a cloud offering in Mexico where we are running Software as a Service (SaaS). We are hosting that in the Microsoft cloud and two institutions are connected to it already.”

After the success of its Mexico launch, Temenos targeted the large banks in some other countries.

“Over the last five to six years we have been quite successful. We now have clients in several countries in the region including Argentina, Chile, Ecuador, Peru, Colombia, Nicaragua, Honduras, Panama, with the exception of Paraguay and Uruguay.

“In fact Panama has been a stable and progressive economy for years. Many people have moved to Panama from Venezuela, due to the disruption there, so it has been a business friendly environment,” he informs.

Admittedly, Temenos faced a “critical time” having gotten involved in several complex systems implementations in the region, but the vendor is in a “good position” again to evaluate its growth strategy and prospects.

“While implementing an international core, you have to adapt to the local needs and we’ve done that. Banks in the region are realising that they need to upgrade their technology and use a world-class solution to remain competitive in the global markets. That’s what we offer.

“We have a good reputation in the region and we have partners across countries that are helping us deliver the technology implementations. Most of our partners speak the local languages and know the peculiarities of the markets,” he adds.

In terms of adopting cloud technology in the region, O’Reilly says there are differences between the reality and the perception of cloud. “The perception is that the regulators are strict and banks want data storage to be done within the country. There are, indeed, some fears about accessing data. Also, regulators need to be assured that they can access the data whenever they want.”

Smaller banks in the region are more relaxed about the adoption of cloud, and simply want “low cost of operations, efficiency, and safety of their data”, according to O’Reilly.

“We have to go through the fears but as the market becomes more educated on the whole, most banks will understand that there is no issue with data centres and clouds,” he adds.

Temenos does face competition in Latin America from some global technology vendors. “We come across SAP and Oracle’s FLEXCUBE. Inofsys has also made inroads in this region.” Competition also comes from local suppliers. “A few have come up with okay systems, but they mainly compete on price as they have managed to cover low cost structures.

“We, on the other hand, would rather not have a deal if it comes to compromising heavily on costs. We have been able to maintain our value and that’s been key to our success,” he adds.

To succeed as a technology vendor in Latin America, both a local presence and the right attitude are needed. O’Reilly says Temenos sets itself apart by being a big company that is “still small enough to care for each client”.

According to O’Reilly, success in the region for Temenos will also come from deals with multinational banks.

“These banks like our technology because after implementing it in one country, they can deploy it in other countries at the fraction of the cost. It becomes a huge economy of scale for them.

“We signed a deal with Banesco in Venezuela and now we are implementing systems for them in four countries. We signed a deal with Grupo Financiero Ficohsa (GFF) in Honduras. Ficohsa is growing and in 2014 it agreed to acquire Citi’s business in Nicaragua. That will help us grow,” he explains.

Looking ahead, O’Reilly says the market looks fertile and it is a matter of “selling right, selling well, and targeting the right prospects”. “We’ve shown flexibility, local presence, size, and the track record. It is all pointing towards a good few growth years in the region for Temenos.”

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