The private banking landscape in Asia Pacific is unlike any other – each country throws up distinct opportunities and challenges that players need to adapt to. Temenos’ head of APAC, Martin Frick, who was appointed in the role only in April 2014, tells Meghna Mukerjee how the software vendor plans to stay relevant in the competitive region.
It is still early days on the job for Martin Frick as the head of APAC for Switzerland-headquartered software vendor, Temenos. However, Frick is only too familiar with the banking landscape in Asia Pacific – particularly the wealth management space.
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Having previously been the managing director of Asia Pacific for Avaloq, Frick has a wholesome overview of what the lenders in the region – particularly private banks – require, and this gives him an upper hand when it comes to strategising ahead for Temenos’ journey in APAC.
Temenos, according to Frick, has had somewhat of a ‘branding issue’ in Asia – something he is looking to resolve by focusing on three key priorities on the sales and marketing side.
One of the priorities includes improved execution of Temenos’ multi-products strategy, as well as highlighting and selling the value of the solutions better.
"I look at Temenos’ revenue in Asia and the majority is still coming from T24. I think we have huge potential with other products in the architecture.
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By GlobalData"We see a lot of demand in the edgeConnect area. Also our Anti Money Laundering (AML) solution is particularly doing well in developing countries, as those markets have more issues around security and fraud. These are all products we need to better make use of," says Frick.
Temenos does have a series of products, apart from the popular core banking platform T24 as well as AML and edgeConnect solutions, that aptly cater to the private banks and wealth managers.
One such product is the Triple’A Plus front and middle office private wealth management solution that combines advanced portfolio management and highly secure client data management functionality in a single browser-based application.
The vendor also has WealthManager – an integrated platform that aims to simplify the daily work of professionals managing and advising clients in the mass-affluent to High Net Worth segments. There are also products such as Temenos DataSource, Temenos Insight Business Intelligence.
"Selling itself and its core value to private banks is not something Temenos has been very good at in the last few years. We need to raise our credibility and positioning in that space," he admits candidly.
Another one of Frick’s priorities is to have a vertical strategy around wealth management across countries, which entails having appropriate plans in place to make sure the right investments are being made in countries such as China and Australia.
"Most people don’t really understand Asia – they think you can come up with a strategy and it will work across the region, but it does not. I have introduced a strategic framework – it is a matrix that gives you a clear understanding of what markets you want to position which products in, and how.
"The level of maturity across markets in Asia is completely different. I don’t plan to sell Triple’A in Bangladesh. There is no point. We would like to cover geographies and plan what we need to do with which product in which country," says Frick.
Another priority for Frick, unsurprisingly in Asia, centres on maximising the "opportunity of wealth management in the region".
To achieve this successfully, Frick plans to put in place "strategic partnerships" so that the Temenos brand can gain more speed and traction. In focus for Frick is better account management, enhanced client relationships as well as improved cross selling on both the service and product side.
"Partnerships are always opportunistic – but if you really want to reach the next level in partnerships, as a company, the partnership should be centred on a joint business plan.
"For instance, we create a business plan with investments from both sides, with clear goals and KPIs, with trigger points of whether we should proceed or not. We at Temenos are trying to achieve this and there are talks of building potential partners around this strategy," he says.
Unlike products from software providers such as Avaloq that are essentially front-to-back solutions, Temenos is differentiating itself through its packaged software offerings.
"If you decide to run your private bank independently, a front-to-back solution is a good choice. The problem with that is that most of the players in Asia suffer from a very bad cost-to-income-ratio. If you then decide to use a front-to-back solution, the cost-to-income-ratio doesn’t get better.
"With Temenos, you have the opportunity to leverage on existing systems, and it helps with the cost-to-income-ratios. I’m a strong believer that if you change your software, you can save a lot of money as a bank," he says.
Banks in Asia are constantly grappling with changing regulatory demands, and Frick believes going for packaged software will also give lenders competitive advantages as banks will have "someone looking after the regulatory changes" for them.
Frick believes there is huge potential in the mass affluent market in APAC. "I see wealth and priority banking divisions developing in markets like Malaysia. Even if you look at markets like China and Indonesia – the population is growing. Not all of them are big enough to take money outside of the country," he says.
Alongside other obvious segments such as priority banking clients, there are also the Ultra High Net Worth Individuals (UHNWIs) in APAC, with a high growth rate, that Temenos plans to target – but there is, indeed, fierce competition for their attention.
However, taking competitors head-on and biting into the same market share is the wrong approach, according to Frick. "We are looking to bring in new clients – obviously if you do this at a good pace then you will gain market share. I think we should really focus on what we’re good at and highlight what we can bring to the market. The rest will happen."
Temenos approximately had 50 clients across Asia, as at the end of May 2014. Frick says he was "surprised" at the number of good clients Temenos already had on board when he joined the vendor. Going forward he sees himself as someone who can bring to the table "discussions and value positioning of the business".
"The priority is to have happy clients. We can improve a lot. Happy clients will automatically lead to more revenue," he says.
