SAP Fund_ing Manage_ment

Asset Based Funding withSAP Funding ManagementSeptember 2011

2011 SAP AG. All rights reserved. 2

SAP Funding Management

1. Business Area

2. Solution Overview

3. System Demo

4. Reference Customer

Business Area


SAP for BankingSolution Portfolio Overview

Customer Communication Channels

Enterprise Resource Planning

Customer Relationship Management

Transactional Banking

Analytical Banking

Integration Infrastructure

voice IVR e-mail fax SMS web mail

Marketing Sales Service

Customer Information Management

Master Contract Management

Deposits Payments Collaterals

Loans Leasing Funding

User Interface

InformationDiscovery & Delivery

Information Management

Business Process Management SOA Management

Connectivity & Integration

Governance, Risk & ComplianceFinancial Performance Management

Accounting Profitability Asset Liability ManagementCredit Risk

Management

Human Resources

Procurement

Cost Controlling

General Ledger

Corporate Services


The Money Cycle of Financing and Refinancing

Exceeding competition will become harder

Optimizing your Funding Business

Get effective funding for the finance products offered in order to achieve better interest rates.

Achieve transparency with mature funding processes.

Offer new collateralized products.

Investors demand secure refinancing products.

Sustainable partnership with investors.

Recent market turmoil


In times of recent market turmoils a Funding Strategy is required

Lack of funding will harm the market growth

Exceeding competition becomes more difficult

Impact on Consumer Market

Financial Service Providers cannot respond effectively to crashed investor market which demands more collateralized funding deals.

Processes are mainly manual or single-tool driven and not integrated into accounting

No transparency of funding gaps Infrastructure resistant to implementing new funding

products

Lack of Funding Strategy

Securitisation and Syndication are no longer secure ways to raise money from investors

More secure deals must be provided to investors, for example: Covered Bonds

Financial Crisis


Mature your Refinancing Business with a central SAP Funding Solution

Efficient Funding Business will result in abilities to grow the consumer market and in a reliable and sustainable investor market.

Sustainable Partnership to your Investors

Benefits Managing all assets and transactions in

one system. Prebuilt business functionality for Covered

Bonds and other Funding Deals Active portfolio management will lead to

an aligned strategy of financing and refinancing

Transparency of all funding deals and assets

Have a look at the success story

Benefits Be attractive for investors by

providing more secure deals like Covered Bonds to get higher margins

Be a flexible partner by offering the required high quality asset portfolios

Attractive Offers for your CustomersBenefits Ability to offer attractive

interest rates More Money to invest in

consumer products. SAP Lending Scenario SAP Leasing Scenario

Funding Solution

Solution Overview


Asset Based Funding with SAP Funding Management

Asset Warehouse

Portfolio Management (Pooling)Transaction ProcessingIntegration with Accounting and Reporting


Structuring the Asset Based Funding Business Scenarios

Origination

Servicing

F

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R

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f

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Structuring

Processing

Trading

Collateralization

AccountingReporting

Retail Wholesale

Integrated Process

Syndicated Lending

Loans

Leasing

Fundinga pool of assets

Securitisation, Covered Bond, Pool Syndication, Asset Based Deals

Pooling Process

Focus of SAP standard solution Proof of Concept needed.


Treasury

Aligning Stakeholders to achieve Collateralization of your Funding Business

Effective Collateralization requires alignment between several stakeholders with differing objectives

Portfolio Management Transaction Processing

How do I increase funding and mitigate risks without harming the investor relationship?

How do I improve my funding processes and achieve transparency?

How do I keep control of all the postings resulting from complex funding deals?

Funding growth Risk transfer Investor satisfaction

Structuring of transactions Replenishment Funding gaps New funding deals

Mainly automatic postings

Chief Financial Officer Secure my Investments

Where do I get the highest margin at minimum risk?

Secure Deals Sustainable Partner

CFO

Posting of Cash Flows

Investor (external)Accounting


Funding Business Process

The funding is divided into two phases with certain processes

StructuringA funding program with funding transactions will be set up and assets will be allocated. At the end the transaction will be closed (fixed) for processing.

Processingall events and cash flows received from the pooled contracts (assets) will be monitored and handled.

The processes of the phases will be demonstrated on the following slides.

Structuring ProcessingDefinition Funding Program

Structuringof Transaction

(Pooling)Closing of Transaction Monitoring

Management of Transaction Reporting

Payment Distribution


SAP Funding ManagementProcess and Functional View

Funding purpose

Definition of master data e.g. currency, maturity, volume

Funding ground with funding categories

Assignment of investor templates

Configuration of allowed funding types

Reservation of assets for funding program

Volume of transaction, fixing date, conditions of transaction

Definition of funding type

Definition of pool (selection criteria)

Pool sampling Modelling of

cash flows Definition of

payment distribution rules for investors

Definition of monitoring rules

Creation of investor contracts

Sale / Transfer of assets / risk

Monitoring of cash flow income

Definition and controlling of cash flows to investors

Monitoring of credit events (asset side business operation) if relevant for transaction

Monitoring of the pool

Pool maintenance

Replenishment Asset buyback Capital

adjustment Loss allocation Late recoveries Transaction

termination Closing of

transaction Administration

of revolving transactions / FPGs

Change of payment distribution

Definition alternative payee

Transaction independent reports (e.g. all non-funded assets of a category)

Periodic reports (eg. Net present value calculation)

Reporting of asset-side business operations

Structuring ProcessingDefinition Funding Program

Structuringof Transaction

Closing of Transaction

PaymentDistribution Monitoring

Management of Transaction

Maintenance of Investor Contracts

Reporting


Application Landscape

SAP Funding Management 2.0 is an Add-On on top of NetWeaver 7.0 (same a SAP ERP)

SAP ERP 6.0 (SAP CML) is enhanced with functionality for investor contracts (EHP0) and provided with an interface to SAP Funding Management (EHP4)

An Investor Contract (Loans on SAP ERP 6.0) is not required for all funding processes

SAP Funding Management is open for 3rd party asset systems.

FundingFDM

LeasingCRM, LAE

LoansCML

LoansCML (ERP2005)

AccountingFI AR (ERP 2005)

PartnerFS BP (ERP 2005)

Loan/Leasingnon SAP

WarehouseSAP BI

InvestorInvestor Contract

Cash flows

Funding ProgramTransactionAssetsLeasing Contract

Conditions

Loan Contract

Master DataCash flowsEvents


SAPFunding Management

Demo Application Landscape

SAP Loans Management focuses on the loan servicing. After origination of a loan, the contract (master data, cash flows, loan events) is automatically visible in the funding programs if it isqualified for sale.

SAP Funding Management processes the loan pools and the funding transactions within the investors programs and serves as a funding workplace for all funding purposes.

Investor

loan servicing

SAPLoans Management

SAPAccounting and Reporting

investorservicing

Borrower

Transaction

Transaction

qualified loan poolavailable for sale

Program

payments

Demo

Originator

DemoLink:

Recorded Demo

Remark Frank Zeidler:Please check link in presentationmode before you present. If you haveproblems to access please [email protected] and/[email protected]


Pool Cash Flow Note Cash Flow

Reference Customer


Deutsche Leasing AG - Asset Finance


Deutsche Leasing AG - Asset Finance

Mrd. = Bn


Effective Funding at Deutsche Leasing AG with SAP Funding Management

SAP Funding Management provides us with a solution that simplifies our posting and funding transactionmanagement processes. At the same time, we can connect individual solutions for new business areas with our funding solution.

Volker SchumacherHead of the Treasury Division, Deutsche Leasing AG

SAP Funding Management for

~ 100.000 loan contracts~ 160.000 leasing contracts

Over 3.500 transaction pools under management.

Over 4 Bn. volume of pooled assets


Asset Based Funding with SAP Funding Management

o Reduction of IT integration complexity and costso Prebuilt business functionality for funding deals

o Flexibility to create new deals with investorso Transparency of all refinancing processes

o Production proven by reference customer

Thank You!

Contact Information

[email protected] Product [email protected] Solution Management [email protected] Product Management TXS

SAP Funding ManagementSolution OverviewSeptember 2011


2011 SAP AG. Alle Rechte vorbehalten.

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SAP Fund_ing Manage_ment

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