Temenos (SIX: TEMN) has recently made a deal with Tech Mahindra (NSE: TECHM), a well-known global technology consulting and digital solutions provider from India. The agreement requires Tech Mahindra to offer core banking solutions on Temenos SaaS tailored specifically for Electronic Money Institutions (EMIs) in the UK and European markets.

EMIs are financial companies that hold and distribute digital currency. In the UK, the Financial Conduct Authority (FCA) regulates EMIs. They offer services similar to traditional banks but cannot lend or pay interest to account holders.

Using Temenos’ composable banking capabilities and Tech Mahindra services, EMIs will benefit from quicker time to market, reduced operational expenses, a scalable architecture, and access to over 100 chosen Temenos Exchange fintech partners, enabling them to provide customised services to their customers.

The new offering on Temenos SaaS is designed to provide EMIs with a cost-effective, scalable, and secure banking platform. This platform will improve their ability to swiftly launch operations with pre-configured, composable banking capabilities tailored to the EMI sector.

The service allows for dynamic scaling, cost-effectiveness, and sustainability. It also offers the flexibility to integrate additional banking functionalities as EMIs progress, thereby supporting their growth and future-proofing their operations.

The SaaS offering has been designed to act as a catalyst for financial innovation. It can also be used by start-up/challenger banks, smaller established banks, and building societies as a cost-effective yet functionally rich and resilient foundation for rapidly developing and deploying financial products and services.

The service is currently being implemented at an EMI in the UK and initially aims to serve the UK market, home to approximately 250 EMIs. There are plans to expand its coverage to the European Union, which has just under 600 EMIs and an estimated 35 billion Euros in client funds.