Temenos Company controls about 25% out of the Egyptian banking sector, by providing its technological solutions for nine out of 42 banks. According to MarketPlace Director at Temenos Aaron Phethean, information technology has a good chance to make use of the investment opportunities in the banking sector locally. He revealed that the company contracted with the Arab African International Bank to provide it with technological solutions for the next 10 years. The company will launch technological platforms to make use of all the banking applications, whether those provided by the company or by competitors. This will support the sector's growth and help start-up projects that provide innovative applications to the banking sector to market their products. To begin with, what are the services your company offers? Temenos is a company specialised in providing technological solutions for banking services. It is listed in the Swiss Stock Exchange under the name TEMN. We cooperate with banks and banking institutions to help them with their technological solutions to keep on their lead amid the continuing market changes. We provide our services to more than 500m bank clients. It was proven that Temenos's clients make the highest profits, compared to their counterparts. Between 2008 and 2012, they obtained an average return of 32% on assets values and 42% more return on shares and a cost/return rate, 8.1% less than banks that use other technological systems. We have a lot technological solutions but our major product is T24. It is the major programme of a lot of large banks around the world, where it is used by more than 700 banks around the globe. That is in addition to the 2,000 banks around the world using the applications and software the company offers in the fields of internet banking or mobile baking, besides a lot of other technological solutions for the banking sector. Who are your most prominent clients in the Middle East and Egypt? We offer our services to more than 38 out of the 50 largest banks in the world, while the company offers its technological services in Egypt to nine out of 42 banks operating in the Egyptian market. The company controls about 25% of the market of banking services technology in Egypt, which asserts the clients' confidence in the solutions the company provides. Moreover, we provide our technological solutions for more than 75 banks in the Middle East. According to the specialised reports, the company is between number one and number two globally in the last 14 years in terms of the volume of the contracts on the technological solutions of the banking sector. What is the effect of the economic instability on your business in the Egyptian market? The economic circumstances Egypt is going through did not affect developing the technological services of the banking sector. Over the past three years, the company acquired all the projects proposed by the banks to change their major technological system. In 2013, a contract was signed with the Arab Investment Bank to provide it with the technological solutions of Temenos, and in 2014, we contracted on providing technological services to the Housing and Development Bank. This year, we contracted with the Arab African International Bank to provide it with technological services for the next 10 years. What growth opportunities do you see in the Egyptian market? The banking sector is one of the strongest sectors of the economy. It is always seeking advanced services and new technologies for its customers. Hence, the economic condition had no effect on banks developing their services and did not affect our business in the Egyptian market. The banking sector in Egypt also has great potential for growth, especially since only 20% of Egyptians have bank accounts – meaning there is a chance to attract 80% of Egyptians to use banks. This adds the burden on banks to provide technological services to attract new customers. Are there intentions to provide technological services to the national post service, especially since it has a large customer base? Egypt's post service offers simple financial services to its customers but still has a broad base of customers in Egypt, up to 20m customers. It may need technological services. We are ready to provide assistance at any time but so far there have been no negotiations for that. How can technology solutions help the banking sector? We can offer technological services that increase the speed of transactions. The faster transactions are, the more they get, boosting profits growth. For example, one of our clients is a big bank that offers services to about 50m customers. We are able to operate 12,000 transactions per second using our solutions. We also assisted Vodafone Kenya in the provision of micro-credit services to individuals through mobile applications. Over a million clients used the service in only three months. Was your business affected by the dollar crisis in Egypt? No, the dollar crisis did not affect our business. We also have not felt any effect on any of our banking partners for whom we provide services. We have not noticed any negative effects on their development budgets. We are offering solutions to nine banks in Egypt and we recently contracted with one of them this year. Are there negotiations with other banks to provide technological solutions in Egypt? Yes, there are negotiations with a number of banks to provide technological services to them but we cannot yet disclose who they are before reaching final agreements and signing contracts with them, especially since there are many banks that need to change their service mainframe. What services do you think Egyptian banks will be interested in during the upcoming period? We believe e-banking services will be of interest to Egyptian banks in the upcoming period since the average age of clients in the Egyptian market is about 27 years old, which makes the Egyptian customer requirements more sophisticated and technology-friendly. E-commerce is growing dramatically in Egypt, does that reflect on the growth of your business in Egypt? Yes, e-commerce is quickly growing in the Egyptian market and banks endeavour to provide clients with electronic payment methods. Hence, they will need sophisticated technological services. This is where Temenos comes in – to provide the latest technological solutions for banking services. The more e-commerce grows, the more banks will seek advanced technological solutions. We have the expertise to provide technological solutions to such services, whereby we cooperate with Amazon and Uber. Is there cooperation with mobile service operators in Egypt to provide money transfer services via mobile? We cooperate with banks to provide many applications, including payment applications via mobile, which in turn offer payments via mobile services to their operators' partners. We do not cooperate directly with operators though. What are the challenges you see in the Egyptian market? One of the challenges is that banks having no obligations to provide technological banking services. If the Central Bank of Egypt (CBE) obliges banks to provide technological solutions to all their services or to develop specific standards and technological services to be provided, it will contribute significantly to the growth of the sector. Another challenge is the limited number of banks' clients because it also represents a very good investment potential if banks can attract more clients. Among the challenges are also banks not relying on cloud computing services and lack of awareness of their importance and mechanisms of security. What new services will the company launch in the upcoming period? We are currently working on the launch of an electronic platform called MarketPlace. It is very similar to an open market for software. The platform will present technological applications for financial services. It will help emerging companies and entrepreneurs to display their applications and financial applications, even if they compete with us.
