Feature
How BIL and Temenos completely transformed a bank
BIL, the oldest bank in Luxembourg, has been working with Temenos to modernise core banking and payments. Anika Sidhika writes.
Banque International Luxembourg (BIL), one of the largest universal banks in Luxembourg, has embarked on a significant transformation journey to enhance its services and meet the evolving demands of its diverse clientele. With the help of Temenos, BIL has evolved to meet the demands of the modern world and the modern client.
Established in 1856, BIL has grown to serve over 200,000 clients, in Luxembourg and abroad, a testament to its deep-rooted presence in the country’s financial landscape.
With about 2,000 employees, BIL caters to retail and wealthy clients, corporate and institutional clients.
Serge Munten, head of transformation at BIL, has spent 13-14 years at BIL and currently heads business transformation. Speaking to PBI, he underscores the bank’s historical importance and the need for modernisation.
“BIL is a special institution for Luxembourg. Given our size in a small country, we handle a substantial portion of the market, especially in payments and security solutions. This was a key challenge for our transformation, something that Temenos had to adapt to,” he says.
Problems to be solved
The motivation behind BIL’s transformation programme stemmed from an urgent need to overhaul its IT infrastructure.
Serge explains: “We decided to completely review our IT landscape. Our legacy core banking system was a platform that was over 30 years old. There were instances where we had to turn down potential clients because we couldn’t handle the volumes they proposed, which was a shame.”
The bank’s complex, custom-made system had become increasingly difficult to manage.
Serge elaborates: “Our system was old and complex. It was difficult to find experts who understood how it all worked. We needed to move to something new. We decided to change our core banking system, upgrade our asset management, our dealing room tooling, implement Salesforce. It was quite an extensive overhaul.”
Transformation begins
BIL partnered with Temenos, implementing the full suite of Temenos core banking solutions.
He describes the scope of this integration: “We implemented core banking, wealth management, financial markets, payments, treasury, lending, and reconciliations—all in one system. We also integrated TPH, the payments hub, even though it was in its early stages. This close collaboration with Temenos allowed us to co-create a solution that fits our diverse client base.”
Since going live on October 2nd, BIL has already seen significant benefits from the new system.
“The system is very stable, especially during end-of-day processes, which was a challenge with our previous setup. We now have a full 24/7 solution, eliminating the 15-minute daily downtime we previously experienced. This is crucial in an era of instant payments,” Serge notes.
The transition to Temenos’ platform marks a milestone for BIL, replacing its legacy core banking system with a modern, API-driven solution. This move is expected to allow BIL to introduce new products swiftly and offer personalised services driven by data insights. Additionally, the bank anticipates significant cost savings and performance improvements.
Moreover, BIL completed the complex transformation project in collaboration with Temenos delivery partner LTIMindtree and a dedicated team from Temenos.
The seamless migration to the new platform positions BIL to integrate and automate various banking capabilities, such as cash accounts, deposits, lending, securities, and treasury services.
Additionally, the new platform enables faster product creation and easier pricing adjustments, ensuring BIL remains competitive and compliant with regulatory standards.
“Setting pricing conditions in the system is much easier now, and we can rely on the broader Temenos community for regulatory compliance,” he adds.
As of now, BIL is concluding its hyper care phase. Serge explains: “When you go live, you have to prioritise certain implementations and leave others for later. We had a hyper care phase to address urgent issues post-implementation, and we have now transitioned to a care phase, moving gradually towards business as usual. This approach ensures we allocate resources effectively and maintain stability, especially under the strict supervision of the European Central Bank.”
Problems to be solved
The motivation behind BIL’s transformation programme stemmed from an urgent need to overhaul its IT infrastructure.
Serge explains: “We decided to completely review our IT landscape. Our legacy core banking system was a platform that was over 30 years old. There were instances where we had to turn down potential clients because we couldn’t handle the volumes they proposed, which was a shame.”
The bank’s complex, custom-made system had become increasingly difficult to manage.
Serge elaborates: “Our system was old and complex. It was difficult to find experts who understood how it all worked. We needed to move to something new. We decided to change our core banking system, upgrade our asset management, our dealing room tooling, implement Salesforce. It was quite an extensive overhaul.”
Transformation begins
BIL partnered with Temenos, implementing the full suite of Temenos core banking solutions.
He describes the scope of this integration: “We implemented core banking, wealth management, financial markets, payments, treasury, lending, and reconciliations—all in one system. We also integrated TPH, the payments hub, even though it was in its early stages. This close collaboration with Temenos allowed us to co-create a solution that fits our diverse client base.”
Since going live on October 2nd, BIL has already seen significant benefits from the new system.
“The system is very stable, especially during end-of-day processes, which was a challenge with our previous setup. We now have a full 24/7 solution, eliminating the 15-minute daily downtime we previously experienced. This is crucial in an era of instant payments,” Serge notes.
The transition to Temenos’ platform marks a milestone for BIL, replacing its legacy core banking system with a modern, API-driven solution. This move is expected to allow BIL to introduce new products swiftly and offer personalised services driven by data insights. Additionally, the bank anticipates significant cost savings and performance improvements.
Moreover, BIL completed the complex transformation project in collaboration with Temenos delivery partner LTIMindtree and a dedicated team from Temenos.
The seamless migration to the new platform positions BIL to integrate and automate various banking capabilities, such as cash accounts, deposits, lending, securities, and treasury services.
Additionally, the new platform enables faster product creation and easier pricing adjustments, ensuring BIL remains competitive and compliant with regulatory standards.
“Setting pricing conditions in the system is much easier now, and we can rely on the broader Temenos community for regulatory compliance,” he adds.
As of now, BIL is concluding its hyper care phase. Serge explains: “When you go live, you have to prioritise certain implementations and leave others for later. We had a hyper care phase to address urgent issues post-implementation, and we have now transitioned to a care phase, moving gradually towards business as usual. This approach ensures we allocate resources effectively and maintain stability, especially under the strict supervision of the European Central Bank.”
BIL and Temenos building an international financial hub
Luxembourg’s unique position as a financial hub amplifies the significance of BIL’s transformation.
The country’s political and economic stability, coupled with a collaborative environment between political and economic actors, creates a conducive atmosphere for banking.
“The political and economic actors in Luxembourg work very closely. This close-knit collaboration facilitates swift legislative and regulatory responses to business needs,” Serge describes.
Luxembourg’s appeal extends to international clients, with BIL serving 130 nationalities. He highlights the bank’s expertise in handling complex, cross-border wealth management scenarios: “In Luxembourg, we have developed the skills to manage wealth for clients with assets in multiple countries. This international expertise is a key differentiator. For example, we can help a Spanish client with assets in the US and Scandinavia structure their wealth to ensure their children can inherit seamlessly.”
Despite challenges, Luxembourg has maintained a reputation for trustworthiness and confidentiality in banking. Serge asserts: “Even with regulatory changes, we’ve managed to preserve the discreet and trustworthy service that clients expect. It’s all about ensuring client privacy and trust.”
Luxembourg’s financial sector thrives on innovation and international cooperation.
As Serge points out: “We are the second largest player in the world for fund management, just behind the US, with around 5.6 trillion euros in funds. This is a result of the pragmatic and collaborative approach between political actors and financial institutions. The development of legislation for alternative investment funds is a good example of this cooperation.”
Furthermore, the diversity of Luxembourg’s financial services caters to international clients’ needs effectively.
“We serve clients from 130 different nationalities. In Luxembourg, a private banker will understand international markets and wealth planning across various jurisdictions. For instance, a Belgian private banker might excel in the domestic market but may struggle with international structuring. In Luxembourg, we have that international expertise,” he says.
BIL’s transformation journey with Temenos not only modernises its operations but also reinforces Luxembourg’s standing as a global banking hub.
The successful implementation of the Temenos core banking platform marks a significant milestone in BIL’s continuous evolution, ensuring it remains at the forefront of banking innovation.
The head of transformation concludes: “We are now equipped to handle high volumes, create products faster, and stay relevant with regulatory changes. This transformation is about staying competitive and providing our clients with the best possible service.
“The immediate benefits are clear, but the long-term advantages will be even more impactful as we continue to innovate and adapt to market needs.”
