Issue 9, September 2006
6
SAP INFO Solutions
Innovate!SAP transactional banking applications
To meet increased competition from both existing and new
entrants targeting spe-cific market segments, banks must become
more innovative. In retail banking,product innovation has
traditionally been poor: A savings account or a fixed de-posit
account looks much as it did 20 years ago. To compete in price and
keep theirprofitability, banks must become more efficient and
innovative in their processes,doing the same things smarter and
faster.
Banks have recently concentratedtheir efforts on increasing the
avail-
ability of their services that is, innovationthrough new
channels such as the Internetor phone banking. An Internet bank
todayis much more than a pure transaction inter-face; automatic
investment advisory hasbecome common. The level of sophistica-tion
is different between different coun-tries, but within a country,
most banks of-fer Internet channels with
comparablefunctionality.
Innovation in product development isno longer a matter of
developing a newtype of savings account with a particularway of
calculating interest, but combininga set of products into a
package. It can bea combination of a mortgage loan and re-payment
insurance or a credit card bun-dled with a current account.
The handling of these packages posesa set of challenges for many
banks, chal-lenges in the administration, charging,and flexibility
of the package. For exam-ple, what happens if the customer
cancelsone component of the package or wantsto extend the existing
package with an ad-ditional product? The current IT land-scape of
most banks increases the com-plexity, since the different
components aremanaged in different product silos, withlimited
possibilities to handle wholeproduct packages.
SAP Deposits Management With its latest release, SAP Deposits
Man-agement offers unique handling of productbundles. A bank can
combine a number ofaccounts into a contract bundle which ismanaged
by a master account to which anumber of functionalities can be
attached,such as payment distribution or pricing.
It also supports automated cross-ac-count processes, such as
overdraft protec-tion. Overdraft protection allows a cus-tomer to
define a second account fromwhich to withdraw money whenever
thecurrent account is at risk of an overdraft.
Through its open architecture, based onSAP NetWeaver and SAPs
Enterprise Ser-vices Oriented Architecture (EnterpriseSOA), its
also possible to include accountsmanaged in legacy systems in the
bundle,solving the problem of cross-system inter-facing.
Another area of innovation is sales-process efficiency. The
ability to respondrapidly to a customer request and turn it in-to
business has become increasingly im-portant. This is accomplished
by enablingthe sales channels with a highly efficientand automated
sales system.
The SAP Account Origination moduleintegrates mySAP CRM sales
processeswith SAP Loans Management to enable astreamlined, fully
integrated originationprocess with the back-office systems.
Withdata entered only once and enrichedthrough the process, its
possible to followa loan contract from an initiating salescampaign,
through a set of offers, to con-tract closure.
A final area of process innovation is inthe back office. A large
amount of bankingwork takes place in the back office, han-dling
such standard activities as when acustomer has overdrawn an account
or apayment has disappeared somewhere be-tween two banks. Most
existing core bank-ing solutions have a limited level of sup-port
in this area; they produce only a dailyprinted report for manual
work.
The SAP transactional banking solu-tions automate these
processes throughrule-based processing, which can respondaccording
to external parameters, allowingfor different service levels
depending oncustomer segment.
Overall, SAP transactional banking ap-plications offer an open
architecture forbanks that want to become more innova-tive through
both products and processesto meet and beat the competition.
Ralph Baumgrtner and
Jesper Behr, SAP AG
Basel II still causingheadaches in thebanking industry
Many major international banksstill face significant challenges
in
preparing for Basel II, according to aglobal study conducted by
Accenture,Mercer Oliver Wyman, and SAP. Banksacross the world are
concerned aboutthe total expenditure involved andshare a lack of
confidence in their ex-isting systems for risk management
andeconomic capital. Compared to theirEuropean counterparts, banks
in theUSA and Asia are trailing behind whenit comes to their Basel
II preparations.
Almost 60% of the institutions sur-veyed were planning to
implement newsolutions to meet operational risk re-quirements. To
keep costs down, overhalf of the banks in the study said theywere
going to develop solutions internal-ly, or to simply modify their
existing so-lutions. For 63% of banks, centralizingdata storage is
a top priority. ThomasBalgheim, senior vice president, finan-cial
services, SAP AG, says that bankssee this as a way to increase
theirchances of completing a project success-fully and potentially
reducing costs.
Further
information:www.sap.com/industries/banking/pdf/BWP_SB_Best_Run_Banks.pdf
Banking Advisory continued from page 4
able to highlight the achievements. Banksand partners interested
in learning moreabout the Network will be able to partici-pate in
local info sessions. The next stepswill include an opening of the
Network tofurther enhance the community, continueworking on the
various topics, and to fur-ther drive standardization.
SAPs role in the Network is to supplysolution expertise and to
help banks agreeon service definitions and other
enterpriseSOA-oriented issues. The effort is an exam-ple of how SAP
relies on collaborative, in-dustry-wide input as refines
enterpriseSOA, the SAP blueprint for a business-dri-ven approach to
SOA.
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