ZURICH (Reuters) – Julius Baer has chosen software provider Temenos to replace its aging core banking system in Switzerland’s domestic market, four people familiar with the matter said, part of the bank’s quest to update its critical infrastructure amid growing regulatory demands.
CEO Stefan Bollinger announced in June that the bank had “created a new digital business transformation function and launched a project to modernize its IT infrastructure in Switzerland, without revealing the name of the provider.”
“It needs to be done, and I want to make it a substantial part of the current strategic cycle,” Bollinger said, referring to the cycle ending in 2028 and citing more regulatory requirements as one of the drivers.
The bank is in the process of aligning its Swiss systems with Temenos’ T24 product that Julius Baer already uses in Singapore and Luxembourg, two of the sources said.
Julius Baer is also adding a Temenos wealth management interface for relationship managers and high-net-worth clients, according to one of the sources.
The bank declined to comment on the choice of Temenos and individual systems. Temenos declined to comment.
Temenos today typically sells new contracts using a subscription model, where cash flows are spread over a five-year period, according to Reto Huber, an analyst at financial consultancy Research Partners.
Switzerland introduced a rule in 2016 requiring banks to operate an IT system to monitor transactions, requiring increased digitization of customer data, according to financial markets regulator FINMA.
Julius Baer, who is still the subject of FINMA enforcement proceedings over the losses of the bankrupt real estate group Signa, said there was “no connection between the IT upgrade and the ongoing assessment.”
“The IT infrastructure program in Switzerland is not about operational risk, but rather an initiative to gain strategic flexibilityin pursuit of the bank’s future ambitions,” he said.
(Reporting by Marleen Kalesebier in Gdansk, Ariane Luthhi and Oliver Hirt in Zurich and Jesus aguado in Madrid, editing by Alexandra Hudson)
