Thought Machine is the leading global provider of banking technology to the financial services industry, Tier 1 banks, and digital challengers worldwide. Its primary goal is to modernise bank infrastructure, migrate banks away from expensive, energy-inefficient on-premise hardware, and enable them to run their services from modern cloud infrastructure, thereby reducing energy usage and emissions and fostering innovation in the industry.
Thought Machine’s approach to ESG considers its own activities and ability to enable its clients to meet their ESG ambitions.
Environment
Thought Machine’s cutting-edge approach to running technology in the cloud has a noticeable impact on the environment and enable banks to meet their sustainability objectives by moving away from costly, energy-inefficient in-house solutions.
Thought Machine is conscious of its carbon footprint and actively adheres to environmentally sustainable practices. Thought Machine’s own energy consumption is minimal and consists of the following main areas:
- Headquarters and office: Thought Machine’s offices have undergone and passed green audits with flying colours. An ISO 14001-certified supplier manages Thought Machine’s headquarters, and the company follows green building practices to ensure a sound environmental management system.
- Office supplier: as a cloud-based company, Thought Machine aspires to be fully digitised, minimising the use of office supplies to reduce its waste. Where Thought Machine needs to purchase them, it prioritises durable products with a longer lifespan from suppliers with environmentally sustainable policies.
- IT equipment: Thought Machine considers the lifespan and energy ratings of IT equipment, applying energy-saving settings where possible. IT equipment is always disposed of responsibly.
- Non-IT electrical equipment: Thought Machine purchases very few items that are considered non-IT electrical equipment. Examples include fridges, shredders, etc. Thought Machine always considers the equipment's energy ratings when purchasing it.
- Marketing: Thought Machine prioritises quality and ethical sourcing over pricing when purchasing this merchandise.
- Business travel: Thought Machine recommends that staff travel only after other feasible alternatives (e.g., video conferencing) have been considered; as a technology company, most external meetings are conducted via videoconferencing.
Please see Appendix 1 (below) for Thought Machine’s emissions. Thought Machine aims to be net-zero by 2050.
Thought Machine accelerates banks' digital transformation plans by building cloud-native core banking technology to replace the expensive, unreliable, and inefficient legacy systems commonplace in retail banking. This enables banks to be more sustainable.
On-premise legacy systems are sized for peak demand, and many resources are idle during a bank's daily operations. Banks use electricity, physical space, and resources for systems that run, on average, at less than 20% utilisation. Banks can dramatically cut costs and environmental impact by running their systems on the cloud.
The environmental benefits of moving to the cloud are undisputed, as it will lead to an optimised utilisation rate, reduced greenhouse emissions and efficient electricity usage. Cloud infrastructure providers have a large pool of customers, so they can smooth out peaks and operate at higher utilisation levels. Amazon Web Services (AWS) estimates that its customers use 77% fewer servers, 84% less power, and a 28% cleaner power mix than if they were running in-house data centres. Google Cloud Platform (GCP) is moving towards its goal of operating on 24/7 carbon-free energy by 2030.
Social
Thought Machine’s social considerations include its relationship with employees, including their rights, benefits, diversity, and inclusion; clients, partners, and suppliers; and society, which consists of the local, national and global community.
Employees
Thought Machine’s employees have workplace rights and benefits that exceed the minimum required by regulation and legislation. They can also develop themselves through access to mandatory and voluntary training.
Thought Machine believes in fair pay; therefore, offers fair working hours, salaries that exceed the living wage, paid internships and pay benefits that far exceed the statutory minimum, including maternity and paternity leave, sick pay, compassionate leave, etc. Additional benefits include:
- Company-funded private medical insurance
- Cycle to work and electric car schemes
- Clubs and societies, team lunches, snacks and drinks, etc.
Thought Machine believes in the benefits of this and has taken measures to enhance diversity and inclusion through working groups and reporting. This includes:
- Reporting the company’s gender pay gap.
- Three inclusivity groups focused on ethnicity, LGBTQ+ and gender diversity.
- Partnering with university societies for underrepresented groups.
- Partnering with schools in the local community to offer CV writing workshops, interview practice and career in fintech days.
Client, partner and suppliers
Thought Machine has policies to ensure its relationships with clients, partners, and suppliers benefit society and do not negatively impact it. It performs due diligence and risk assessments before engaging with partners and suppliers to ensure compliance with environmental standards, child labour laws, health and safety regulations, modern slavery laws, money laundering regulations, and anti-bribery legislation.
Community
Thought Machine believes it is essential to contribute to the local community, including the communities and countries in which it has a physical presence, as well as the global and engineering community through paid volunteer days, community group projects and engineering events (e.g. hackathons).
We match charitable donations for company charity events and donate deprecated IT assets, including laptops and monitors, to local charities.
Reducing consumer disruption
Legacy systems in financial services are primarily responsible for the disruption consumers face in their day-to-day banking experiences. Banks cannot efficiently serve their customers with outdated technology, and there is, on average, an unplanned outage within retail banks daily. In addition, mortgage payments are known to be billed incorrectly, ATMs malfunction, and customer accounts are inaccessible due to planned and unplanned outages.
These legacy IT failures have caused unacceptable harm to consumers. Thought Machine’s technology alleviates these issues by providing modern core banking technology that is highly available, resilient, and scalable. This negates many of the problems of on-premise IT hardware. Thought Machine’s technology ensures that banks’ customers have access to their accounts, the funds and services they need, and more flexibility with their financial products.
By modernising banks' cores, consumers benefit from increased financial security, service availability, and flexibility in their financial lives—especially in times of crisis or high demand.
Banking the unbanked
Banks spend considerable amounts of money on outdated legacy systems. Thought Machine’s technology will bring down the cost of technology, lowering the cost of banking and allowing banks to open accounts for the unbanked.
Innovation in banking
In today’s world, many people no longer have one source of income, a job for life, one bank account, etc. Banks and financial services companies need to reflect these changes to society.
Thought Machine allows banks to create innovative new products tailored for their customers. Traditional core banking platforms limit the services a bank can offer its clients, which are limited to product lines (loans, mortgages, current accounts). Modern cores allow banks to provide services across product lines or merge products. Further, the company’s technology enables banks to readily offer a suite of innovative and competitive products, including mortgage, loan, BNPL, time deposit and shariah savings accounts, to their customers, making for a more pro-consumer choice and competitive market.
Governance
Thought Machine’s governance framework includes its values and codes of conduct, risk management, supply chain management, data protection, tax strategy, and legal compliance.
Thought Management has a robust governance structure, including a Board with non-executive directors forming the majority members and an independent Chairman; Board Committees (Audit, Remuneration and Risk); an Executive Committee; and various operational committees.
Code of conduct
The company’s Code of Conduct has sections on culture: respecting each other, workplace safety, conflicts of interest, gifts and hospitality; protecting and maintaining confidentiality; preventing bribery and corruption; protecting assets; compliance with legal regulatory and contractual obligations; fraud; whistle-blowing; protecting the company’s reputation; and financial and social responsibility.
Risk management
Thought Machine manages its risks through a dedicated risk function. Periodic risk assessments are undertaken, risks are identified and quantified, and risk treatment plans are maintained. Risks are escalated and governed by operational committees, the Executive Committee, and the Board.
Health and safety
Thought Machine takes its health and safety responsibilities seriously. Although the health and safety risks related to business activities are low, the company’s facilities team ensures that all reasonable precautions are taken to protect the health and safety of employees. Health and safety training is provided during induction, the company maintains a health and safety policy, and fire wardens and first aiders are trained in all offices.
Supply chain management
Thought Machine has a robust approach to third-party risk management (TPRM), which includes performing due diligence before engaging third parties and on an ongoing basis, depending on the supplier's risk.
Suppliers who do not align with ESG Principles for Third Parties, Suppliers, and Partners may be promptly off-boarded. In addition, Thought Machine has a legal and moral duty to report any illegal behaviour its suppliers engage to relevant authorities.
Data protection
Data protection is embedded in company culture—it is part of the leadership and organisational structure and is continuously monitored and appropriately reported. A team of data protection specialists ensures that employees know their responsibilities and rights from day one through comprehensive compliance annual training and updates.
Thought Machine has systems—industry-leading technical, organisational, and physical security measures—in place to ensure compliance with the individual rights of all stakeholders while upholding the core principles of processing, such as lawfulness, fairness, transparency, and accountability.
Data protection
Thought Machine’s products comply with the UK and EU GDPR regulations and have been mapped and designed to adapt to clients' various local data protection regimes. Beyond regulatory compliance, they are built with the principles of Data Protection by design and by default, resulting in security controls and architecture that consider the protection and safety of clients' customers.
Thought Machine only chooses suppliers that can meet this commitment. Choosing Thought Machine’s cloud-native products means adding robust security and protection to clients' banking systems. They benefit from Thought Machine’s controls and those of the company’s cloud partners, so they are safer from threats and can stand up to regulatory scrutiny. Thought Machine’s banking clients trust the company as their partners in upholding trust and safety in the financial services industry.
Horizon scanning
Thought Machine is abreast of regulatory developments in critical areas spanning banking, outsourcing and third-party relationships, data protection and security, and cloud computing. Thought Machine continuously monitors how it develops and tailors its offerings. Thought Machine’s clients consider it a trusted and capable partner in navigating novel regulations and complying with their legal and regulatory obligations.
Appendix 1: Greenhouse Gas Emissions
Thought Machine calculates its emissions using the key requirements of the Greenhouse Gas Protocol and the UK Government's conversion factors.
The table below represents the activities in the year to 31 December 2023.
For any ESG enquiries, please contact Thought Machine’s Director of Risk and Compliance, Nitesh Palana, at nitesh@thoughtmachine.net