Swiss banking software company Temenos has launched a buy now, pay later (BNPL) banking service on the Temenos Banking Cloud.
Temenos BNPL, which claims to be the first AI-driven BNPL banking service, is a “fully flexible, pay-as-you-go solution” that enables banks to introduce BNPL at scale, without the need for new IT infrastructure.
Its new BNPL service is combined with patented Explainable AI (XAI), which provides a framework for humans to understand the type of predictions made by machine learning.
By embedding XAI, Temenos said its clients are able to pre-approve loan applications or propose variable instalments in real-time based on pre-determined criteria, including soft and hard credit scoring, with transparency into how decisions are made.
In turn, this helps banks and fintechs to “lend ethically”, by providing insight into recommended payment schedules during the application process, and ensuring consumers can afford the repayments.
Max Chuard, CEO of Temenos, said: “In an extremely competitive market, financial services providers need to evaluate new business models to drive revenue. As the strategic technology provider for over 3,000 banks worldwide, we are committed to empowering our clients to pioneer and adopt those new, profitable business models.”
According to Temenos, consultancy McKinsey has estimated that fintechs diverted up to $10 billion in annual revenues away from banks over the past 24 months with BNPL offerings.
Chuard added: “Buy now, pay later has shown the industry that we can come up with new solutions to old problems. It has challenged the way we think about customer engagement, acquisition and retention.
“We are very excited to launch this new solution to enable our clients to offer alternative financing that is fast, seamless, and scalable.”