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Transcript of Unlock Digital Banking with SAP Bank Analyzer & S4
Discovering the Digital Banking PlatformConnecting Digital Capabilities to SAP Banking ArchitectureGuillermo Salazar
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
1 | WHY IS DIGITAL CHANGING FSI NOW?
2 | HOW IS DIGITAL DIFFERENT?
3 | ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
4 | DELIVERING ON CUSTOMER EXPECTATIONS
5 | FINANCE & CAPITAL
COMPETING IN DIGITAL FSI
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
1. WHY IS DIGITAL CHANGING FSI NOW?
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
1970TECHNOLOGYCORE
1980TECHNOLOGYENABLEMENT
1990TECHNOLOGYCOLLABORATION
2000TECHNOLOGYENGAGEMENT
2010DIGITAL
2020EXPONENTIAL
Technology eras are characterized by exponential growth and connectivity.
MAINFRAMESDISTRIBUTED TERMINALSCORE COMPUTING
OFFICE COMPUTINGMINI-COMPUTERSWORD PROCESSINGSPREADSHEETSHOME COMPUTING
PC REVOLUTIONNETWORK COMPUTINGEMAILRELATIONAL DATABASESCLIENT-SERVER APPLICATIONS
INTERNET REVOLUTIONBROWSER WARSCUSTOMER ENGAGEMENTINTRANET APPLICATIONSBROADBAND
MOBILECLOUD COMPUTINGBIG DATA ANALYTICSSOCIAL MEDIAWEARABLES
ARTIFICIAL INTELLIGENCESENSINGHOME AUTOMATIONDIGITAL CARSDIGITAL MONEYQUANTUM COMPUTING3D PRINTING / MANUFACTURING
TECHNOLOGY CYCLESWHY IS DIGITAL CHANGING FSI NOW?
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
DISRUPTIVE INNOVATIONS ARE RESHAPING THE WAY FINANCIAL SERVICES ARE:STRUCTURED, PROVISIONED, AND CONSUMED
DISRUPTIVE INNOVATIONWHY IS DIGITAL CHANGING FSI NOW?
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
THE FUTURE OF FINANCIAL SERVICESHow disruptive innovations are reshaping the way financial services are structured, provisioned and consumed
• Innovation in financial services is deliberate and predictable; incumbent players are most likely to be attacked where the greatest sources of customer friction meet the largest profit pools
• Innovations are having the greatest impact where they employ business models that are platform based, data intensive, and capital light
• The most imminent effects of disruption will be felt in the banking sector; however, the greatest impactof disruption is likely to be felt in the insurance sector
• Incumbent institutions will employ parallel strategies; aggressively competing with new entrants while also leveraging legacy assets to provide those same new entrants with infrastructure and access to services
• Collaborationbetween regulators, incumbents and new entrants will be required to understand how new innovations alter the risk profile of the industry – positively and negatively
• Disruption will not be a one-time event, rather a continuous pressure to innovate that will shape customerbehaviours, business models, and the long-term structure of the financial services industry
Deloitte Digital Copyright © 2015 Deloitte Digital LLC. All rights reserved.
WHY IS DIGITAL CHANGING FSI NOW?
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
NEW NETWORKS
”The days of a centralized controlled world are over just like the centralized state-run economy of the Soviet Union is a thing of the past”
—Forrester
NEW NETWORKS ARCHITECTURESNEW NETWORKS ARCHITECTURES ORGANIZATIONS
WHY IS DIGITAL CHANGING FSI NOW?
NEW NETWORKS ARCHITECTURES ORGANIZATIONS BUSINESS MODELSNEW NETWORKS ARCHITECTURES ORGANIZATIONS BUSINESS MODELS NORMAL
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
2. DIGITAL CX BUYS DIFFERENTLY
9
Digital Sales need to replace lagging branch sales. Bank Sales
Digital Banking is about protecting revenues, and growing top line.
A projected 30% drop in branch sales need to be replaced by the digital channel.
Banks need to drive to a 50% Digital Sales mix by 2019.
HOW IS DIGITAL DIFFERENT?130
65
9063
125
9Non-
BranchSales
62
0
65
130
Total Sales 2014 Branch Sales 2019 (E)
Total Sales Required 2019
(E)
Sales Needed to Fill the Gap
2019
99∆ = (30)%
In Millions of Active New AccountsEstimated Bank Sales
Source: Source CEB Customer Experience Survey
10
69% of digital purchases are from constant seeking, not life events. Digitals are constantly seeking in their digital network, not the Bank’s network.
Constant Goal Seeking drives Digital Decision making130
65
30%41%
29%
28%
28%21%
10% 8%3% 2%
0%
50%
100%
Branch Oriented Digitally Oriented
Other
Dissastisfied with Another Product
Life Event Caused a Need for a New or Different Product
Responded to an Attractive Product Offering
Learned That I Have a Need for the Product
n = 2.343
Constant listening, engagement and messaging is required to acquire and retain digital buyers.
Digital purchases are shifting away from life events to influence based, or choice based on superior solution.
Digital buyers are changing products and institutions more frequently.
Personalized marketing & education drives digital product selection
Source: Source CEB Customer Experience Survey
HOW IS DIGITAL DIFFERENT?
Reasons for Financial Product Purchase
11
Digitals do not wait to be educated by the branch. 62% learned about the financial product outside their bank.
Networked Learning Process has changed
Balance the investment to optimize the customer experience, returns on technology investment & neutralize risk.
130
65
Bank Notices ChangeCustomer Learns Relevant Solution
Determines Best
Response
Opens Necessary Account
Customer Recognizes Need
Customer Chooses Bank
Branch Staff Clarify Need
Branch Staff
Propose Solution
Branch Staff Fulfill Solution
Bank Builds Brand Salience
Initiated Traditional Process
Suspected Digital Process
Actual Digital Process
Customer Recognizes Need
Customer Clarifies Need
Customer Evaluate
Alternatives
Customer Selects
Alternative
Branch Staff Affirm or Challenge
Branch Staff Fulfill
Solution
Bank Builds Brand Salience
Customer Bank Directed
Customer Controlled Bank Enabled
Customer Controlled Bank Reaction
Customer Learns Need
Cognitive Bias is masking the true behavior of Digital customers.
Digital buyers churn through products and institutions more frequently.
Personalized marketing & education drives digital product selection
HOW IS DIGITAL DIFFERENT?
12
With the smartphone as the ‘bank’; Full Wallet is not in the mind of the digital customer. The full wallet must be earned.
Digital Loyalty is fickle
Competition for the Digital Wallet will be fierce & frequent.
130
65
0.4x
1.0x
0
0.5
1
1 2
Customers Who Consolidate All Products at Primary Institution
n = 3.900
Source: Federal Reserve Board 2013 Survey of Consumer
0.7x
1.0x
0
0.5
1
1 2
Strong Likelihood to Purchase Next Product from Primary Institution
n = 4.957
Source: CEB 2013 Customer Experience Survey
Digital Customers
Non-Digital Customers
Full Wallet - is 60% less likely to consolidate all of their products.
Digital buyers – are less likely to buy from a single institution.
HOW IS DIGITAL DIFFERENT?
13
Helping digitals ‘stay on track’ drives 50% more loyalty. Digitals find value in managing and measuring the pivotal steps to goal attainment--but it must be integrated and permissioned.
Loyalty is an engaged experience
Traditional banking is an undifferentiated experience, Digitals seek value add that impacts their goals.
130
65
Loyalty
Day to Day tasks Pivotal Steps
Staying on Track Purchasing Products Financial Planning
Driving Action Reducing Complexity Providing Information
13% 24% 64%
Customer WeightingSource: CEB Customer Experience Survey
Continuous Engagement is rewarded with an increase in financial products and upsells
Automate important and unpleasant tasks that help digitals attain goals
HOW IS DIGITAL DIFFERENT?
14
Digital Banks can run short cycle test and learn cycles to (digitally) learn the kind of engagement customers seek.
Constantly Seek Opportunities to Engage
Goal attainment and behavior modification can be executed in high volume, small impact touches that can be measured
continuously in real-time.
130
65
Source: LP financial
Customer Product Use
Customer DefaultRisk
Account Related Events
Customer Feature and Channel Use
Opportunity
Getting ahead of potential product service problems
Getting ahead of potential repayment
problems
Getting ahead of account related to-
dos
Ensuring customers get more out of
product and channel features
Outreach
Proactive alerts Proactive alerts and tips on ways to better manage
credit
Reminder of upcoming account events and related
tasks
Educational tips during customer
use of services via bank outreach
Result
Customers regularly use banks products
without service problems
Improved loan repayment
decreases defaults
Customers remember to take necessary account
actions
Customer accesses features and
channels that can best meet their
needs
Digital Engagement creates a digital history that can be used to compare negative and positive outcomes.
Digital buyers churn through products and institutions more frequently.
Personalized marketing & education drives digital product selection
HOW IS DIGITAL DIFFERENT?
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
3. ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
16
Design to the Gartner Digital Business Platform, enabling the required capabilities, to defend against the threat, and to partner with the innovators, the technology stack must be rethought.
Enabling the Digital Banking Capabilities
Balance the investment to optimize the customer experience, returns on technology investment & neutralize risk.
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Information Systems PlatformCustomer & Digital PlatformData & Analytics PlatformEcosystems & API platformInternet of things platform
Employees
Partners
Customers
Things*Gartner –G00297286
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
17
Supports the Back Office and Operations such as ERP and Core systemsInformation Systems Platform
Balance the investment to maximize returns and the customer experience.
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Supplier Portal & Apps
Employee Collaboration and
Workspace
Core Banking Applications
End Point Computing
OT Systems
Customer Portal & Apps
Business Intelligence
Back Office Systems
Employee collaboration and workplace -Email, telephony and video, file storage and sharing, collaboration tools, productivitytoolsBack-office systems - finance, HR, purchasing, MDM, billing, ERP, Core systems –Core bankingSupplier portal and apps –Vendor Interaction & supply managementCustomer portal and apps –Customers use them to gain information, get customer service, apply for services, place orders and transact, and/or view statusBusiness intelligence - reporting, dashboards and online analytical processing (OLAP) analysis of back-office and core system dataOperational technology (OT) systems –operational system directly control and monitor equipment and assets.Endpoint computing -endpoint devices and the security and management tools that support them
Employees
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner –G00297286
18
Contains the main customer-facing elements, such as customer and citizen portals, multichannel commerce and customer apps. Multi Channel is table-stakes.
Customer & Digital Platform
Things
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Supplier Portal & Apps
Employee Collaboration and
Workspace
Core Banking Applications
End Point Computing
OT Systems
Customer Portal & Apps
Multichannel Interaction & Commerce
Social Networks
Business Intelligence
Customer Analytics
Back Office Systems
Gateway to Interaction & Commerce. Integrated across the platform.
Multichannel interaction and commerce- enables customers to look up information, request services and do any of the activities associated with e-commerce, regardless of interaction channel
Social networks- participate in social networks for community interaction and transactional (e.g., commerce and payment) functions. Bilateral data exchange with social networks; i.e.: feeds & reads.
Customer analytics–Digital Banking uses analytics ranging from simple historical analysis and segmentation to demand analytics and advanced social sentiment. Can be diagnostic, predictive and prescriptive (e.g., customer offer engine). The output/results of customer analysis can be fed to any other parts of the technology platform.
Employees
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner –G00297286
19
Connects physical assets for monitoring, optimization, control and monetization. Capabilities include connectivity, analytics and integration to core and OT systems.
Internet of things platform
Leverage Connected Things
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Supplier Portal & Apps
Employee Collaboration and
Workspace
Core Banking Applications
End Point Computing
OT Systems
Customer Portal & Apps
Multichannel Interaction & Commerce
Social Networks
Business Intelligence
Customer Analytics
Connected Things
(Partner)Connected
Things (Customer)
IOT Analytics
Connected Things
(Internal)
Back Office Systems
Connected Things (Customers) –Applications, Devices & Technology. Scale, security, cost, and privacy and ethics will be major factors in connecting customer-owned things
Connected Things (Partners) - assets that it leases or that are operated by partners, agencies, or
Connected Things (Internal)–The IoTplatform provides connectivity, and interaction to this equipment, and should be able to handle many different data and wireless standards.
IOT Analytics -Digital Banking uses analytics ranging from simple historical analysis and segmentation to demand analytics and advanced social sentiment. Can be diagnostic, predictive and prescriptive (e.g., customer offer engine). The output/results of customer analysis can be fed to any other parts of the technology platform.
Employees
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner –G00297286
20
Supports the creation of, and connection to, external ecosystems, marketplaces and communities. API management, control and security are its main elements.
Partner & Connected Ecosystem
Run or Participated in Ecosystems and API Economy
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Supplier Portal & Apps
Employee Collaboration and
Workspace
Core Banking Applications
End Point Computing
OT Systems
Customer Portal & Apps
Multichannel Interaction & Commerce
Social Networks
Business Intelligence
Customer Analytics
Connected Things
(Partner)Connected
Things (Customer)
IOT Analytics
Connected Things
(Internal)
Enterprise Run Ecosystems
Customer Facing API
API Management
Industry Run Ecosystems
Partner Facing API’s
API management software–management, security and governance are for APIs that will be public-facing and APIs from partners that will be employed in a business ecosystem that could include employees, customers and partnersCustomer-facing public APIs - to be used by customers orother partners in customer-facing rolesPartner-facing public API -Designed to be used outside the enterprise, but for partners instead of customers. Enterprise-run ecosystems-The ability to create social graphs, feeds, monetization engines and algorithms that link supply with demand (e.g., recommendation engines) are some of the main capabilities of this platform. Industry-and vendor-run ecosystems The technologies that connect and allow interaction and commerce to occur are part of thecapabilities of an ecosystem platform. Ie: Intuit’s Financial API’s, SAP Ariba.
EmployeesBack Office Systems
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner –G00297286
21
Information management and analytical capabilities. Data management and analytical applications fuel data-driven decision making; algorithms automate decisions, discovery and action.
Data & Analytics Platform:
From SiloedBI to Analytics Everywhere
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Supplier Portal & Apps
Employee Collaboration and
Workspace
Core Banking Applications
End Point Computing
OT Systems
Customer Portal & Apps
Multichannel Interaction & Commerce
Social Networks
Business Intelligence
Customer Analytics
Connected Things
(Partner)Connected
Things (Customer)
IOT Analytics
Connected Things
(Internal)
Enterprise Run Ecosystems
Customer Facing API
API Management
Industry Run Ecosystems
Partner Facing API’s
Partner And Supplier Analytics
Business & Op
Analytics
Algorithm Engines
Back Office Systems
Employees
Partner and supplier analytics–analyze the services rendered and products delivered by vendors and partners. Includes data procured from the rapidly expanding landscape of data brokers and open datasets.Business and operational analytics- analyses can be financial, market-focused and process-focused. Data for these types of insights will come from core system and back office sources, complemented by other sources.Algorithm engines-Algorithm and analytics modelling workbenches are becoming an important capability for banks. Sets of tools create and then run the algorithms used in all parts of the enterprise.
Artificial Intelligence- branch of computer science attempting to build machines capable of intelligent behavior.Machine Learning - Based on algorithms that can learn from data without relying on rules-based programming. Ie: Google ‘did you mean..’
Artificial Intelligence
Machine Learning
ENABLING DIGITAL CAPABILITIES WITH TECHNOLOGY
*Gartner –G00297286
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
4. DIGITAL BANKING PLATFORM –DELIVERING ON CUSTOMER EXPECTATIONS
23
Algorithms are at the heart of all on-demand digital solutions. The Algorithm will blend digital, human and operational processes that bring customers fully automated, end-to-end value to match emerging expectations.
The platform must listen, adapt, and be scalable.
Digital Banking Platform – Meeting current & Future expectations
The most successful digital solutions will combine innovation to deliver market valueand disruption in real
time, all the time.
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Employees
Listen - is where the algorithm begins. This element focuses on the edge or the front end of systems, enables and triggers opportunity.
Adapt- is the heart of the algorithm. It focuses on the IT systems and data analysis, striving to derive meaningful insights and predictions out of raw data.
Scale is where the algorithm runs. This element focuses on ensuring that "listen" and "adapt“ happen every time and everywhere.
DELIVERING ON CUSTOMER EXPECTATIONS
24
Digital engagement and CX initiatives are outpacing the supporting Information Systems Platform Legacy Banking Platforms – Application Mapping
Past: Information Systems Platforms àDigital PlatformPresent: Digital Platform à Information Systems Platforms
Future: Virtual Platform àDigital Platform
Data & Analytics Platform
Ecosystems & API Platform
Information Systems Platform
Customer / Digital Platform
Internet of Things Platform
The Core has Shifted -Most Legacy Banking platforms (Information Systems Platform) were designed & launched when banking was a ‘systems of record’ activity, with the shift the digital, the core must be repurposed support the customer / digital platform.
Sustaining Digital Gains - To sustain the gains made in digital, the core investment needs to be balanced so that True Digital Transformation can occur.
Pulling the Core – Driving Digital Customer Experience is pulling the core closer to the customer. Digital Processes must support the Digital Customer.
Partners
Customers
Things
Success Factors
SAP Bank Analyzer
SAPHCP
SAP Hybris E-
Commerce
SAP CRM
Excel
EDW
SAP Hybris Marketing ESB
SAP Core (ECC)
ExchangeECM
SharePoint
SAP BW
Employees
DELIVERING ON CUSTOMER EXPECTATIONS
25
To deliver on the Digital promise, Banks needs to pull the core Information Systems Platform towards the Customer / Digital Platform. Unbalanced transformation will deliver marginally decreasing returns as the back end will not be able to execute on the digital promise.
Activate the Digital Banking Platform – Pull the Core
Horror Vacui–Nature Abhors a Vacuum.
Data & Analytics Platform
Ecosystems & API Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Success Factors
SAP Bank Analyzer
SAPHCP
SAP Hybris E-Commer
ce
Excel
EDWSAP
Hybris Marketing
ESB
SAP Core (ECC)
ExchangeECM
SharePoint
SAP BW
Employees
Holding the Core Back Myths….Mobile banking is sufficient to cope with CX needs: Omni Channel should be a consistent experience, back end or ‘execute’ platforms need to deliver in real-time.Ancient Solutions risky to enhance – Hard-wired business logic and rigid transactional interfaces don’t allow quick extensions, and some applications got maintained to death —delivering close-to-zero flexibility and low availability. Risk prevents E2E transformation –Transformation & Reinvention will be perpetual. Agility supersedes robustness.New Solutions / Priority unclear- Identifying the priorities is complex; feeling of ‘no good answer’.
SAP CRM
DELIVERING ON CUSTOMER EXPECTATIONS
26
Supporting the notion of rapid and constant transformation — as opposed to one-time, multiyear change projects — and allows enhancements of existing solutions.
Digital Banking Platform – Accelerate Customer Experience, Innovate, Connect, & Mitigate Risk
Virtual and in-memory is the standard for real-timeDigital Core Focuses On Customer Engagement And Eases
Transformation.
Data & Analytics Platform
Ecosystems & API Platform
IOT Platform
Information Systems Platform
Internet of Things Platform
Partners
Customers
Things
Employees
Vena
SAP Banking Services 9.0
SAPHCP
SAP Hybris
MarketingESB
S4
Exchange ECMSuccess Factors
Customer / Digital Platform
SAP Hybris E-Commer
ce
E-HANA
Information Systems Platform – Agile, Robust and Real-Time, able to process, connect and support bank’s digital ambitions. The Hub of all customer and transactional data.Customer / Digital Platform- Flexible and connected, able to integrate with Fintech’s , driving innovation, able to deliver ‘in seven seconds’.Data & Analytics Platform–Customer & Enterprise Intelligence, Center for Automation, M2M, Algorithms, Exponential Ecosystems & API Platform– Social Media Integration, Fintech Integration, Internet of things platform– Sensing & listening for the right time and right place to make next offer.
SAP CRM
DELIVERING ON CUSTOMER EXPECTATIONS
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
5. DIGITAL BANKING PLATFORM – FINANCE & CAPITAL
28
SAP S4 & SAP Bank AnalyzerSAP has built the S4 & SAP Banking Services Suite to address the most common banking challenges, the pressure to engage, for liquidity management and ultimate transparency.
FINANCE & CAPITAL
The Universal Journal in S4–S/4HANA Finance is an Accounting System, whose final objective is providing multidimensional Financial Statements, eliminating the separation between Sub-Ledgers and the General Ledger.
Sap Banking Services / Bank Analyzer - is a Capital Optimizer, whose objective is offering a multidimensional representation of the Accounting Results of a bank’s business segment, the Capital consumed for generating the results, and the liquidity generated or consumed in the process. This is the foundation of the Integrated Financial and Risk Architecture.
Postings in the Ledger are for Risk, Liquidity, Accounting & Cash.
SAPAccounting for Financial Instruments (AFI)Sub-ledger
Loans Deposits Securities
S/4 HANAFinanceGeneral ledger
Cards
Sub-ledger
● GL acct derivation● Sub-
ledger Postings
Accounting Engines
● Amortized costs● Fair values● Risk provisioning
● Hedge accounting● Re-classification● Forex
● Notes● Other results
● Aggregated AFI postings● Manual postings● Accts Payable
● Fixed assets● Planning● Consolidation
Events register
● Master data● Cash-flows● Business events
● Business trans-actions
● Market data
Derivatives
29
SAP S4 & the Universal JournalSAP has built the S4 & SAP Banking Services Suite to address the most common banking challenges, the pressure to engage, for liquidity management and ultimate transparency.
SAPAccounting for Financial Instruments (AFI)Sub-ledger
Loans Deposits Securities
S/4 HANAFinanceGeneral ledger
Cards
Sub-ledger
● GL acct derivation● Sub-
ledger Postings
Accounting Engines
● Amortized costs● Fair values● Risk provisioning
● Hedge accounting● Re-classification● Forex
● Notes● Other results
● Aggregated AFI postings● Manual postings● Accts Payable
● Fixed assets● Planning● Consolidation
Events register
● Master data● Cash-flows● Business events
● Business trans-actions
● Market data
Derivatives
Universal Journal - Combined financial and management accounting and profitability data into one universal journal.Planning, Forecasting, Budgeting, Consolidation- planning, budgeting, forecasting, financial reporting, and consolidations. SAP BPC for S/4 Hana, natively integrates S/4 HANA at the data level.Treasury and risk management - manage payments and bank communications and help manage cash, liquidity, debt, investment, financial risk, and commodity risk.Corporate Finance- Real-time visibility into exchange rates and working capital; automate treasury operations and related activities, optimize cash forecasting, ensure adequate liquidity, improve financial risk management, and ensure compliance with global accounting regulations. Receivables, payables, invoice processing, and travel management solutions combine with its real estate management in real-time, all the time.Lights-Out Finance- continuous and event-driven finance. financial and management accounting and profitability data into one universal journal.Reconciliation- All the accounting information in a single multi-dimensional ledger, with separated but integrated entries, structured on the multiple dimensions of this ledger. Integrating the Bank Analyzer Accounting (sub-ledger type) Postings in the S4 HANA Universal Ledger Banks have ZERO reconciliation effort between the accounting and banking applications.
CustomerLifetime Value
Product Profitability
View
Channel Profitability
View
Integrated Planning & Forecasting
Real-Time Analytics
Lights-Out Finance
FINANCE & CAPITAL
30
SAP Bank AnalyzerSAP has built the S4 & SAP Banking Services Suite to address the most common banking challenges, the pressure to engage, for liquidity management and ultimate transparency.
Optimize Capital–and fulfills the IFRS reporting requirements of a Financial Institution . Compliance - IFRS 9, Basel III, IFRS 15, BCBS 239, TLAC are not isolated pieces of regulation, they're a complete framework designed to put Capital Efficiency at the center of the banks' strategic objectives, often by business segment.Bank Analyzer IFRA–provides an accurate measurement of the Capital and Liquidity, generated and consumed, by any potential combination of analytical dimensions, including the business processes involvedIFRS 9 –requires to report in "accounting terms", the Capital generated and consumed by business segment, including Fair Value and Impairment Calculations data once and rolling the same detailed data in multiple waysCapital Consumption –Correspondent Capital Requirements of the Bank's Assets
SAPAccounting for Financial Instruments (AFI)Sub-ledger
Loans Deposits Securities
S/4 HANAFinanceGeneral ledger
Cards
Sub-ledger
● GL acct derivation● Sub-
ledger Postings
Accounting Engines
● Amortized costs● Fair values● Risk provisioning
● Hedge accounting● Re-classification● Forex
● Notes● Other results
● Aggregated AFI postings● Manual postings● Accts Payable
● Fixed assets● Planning● Consolidation
Events register
● Master data● Cash-flows● Business events
● Business trans-actions
● Market data
Derivatives
FINANCE & CAPITAL
31
SAP Bank AnalyzerSAP has built the S4 & SAP Banking Services Suite to address the most common banking challenges, the pressure to engage, for liquidity management and ultimate transparency.
Optimize Capital–and fulfills the IFRS reporting requirements of a Financial Institution . Compliance - IFRS 9, Basel III, IFRS 15, BCBS 239, TLAC are not isolated pieces of regulation, they're a complete framework designed to put Capital Efficiency at the center of the banks' strategic objectives, often by business segment.Bank Analyzer IFRA–provides an accurate measurement of the Capital and Liquidity, generated and consumed, by any potential combination of analytical dimensions, including the business processes involvedIFRS 9 –requires to report in "accounting terms", the Capital generated and consumed by business segment, including Fair Value and Impairment Calculations data once and rolling the same detailed data in multiple waysCapital Consumption –Correspondent Capital Requirements of the Bank's Assets
SAPAccounting for Financial Instruments (AFI)Sub-ledger
Loans Deposits Securities
S/4 HANAFinanceGeneral ledger
Cards
Sub-ledger
● GL acct derivation● Sub-
ledger Postings
Accounting Engines
● Amortized costs● Fair values● Risk provisioning
● Hedge accounting● Re-classification● Forex
● Notes● Other results
● Aggregated AFI postings● Manual postings● Accts Payable
● Fixed assets● Planning● Consolidation
Events register
● Master data● Cash-flows● Business events
● Business trans-actions
● Market data
Derivatives
FINANCE & CAPITAL
32
SAP Bank AnalyzerCombining S4 and Bank Analyzer is a powerful advantage for Banks
Virtual views of the sub-ledger–Dynamically adjust or create new views of the data sets in the sub ledger instantly. Data or structures do not need to be altered or moved.N combinations of data views- Merge data from external applications or external feeds (ie: social, regulatory, exchange) to create infinite views of looking at Bank’s data, seeking new opportunity and defending against challenges.Continuous visibility to Profitability and Exposure–provides an accurate measurement of the Capital and Liquidity, generated and consumed, by any potential combination of analytical dimensions, including the business processes involvedContinuous Activity Based Costing - Model costs and revenues from nonfinancial data collected continuously from clickstream data in ecommerce applications such as hybris. Compliance –requires to report in "accounting terms", the Capital generated and consumed by business segment, including Fair Value and Impairment Calculations data once and rolling the same detailed data in multiple waysDigital–Able to leverage data in the moment, make recommendations and offers to customers based on volatile data sets/data streams.
SAP S/4HANAGeneral Ledger
SAP AFI Financial Instrument Sub ledger
SAP AFI sub-ledger
Rich Ledger Customer Instrument pricing Valuations, Classification Etc…….
GL AccountLegal entity (CoCd)
Trading partner Geography Business
segment
Costing Statistics
Customer Type
Source System
Profit center /
Cost center
Portfolio
Product
General Ledger Dimensions
NO BW REQUIRED
FINANCE & CAPITAL
Deloitte Digital Copyright © 2016 Deloitte Digital LLC. All rights reserved.
DIGITAL BANKING PLATFORM – END STATE ARCHITECTURE
34
The DBP Enabled by HANA is Real-Time & VirtualDigital Banking Platform END STATE ARCHITECTURE
Note 1 –Cloud integration via PO or HCI to be determined
Continuous Banking is Realized
Listen - Continuous virtual views between the 5 platforms allows data, algorithms and customers offers to be personalized and triggered based on customer behavior & non-system activity (ie social).
Adapt- When the sensing engine identifies an opportunity or intervention, the adapt engine calculates an offer or the appropriate intervention based on algorithms, rules and machine learning. This process is designed to run ‘lights out’.
Scale –Leveraging the Listening & Adapt elements, the system can run continuously, not bound by geography, hours or events. Banking is Continuous.
Data & Analytics Platform
Ecosystems & API
Platform
IOT Platform
Information Systems Platform
Customer / Digital
Platform
Internet of Things
Platform
Partners
Customers
Things
Employees
35
An unbalanced transformation approach will fail to deliver digital expectations, great CX and increasingly increase risk exposure for Banks.
The long-tem business model has changed, so must the architecture.
Digital Banking Platform – The urgency to tighten the gap
Without core revitalization, Banks end up with a ‘digital façade’ without a supporting business infrastructure for long run success
Data Rot-Stale data rots at an accelerated rate; when end-users are engaging with vibrant data, quality improves.Continuous Change- The banking industry has entered a phase of continuous change, the architecture must be flexible and responsive.Modern Solutions- Modern solutions will form part of the portfolio, modern integration must exist to participate.Fintech Integration- Services provided through Fintech organizations need to be enabled in a standardized interface to encourage experimentation and rapid discoveryOrganizational Learning- Tighter engagement cycles from 3 months to 3 minutes amplify data centric learning; 40,000X learning cycles are enabled reducing costs and personalizing the customer experience
END STATE ARCHITECTURE