From the Blogosphere
SAP Solutions Further Help Banking Industry Gear for Clear Future
Addresses the needs of banking customers in today’s market
By: Eric Kimberling
Dec. 7, 2009 10:00 AM
Further extending its modular solutions tailored for the banking industry, SAP AG has announced innovations to its industry-specific banking software that supports banks’ business processes from the front to the back office. The new release of banking services from SAP directly addresses the needs of banking customers in today’s market. In the face of amplified risk exposure and strict cost-cutting measures, banks must rely ever more on their IT systems to easily, cost-effectively and better assess and manage risk while accelerating product and service introductions to gain and maintain the edge on their competition. Innovations to the integrated banking services were designed to help banks gain greater transparency across their organization, more sharply focus on providing value-added customer offers, meet the constantly changing demands of regulatory compliance and manage new growth opportunities. Meeting its product road map commitment made in 2008, SAP confirms that customers are already ramping up their process on the new banking services from SAP, which were released to select banks worldwide in September 2009.
The newest improvements to the banking services from SAP delivering transactional and analytical banking solutions tap continuous innovations from close collaboration in more than 1,000 banking customer projects, as well as SAP’s participation in industry groups and standards bodies, such as Banking Industry Architecture Network (BIAN). Offering scalable solutions based on a flexible platform, SAP is committed to helping banks take a low-risk path to lower operational costs and improve customer service.
Innovations for Banks, Designed by Banks
The comprehensive portfolio of modular banking solutions from SAP is based on service-oriented architecture (SOA) to enable banks to extend their investments in existing systems for better operational clarity. The current portfolio includes enterprise management solutions and transactional banking solutions, as well as risk management and compliance solutions. Including enterprise services built-in specific to the banking industry, the SAP solution enables banks to significantly reduce the amount of time spent on daily tasks, as well as gives banks the opportunity to reuse the services for other channels, such as mobile, terminals and direct banking. With the newest improvements, SAP delivers significant innovations in new functionality and key features in the area of integration, service enablement and platform openness, including the following:
Achieving Operational Excellence With Transactional Banking Solutions from SAP
Operational and Organizational Collaboration for Improved Customer Service
Updated functionality in the SAP® Deposits Management application provides a stronger integration between a bank’s operations and its sales functions. This enhanced functionality offers sales operations a better view into customers’ deposit accounts, enabling sales representatives to offer products and services that best meets the individualized needs of their customers at the point of sale, giving the bank an edge on its competition. The new functionality helps heads of operations contain cost and increase efficiency when deposit account volume increases.
Improved Loans Management
Utilizing innovations from SAP® Business Suite 7 software, the SAP® Loans Management application has been upgraded to offer end-to-end automation of all loan-relevant processes from origination to contract. This enhancement will help reduce a bank’s time to market for new products and facilitate more efficient processing of high-volume business, moving a bank one step ahead of its competition. The SOA-enabled capabilities of SAP Business Suite offer banks the opportunity to make their IT systems more modular and open the door for running IT in the cloud, using services from multiple vendors on-demand as well as on-premise. In addition, banks are able to use and re-use semantically rich business content, making it faster and easier to innovate business processes. SAP Business Suite customers have access to more than 2,800 enterprise services for easy consumption. These services can be composed into consistent and stable business processes that help reduce project costs for implementing “own practices” that operate in both heterogeneous and hybrid IT landscapes.
Flexible Collateral Management for Changing Demands
Solutions that are agile and flexible can create one point of truth for a bank when it comes to managing its collaterals. This is particularly important in today’s market, where financial institutions are facing stricter regulations and mounting competition. Banks’ collateral management practices have become too cumbersome to meet new demands. The SAP® Collateral Management application has undergone significant innovations to address the many issues banks are encountering in the changing market. Such improvements build connections among business units at a bank to help them enforce collateral norms; for example, the lending segment head can then get consolidated information on exposures, the collateral asset manager can cost-effectively manage collateral for the entire organization and the credit risk manager can oversee and help enforce collateral risk policy.
Controlling Risk Through Financial Excellence With SAP Solutions
Better Meeting Basel II Requirements
Enhancements to the SAP® Basel II application will help banks meet the Basel II requirements for risk exposure and capital adequacy, as well as implement new supervisory review and disclosure processes. The solution integrates internal and external credit risk management on a single platform and supports all Basel II approaches for credit risk calculation — from the standardized approach to the advanced internal ratings-based (IRB) approach. Such enhancements will give banks a secure foundation to help ensure regulatory compliance for the safety of their end customers.
Pricing Package for Managing Credit Risk
The SAP® Credit Risk Portfolio Management application is a new pricing package as part of the SAP for Banking portfolio of solutions. The new application enables banks to quantify credit risk on a portfolio level that includes views to actively manage their credit risk. The new pricing package will provide banks foresight to manage their risk in order to protect themselves from economic pitfalls. The application addresses the economic capital approach to credit risk and complements the SAP Basel II application to cover regulatory capital perspective.
Integrated Financial and Management Accounting
With integrated accounting solutions from SAP, a bank’s chief financial officer can confidently deliver timely and accurate financial reports that are automatically reconciled with internal management reporting. Solution innovations include the ability for banks to integrate financial and management accounting processes for reconciling their reporting across all divisions. The solutions provide banks with a full sub-ledger functionality for financial instruments, which includes the valuation and posting of financial instruments in accordance with International Financial Reporting Standards (IFRS). In collaboration with the SAP® Accounting for Financial Instruments application, SAP Profitability Management application has been enhanced to provide banks access to comprehensive profitability information on a granular basis. This enables banks to fulfill external and internal accounting and reporting requirements.
Banks Have Clear Path to Help Master Financial Crisis
The new release of banking services from SAP was designed and executed based on the needs of customers today and tomorrow. Faced with the urgency to change, banks must attain clarity and transparency by using a portfolio of IT solutions that help them close the gap between strategy and execution, thereby optimizing the performance of their business and network. The SAP solutions provide the required insight for improved performance, efficiency for optimized operations and flexibility to quickly adapt to changing circumstances.
“The new release of banking services is just the latest example of SAP’s ongoing commitment and investment to provide the leading banking platform available in the industry that enables our customers to truly innovate and transform their business and IT models,” said Don Trotta, senior vice president and global head of financial services industry, SAP AG. “Working closely with our customers, we have been able to incorporate a rich new set of features and functions in the release that will greatly help them address some of the most critical demands they are facing now – greater efficiency, flexibility to change, and better insight into their business and customers. This is why we have seen such momentum in the marketplace for SAP banking solutions over the past few years. With this new release, we see that momentum growing and accelerating as more banks understand what it can do for them.”
Service-Oriented Architecture Road Map for Banks
SAP believes that through tight collaboration with the market for the definition and adoption of semantic industry standards on SOA, banks globally will be able to better respond to changing customer needs and reduce risk and cost of re-engineering legacy systems towards a more flexible operational environment. Based on broad consensus from within the banking industry, this will enable faster, more efficient strategic and operational changes in banks while helping banks to address the key market imperative to drive cost reductions through greater efficiency and organizational flexibility.
Playing an active role in the independent association Banking Industry Architecture Network (BIAN) , SAP will provide banks the enterprise services that best fit their needs, because the services are built and designed by peer banks. Pre-defined services will allow SAP customers in the banking industry to quickly build and deliver new products and services to their customers, without having to invest heavily in integration costs. As a committed member of BIAN, SAP is adapting the standards and methodologies developed by the association into its product road map of banking solutions to help its customers transition their business operations into a more flexible and agile IT environment.
“ZKB is convinced that standardization in the financial industry will also include the software development and operations,” said Dieter Bühler, head of IT-Architecture, LAT, Zürcher Kantonalbank. “As a leading Swiss bank, ZKB will be part of this standardization process and proactively make a contribution to it.”
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