Nib Bank Sides with Temenos for CORE Banking
Nib Bank Sides with Temenos for CORE Banking
The Swiss-based software developer and vendor, Temenos Group AG, appears to be marching undeterred towards dominating the market of the Ethiopian banking industry. It now has Nib International Bank (NIB), one of the last remaining banks not interfaced with the central bank’s National Payment System (NPS), as its latest client, the fourth bank to select Temenos for its installation of upgraded centralised, online, real-time, electronic (CORE) banking solutions.
The Bank signed a contract with the Swiss IT solution provider on Tuesday, January 25, 2012. The contract is worth 32.4 million Br, sources disclosed to Fortune.
“The state-of-the-art solution will help us to be more efficient, as we will be able to deliver service on time, managing branch operations simultaneously,” Amerga Kassa, president of NIB, told Fortune.
His management team negotiated with Temenos for one and a half years before they signed a deal with Keith Stonell, regional director and management board member of Temenos, at Sheraton Hotel.
A year ago, six international software vendors were shortlisted, including Delta Software Solutions, Infrasoft Tech Ltd, Oracle Corporation, Neptune Software Plc, and Meiosis. All but Meiosis submitted their financial and technical proposals.
A team of six in the bids evolution committee and an additional five in the steering committee, led by the president of the bank, had visited South Africa and Mozambique to review how the solutions function. Temenos, which claims to have invested 100 million dollars in developing software using over 2,000 software developers, has solutions operating in these countries.
Temenos Group bagged a deal with the nation’s largest bank, the Commercial Bank of Ethiopia (CBE), while Bank of Abyssinia (BoA) and the state-owned Construction & Business Bank (CBB) followed, becoming its clients.
Paid close to 70 million Br by the CBE, Temenos will apply the same module and system to NIB, said an executive of a company providing IT solutions to the banking sector.
“The difference comes from the size of branches to be wired and the volume of data migration needed on a daily basis,” this executive told Fortune. “Obviously, the CBE has a far greater number of branches and a much larger volume of data than any [other] bank in the country.”
Founded in 1993 and operating 56 offices worldwide, providing service for over 1,000 financial institutions in more than 125 countries, Temenos’s latest deal with NIB will help it in its quest to have a competitive edge against its rival, Oracle Flex. A US IT vendor, Oracle Flex already has four banks in its hold, including Dashen, Zemen, United, and Abay banks.
Following behind in rank is Infrasoft, an Indian IT company with outstanding contracts with Oromia International Bank (OIB), Cooperative Bank of Oromia (CBO), and Bunna International Bank (BIB). Three other vendors are installing the systems for other banks: MiSys International for Awash; Delta to Lion International, and Omni Software for Wegagen.
There are 13 banks that have acquired such banking solutions, while four have been on the lookout ever since National Bank of Ethiopia (NBE) made it mandatory in June 2011.
The solutions are integrated for the clearing and settlement of interbank electronic payments, installed by Motran and Ernst & Young, for 2.2 million dollars. All banks need CORE banking solutions to be able to interface with the central bank. Using the NPS, both high value and low volume transactions are cleared and settled immediately.
“Although banks have started to install CORE banking systems late, it is good that they (managers at NIB) have begun to upgrade their system, even if it is after the initial deadline,” Getahun Nana, vice governor of NBE, said at the signing of the contract between NIB and Temenos.
NIB’s deal with Temenos makes it the 14th bank to have selected a vendor for upgrading its existing software, which could not interface with the NPS. The old software, called Star Bank, by Eta-Info Tech, a Dubai-based software company, has been in use since 2006.
Installing Temenos’s T24 solutions, NIB will interconnect all of its 51 branches to its head office, interfacing with the central bank’s system. Currently, 32 branches in the capital and in Southern and Oromia regional states have been connected to NIB’s head office, Yoseph Kibret, head of the Management Information Systems Department, said.
The system will also enable the bank to give mobile, Internet, and card banking services, according to Stonell.
“Temenos’s solutions will be upgraded every time there is an offering of more services,” he said.
The president of NIB, a bank established with a paid-up capital of 27.6 million Br, registering a 246.4 million Br profit after tax in 2010/11, sees the latest procurement as a new landmark in the history of the bank, since its establishment in 1999.
Acquiring these solutions will strengthen NIB’s position in a consortium of three banks, established in July 2010. Premier Switch Solutions (PSS) was created together with United and Awash banks, each putting up an initial contribution of 30 million Br.
PSS, a system under installation by S2M of Morocco, was sought to provide debit card, point of sale (POS), and automated teller machine (ATM) services. The three banks will share the same ATMs, along with mobile and Internet payment system services.
Both parties cemented the deal recently, although the announcement was made last week, industry sources told Fortune.
The job has already begun with a local partner, United Systems Integrators (USI) Plc, hiring 20 local staff and hoping to double their number in three months, according to Michael Shebelle, general manager of USI.
“We intend to deploy as much local staff as we possibly can,” Michael told Fortune.
