Capital Ethiopia Newspaper

World Class Banking

Mr. Keith Stonell is the regional director and member of the management board of TEMENOS, a banking software company. He was recently in Addis Ababa to sign a core banking solution systems installation contract with Nib International Bank. He spoke with Capital’s Elias Gebreselassie.

Capital: Let me start with your background and that of your company.
Keith Stonell:
I am on the management board of TEMENOS, responsible for the company’s business in Europe and Africa. The company has five thousand employees, over a thousand clients, our turnover is around half a billion dollars, we are a quoted company on the Swiss stock exchange, we’re global, our clients are spread across the world, we’ve been working in Africa for 15 years and in Ethiopia for the last three years.

Capital: What does your technology do for banking?
We bring a lot of things to Ethiopia. We’re providing connectivity in to the new Real Time Gross Settlement System (RTGS) payment system and Automated Clearing House (ACH) connectivity to the Ethiopian Commodity Exchange (ECX).  We’re allowing the banks to launch new services, things like SMS alert when there is activity on their accounts, Internet banking, mobile banking. The banks will be able to take a lot of new products to their customers and the flexibility of our software will allow us to launch new saving products, new deposits, lending schemes. So it will give the bank a tool to create new products to offer to the market. We offer a lot that NIB will be able to offer to its clients, and at the same time we bring in a lot of software that helps to control the bank and manage capital. We bring in software for risk management, to manage and control anti-money laundering for international transactions; we are bringing in a business intelligence data warehouse so that the bank can get data on its clients and its branches. So it’s a complete infrastructure for the bank to grow and expand its business both in Ethiopia and hopefully internationally.
Capital: Is this the first time you had business contracts in Ethiopia or East Africa?
We have been operating in Africa for over 10 years; we signed contracts with four other Ethiopian banks over the last two years. We’re working with Commercial Bank of Ethiopia, Bank of Abyssinia, Construction and Business Bank (CBB) and Development Bank of Ethiopia (DBE). So NIB is  a private bank that’s now working with us. We’ve been working here for nearly two years so, we’ve built an Ethiopian model with a lot of the standard interfaces and connectivity built in and a number of specific features for the local market such as money transfers and Foreign Exchange (FX) control. We’ve built in Ethiopia a platform that NIB will be able to take advantage of.
Capital: What would you say are the unique features TEMENOS’ core banking solution has for the Ethiopian market and how it’s different or better than other technology software for banks?
Right. We offer a complete banking suit for what we call universal banking. It’s for retail banking, for core banking, for international business like trade finance; it would allow a bank to compete internationally. So if Ethiopia was to open up and allow foreign banks, it means the local banks will have the platform and technology and they can compete. It will also allow Ethiopian banks to open up operations outside in other countries in Africa, or even say America. It’s an international technology that’s used by the market leaders globally, that’s now been deployed right here, so it means the local banks can be competitive, in terms of the services and the products they can offer to their clients.
Capital: What other projects do you have for Ethiopia and more broadly the East African region?
There are a lot of investments still in Africa. A number of private banks are through a tendering processes to bring in new systems to comply with NBE’S requirement that that they connect to the RTGS payment system. So we’re hoping to be able to win some of the contracts, work with other banks in Ethiopia and we’re seeing similar growth throughout the region particularly in the east and the Southern Africa Development Community (SADC) countries, there are a lot of new startups and banks are wanting to be able to take advantage of the Internet, mobile banking and they need to bring in new technologies to help them deliver that. And with a market leader globally we have all of this solution within one core suit, and we’re winning a lot of new clients each year.
Capital: With the ever changing technological landscape of the world do you have confidence that this new technology will be able to keep up with the demands of financial systems?
It requires a lot of financial strength, to be able to do that; so we’re seeing less and less competitors in the market because they need to invest more and more in the technology to keep pace with what is a fast changing industry.  We’re spending about USD 100 million every year on Research and Development (R & D) investing in our products, so it keeps pace with the most developed markets and we can offer that functionality to all of our clients globally. We need to invest a lot to keep pace and make sure that we can offer banks everything they need both in developing markets like Ethiopia as well as in mature markets like the Americas and Central Europe.
Capital: The banking sector in Ethiopia is still in its infancy and one of its problems is its information network system. What do you think would be appropriate to help the banking sector catch up with the rest of the world’s financial institutions?
Our technology would allow banks like NIB to catch up very quickly, we’re bringing in a system that has modern proven best processes and best practices built in that are being deployed by many of the world’s leading banks and local banks can take advantage of that; so it will allow them to compete in terms of products and services they offer very very quickly and very easily.  We’re having a lot of expansion in markets like Africa and Asia where the banks are investing to catch up very quickly.
Capital: What other services does your company give to the financial institutions and broadly to other companies?
We only work in the banking financial sector, so we’re very specialized and we offer consulting services around best practices, and advice for banks on how to run their businesses and their IT infrastructure. We provide software solutions and consulting services, but all around core banking transaction services, that’s our core disciplines and all of our investment is focused on to that core solution set. We are very tightly focused and that’s why we’re the market leader, that’s all we do. There are larger software companies like Oracle, say only five to 10 percent of their businesses is in the financial services. We’re 100 percent banking.
Capital: Recently there have been cyber thefts and card hacking in financial institutions…
Right. We have built in special third party software into our Internet and channel software that provides a high level of security and password control which the banks will be passing onto their customers. It includes regular password renewal and we’ve also built in into our software to screen and monitor customers and transactions against watch lists and blacklists of parties that you shouldn’t be transferring money to. We’ve built in that security into our system and that security has been signed and approved by many tier; one global banks like JP Morgan and Barclays, Credit Suisse.  So it’s very robust and tried and tested with some of the largest global international banks
Capital: Any final statement?
I think the last comment I want to really say is we’re committed both to Africa and Ethiopia, and we see a lot of potential to build our business here in Ethiopia. We’re working with other local companies and as I said we’re seeing a lot of new banks come into the market that would need new technologies to support their business. We’re committed in the long term to carry out working and expanding in Ethiopia.