eMerge on T24

An emerging sector
The microfinance industry has huge growth potential and there are real opportunities for those with the right systems in place. Microfinance is entering a new era. Small-scale community lending programmes are consolidating and maturing into sophisticated financial operations. Established banks are recognising the value of microfinance in extending their reach to new customers an estimated billion of whom are currently unbanked. In a climate of rapid change and increasing competition, the successful players have to be forward-thinking and equipped with durable and agile technical solutions for any eventuality. With experience of more than 10 years working in mass retail and micro-banking around the world, Temenos is uniquely placed to anticipate the needs of the sector. Using this knowledge, and dedicated investment, we have created a banking solution specifically for the microfinance sector eMerge on T24. eMerge is a set of programmes added to T24 to expand its functionality in microfinance and SME lending. eMerge on T24 is a robust and scalable solution which allows customers to start small, yet ready to grow exponentially as the business expands. To date, Temenos has implemented eMerge on T24 for more than 60 clients many with multiple sites in 50 countries.

Consolidate or be consolidated
The microfinance sector is changing quickly. Smaller microfinance institutions (MFIs) are developing from social lending programmes into sophisticated banking operations. Simultaneously, international banks are recognising microfinances potential in their mainstream businesses providing services to largely unbanked communities, and ethical alternatives to investors. In this increasingly competitive environment, larger players are swallowing up the smaller operations. The message is clear - become one of the consolidators or be consolidated out of the market.

The challenge of growth

Regardless of whether growth occurs organically, as a result of consolidation, or through acquisition, financial institutions must be ready to support their businesses as they expand and deepen. To gain competitive advantage, these organisations must use technology effectively. Temenos knows micro-banks need solutions that can grow as they increase their customer base. Equally, they need a system capable of delivering new, tailored products to customers quickly, through the channels that they want.

The drive for efficiency

In the past, smaller, community-based MFIs developed their own systems or used a combination of portfolio tracking and accounting packages. The products developed for MFIs tended to be localised and did not offer the functional and technical depth of a mainstream retail banking system. As MFIs have grown, consolidated and evolved into banks, their systems have become unable to provide the functionality or information that is required for their new business challenges. Larger, new players in the sector also face some specific challenges. Most create subsidiaries or special purpose vehicles to enter the market, and their legacy systems are not typically wellequipped for the nature of microfinance lending that is, high-volume, short-term and low-value products, deployed in scenarios that differ from the mainstream financial industry. The result is that many financial institutions in this sector continue to use tools which are manually labour-intensive and not set up to deliver adequate management information. Those willing to invest in excellent technical solutions can turn the current situation to their advantage. Tools that improve operational efficiency and provide quality business intelligence give financial institutions the best chance of survival.

Gaining control
The sector as a whole is becoming increasingly regulated. In addition to fulfilling the reporting requirements of shareholders, micro-banks are required to comply with central bank regulations and to the international regulatory framework in certain cases. There is a real need, generally, to improve control and security to ensure proper steps are taken and clear audit trails are maintained. Many MFIs do not have the procedural framework in place in order to comply with regulation. The implementation of effective core banking software provides such a framework by increasing transparency and so improving the quality of management of the business. This in turn encourages more private investors to the sector.

Meeting requirements globally and locally

As MFIs consolidate and expand, their systems must accommodate various countries, cultures and regulatory regimes. MFIs need a solution that can handle several languages and time zones on a multi-entity basis, while also accommodating separate accounting standards for each branch, business unit or country. They require systems with the capacity to be developed in order to support requirements in the longer term.

A professional approach
Consumers in this sector are increasingly discerning. There is an opportunity for banks to gain commercial advantage by demonstrating consistently high levels of customer service.

Staying ahead in a changing industry

Temenos is the leader in banking software solutions. Our world-class package, Temenos T24 is a technically advanced, front-to-back core banking solution, used by over 600 financial institutions around the world. Being fully scalable and parameterised, T24 can be configured to suit the needs of any banking institution. Above all, as a released-based solution, it is constantly evolving, continually enriched by T24s global client base. The result is that the systems growth is driven by some of the largest, most progressive banks in their respective fields. Through our experience of more than 60 microfinance implementations, we have developed eMerge on T24, a Model Bank which is adapted to the operational and processing requirements of financial institutions in this sector. eMerge is a set of code and routines that is added to the core code of T24 while preserving T24s core features such as straight through processing and real time reporting. eMerge on T24 offers full banking functionality on an open, modern system. It is a tight retail model with low implementation costs, which allows access to all of the developments that are fed back into the T24 core system.

Broad functionality
eMerge on T24 has been specifically configured to perform most functions required by microfinance institutions in an out-of-the-box solution. The core system handles: Customer, product and parameter settings, including charges and fees Limits and collateral structure Information and reporting output Payment formatting and maintenance. Additional facilities specially built for community banking are: Peer- or relationship-based lending methodologies Local reference fields for gender, age and district of residence, all of which are cross validated during the loan application process to ensure applicants meet the criteria of the product Exception-based payments and batch-payment processing Contract- and account-based lending Flat interest methodology A rich Customer Information File for individuals and other non-individual entities, such as groups, businesses or trusts Full suite of best practice standard portfolio reports Investor funds tracking to report on fund management Workflow processing and cash-flow reporting A product designer the bank can use to create new products Report and enquiry tools Comprehensive charges and interest set up Management of loans written off Potential customer status to store track enquiries and applications until they become customers Multi-language system and multi-company capability 24x7 processing and electronic delivery channels. As banking requirements develop, additional T24 modules can be enabled, allowing the bank to expand into new business lines, such as trade finance, wholesale banking, foreign exchange dealing or any other specialised market segment.
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Growing with the sector

Temenos systems are built for massive scalability. Designed to enable n-tier architecture, eMerge on T24 allows clients to add servers according to how their business grows. eMerge can accommodate unlimited accounts, customers and transactions. The advantage of this is clear microfinance institutions or banks entering the market can start small, with the knowledge that they can expand at any time.

Beat competitors to the market

Temenos architecture gives banks the ability to create new products rapidly. Because eMerge on T24 is configurable via parameters, financial institutions can customise new products internally and deploy them instantly without the need for development or testing of new code. Not only is this inexpensive, the ability to get products to market quickly translates to real competitive edge in a rapidly changing sector.

A complete solution
With eMerge on T24, there is no need to invest in additional systems. It is a comprehensive front-toback processing solution featuring real-time connection between all parts of the system, spanning transaction capture, verification, delivery, position management and risk control. Integral to the solution is the visibility of the back end in all procedures. Workflow is automated with straight-through-processing, although exceptions can be set. The connection of the front and back end reduces the need for manual processes and minimises the risk of error.

Independent and future-proof

As an open standards solution, eMerge on T24 can be implemented on virtually any platform or database. Although the product is soft configurable, it supports XML by default and can be connected to standard industry middleware solutions if required. Core functionality can be delivered via standard messaging to a variety of channels - branch, call centre, telephone and internet banking. The inbuilt security management system regulates access appropriately. eMerge on T24 does not require a specific IT set up, nor does it tie the client to a single vendor. This keeps the clients options open now and in the future.

Easy to implement, manage and use

Implementation of eMerge on T24 is straightforward. As the system is preconfigured, typical implementation takes only 250 working days, spread over four or five months. In addition, users require minimal training which reduces operational downtime. As such, eMerge on T24 is effective for setting up a new operation quickly and ideal for rapid market entry. With one technology and one environment to support, it is easy for the bank to maintain control over its system. Clients are not dependent on Temenos resources for day-to-day running and maintenance.

Focus on the customer

eMerge on T24 is customer-centric rather than product-centric. Customer information held within the core system enables a bank to categorise its customers by a wide range of demographics for segmentation, analysis and reporting. Users have a single view of customers, across all accounts and incorporating all transactions. Bank representatives can access detailed, up-to-date information when dealing with customers who, in turn, benefit from a more consistent and coherent service. It also enables banks to cross-sell additional products to existing clients and to attract new business.

Global and local capabilities

Intermediary organisations and mainstream international banks entering the microfinance sector need to set up and maintain operations in very different countries and jurisdictions, across several time zones, allowing separate accounting standards for each office or country. Their challenge is to meet local requirements while also having the ability to centralise and consolidate. eMerge on T24 provides support for 24x7 global operations. It is an international solution that operates across multiple jurisdictions and allows many countries and companies to be supported from a single installation. The solution offers: The ability for multiple companies to operate from the same installation while allowing independent close-of-business processing for each it offers separate accounting standards for each office and each country Global consolidation of financial information for example, by agent, branch, bank, region and country A single installation of eMerge on T24, allowing all processing to be centralised Secure user access, meaning information can be shared and/or restricted across different departments, offices and country operations Full support for 24x7 global operations with a single, real-time view of information this is important for networked institutions and banks running operations across different regulatory jurisdictions and times zones ASP and facilities management enabled, capable of spanning global business requirements for centralised processing and systems administration The system is multi-language, currently available in English, French, Spanish and Portuguese, and can be translated easily for local operators and customers. To date it has been translated into languages as diverse as Vietnamese, Farsi and Russian.

Establishing best practice

With the challenge of regulation and the need to establish best practice, eMerge on T24 offers a distinct advantage in its strong procedural framework and that is completely compliant. Implementing eMerge on T24 can lay the foundation for good corporate governance and transparency by fulfilling regulatory reporting requirements and maintaining a clear audit trail. The product has benefited from our many years producing industry-leading software, with banking best practice processes built into the standard routines and workflow. eMerge on T24 is a business-ready solution. It is fully compliant with regulatory regimes, puts best practice at the heart of operations and gives complete control over the business from day one.
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Core functionality, with room to expand

eMerge on T24 offers broad functionality as standard. These modules are included: AC Account AZ All in one account CO Collateral DC Data capture DE Delivery EB Core FT Funds transfer FX Forex IC Interest and charges LD Loans and deposits LI Limits LM Loans and money market OF Open financial server OO Open interactive financial service PD Past due PM Position management RE Reporting ST Standard tables TT Teller jBASE Enterprise Edition Further Temenos T24 eMerge options are available over and above the basic package. IM PC MC NR Image management Post closing accounting Multi-company Nostro reconciliation eMerge on T24 can support additional modules either at installation, or in the future. Management information Process workflow Syndicated loans Money market Futures & options Securities Swaps Trade finance Confirmation matching ATM interface Reuters interface Swift interface ARC CRM ARC internet banking T-Risk

Deployment

TEMENOS eMerge is typically deployed in a distributed environment on a Windows NT Local Area Network (LAN). As communications infrastructure improve, users are able to take advantage of TEMENOS eMerge's core capabilities and link branches through fixed lines or remote facilities. Combinations of host based wide area networks, distributed data with report consolidation and Internet batch file transfer and email enables networks of organisations to grow in an organic way around their clients' requirements, wherever they may be located.

Grow with the market

Emerging retail markets differ from mature financial markets. Their profile, customer base and challenges are different. Their technical solutions, too, must be different. The microfinance market has huge growth potential. Competitive businesses will have systems that take advantage of this. Solutions must be easy to implement and maintain. They must be able to support volume growth, product and service diversification and status and organisational change. eMerge on T24 is a proven system, designed to meet the unique needs of this market. It allows participants to start small, but sets no realistic upper boundary. It offers rapid implementation and open-ended functionality, in a constantly evolving, release-based solution. Above all, it can be configured for new business as the organisation grows. For these and many other reasons, over the course of the last decade, eMerge on T24 has been selected by organisations looking to increase their capability in the increasingly competitive microfinance sector.

TEMENOS eMerge TM is a registered trademark of the TEMENOS GROUP and referred to as eMerge on T24. TEMENOS T24TM is a registered trademark of the TEMENOS GROUP and revered to as T24.

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