Temenos’ Kalliopi Chioti on why banks need the cloud in the race to net-zero


Banks have accelerated cloud implementation throughout the pandemic to help lower costs and transform customer experiences. While the pandemic required proactive solutions to immediate challenges, another continuing and pressing challenge is the race to net zero. Banks have realised that the cloud can provide part of the answer. The role of the cloud in net-zero commitments The leading public cloud hyperscalers estimate that businesses using their infrastructure generate around 95% less carbon emissions. This is due to the optimisation of application development and performance and significant efficiency gains from hyperscale data centres. The case is clear. Banks that have set themselves bold and ambitious targets to reach net-zero have little chance of getting there in time if they don't make the shift to the cloud. Cutting carbon emissions At Temenos, we recognize how central ESG has become to banks' strategies. Our cloud-native SaaS offering, the Temenos Banking Cloud, incorporates ESG as a service to help banks gain carbon insights from using our products and to track their progress towards reaching their sustainability targets. It also runs on public cloud infrastructure, and the hyperscalers we partner with have all made strong commitments to sustainability goals and using 100% renewable energy. All these energy efficiencies are passed onto our clients. An example is Flowe, a cloud-enabled digital bank built on green principles and powered by the Temenos. Within the first six months of launching in 2020 it onboarded 600,000 customers and is growing at twice the rate of its nearest competitor. Supported by Temenos Banking Cloud, Flowe can grow sustainably, passing on benefits to customers for a cleaner, greener planet and a better society. Flowe is the first bank in Italy to be certified as a B-Corp and is also carbon-neutral.


“Banks that have set themselves bold and ambitious targets to reach net-zero have little chance of getting there in time if they don't make the shift to the cloud”
Kalliopi Chioti

Understand the green consumer Consumers are not bystanders to the climate debate, and they are increasingly matching their money with their values and voting with their wallets. No more so than millennials, who are more inclined to judge banks by their ESG record and commitment to sustainable banking. This is the generation in line to receive $68 trillion in inherited wealth by 2030. Banks can't afford to ignore them. Today, a bank's green credentials matter just as much as their financial services. Fall short on the former, and the latter may not even matter. Large banks are well aware of their customer demands, as this is quickly penetrating into banking culture, moving beyond simple statements to net-zero emissions pledges and green deposits. We have seen this with the Net-Zero Banking Alliance, a global organisation comprised of 43 banks from 23 countries, all committing to having net-zero emissions by 2050 or sooner. Empowering green customers This relationship between the bank and the customer is symbiotic. Institutions are now developing financial services that empower customers to take control of their own carbon footprint. By enabling individual insights through cloud banking, banks can build apps that give their customers tools to measure and manage the carbon impact of their spending, so that they can make more mindful spending decisions; reward them for their contributions toward sustainability; give them options to offset or reduce the carbon generated from a credit card payment; make it easier for them to invest in sustainable funds, and to switch to less carbon-intensive energy providers. Walking the talk One of the big challenges for banks is knowing who to trust with their net-zero ambitions and who is pursuing greenwashing tactics. Thankfully, there is much more transparency than ever. Reputable global indices such as The Dow Jones Sustainability Index (DJSI) rank the leading companies' ESG performance. More than ever, the banking technology sector has a critical role in driving change in the banking industry and leading by example. Our mission towards a modern banking technology transformation is critical to providing our clients with the products to enable them to transition to a low carbon global economy. So, in addition to incorporating climate change as a risk into our operations, we are equally committed to helping our clients transform into smart, sustainable organisations. One bank that is making this happen is EQ Bank. It is the first bank in Canada to be fully hosted in the cloud. EQ recently announced it had become carbon neutral. Their President and CEO Andrew Moor noted that 'enriching the lives of Canadians can and should be accomplished simultaneously alongside a low carbon transition," citing digital banking capabilities and energy-efficient, cloud-based architecture as key drivers of this alignment. And this is the ultimate point. Innovation and addressing environmental challenges go hand in hand. More than that, digitisation is reliant on sustainability, and vice-versa.


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