SAP Financial Services Network

SAP Financial Services Network

Introduction

April 2013

© 2013 SAP AG. All rights reserved. 2 SCN

Treasury Challenges and the Banking Relationship

Multibank relationship implies bank specific

content in SAP ERP

Long Implementation Projects

Needs separate on-premise integration

broker involving costs and special expertise

to maintain

Bank specific payment status and

statements, manually uploaded to SAP ERP

Poor cash management due to lack of

visibility

Lack of remittance information

Many payment rejections with incr.

customer support costs

Poor reconciliation .. Or issues etc..

Bank independent solution

Simplified connectivity

Improved visibility and centralization

Better reconciliation

Efficient straight through processing

Non-intrusive as much as possible

Evolving and growing technology to

support innovative new services

Multi-channel across multiple devices

Challenges Needs


Trends, Challenges & Pain Points Challenges – Technological Pain Points

Lack of transaction visibility and

control

Lack of agility

Multiple failure points and/or

complex infrastructures

Implementation, maintenance and

“expertise” costs

Difficulties in managing working

capital across multiple banking

relationships

Banks Corporate Treasury, AP

& AR Departments


A complete solution needs to have interoperability, scalability, standardization

and process integration all together as part of the business’ core processes

Corporates

demand enhanced services

to facilitate treasury

management

interactions with

their banks.

Banks demand simplified approach

to electronic service

development,

deployment and

delivery

Corporate Banking Supply Chain Partnership


End-to-end process efficiency

Lower TCO

End-to-end compliance

Process and access control

Channel and device agnostic

Multi-bank connectivity through one channel

Easy ERP-integration

Quick response to regulatory change

Customer driven ease of adoption

Flexibility to change without business disruption

On-the-fly analytics

Flexible reporting on profitability, risk, growth

Immediate access

Key Features of an Effective Corporate Services Solution


SAP FSN dramatically reduces costs and increases

efficiency of financial processes for the corporate

SAP Financial Services Network is a new innovative on-demand solution designed to

simplify electronic interaction with financial institutions. The network supports multi-

bank routing, multi-format documents, on-boarding, provisioning, management, and

monitoring capabilities.

• No individual custom solution per bank

• No multi-connection for multi-banks

• No additional hardware or 3rd party

software

• No additional training needed

• No manual updates of settlement,

reports to ERP environment

Deep integration

into your business

processes

Reduced

operational risk and

better visibility

Faster time to

achieve results

Low TCO Solution

Financial Services Network


Why a Financial Services Network from SAP? Market Penetration

186,000 SAP Corporate Customers

730,000 SAP Ariba Buyers & Suppliers


Value For Banks

Win new clients and offer new

services into a vast base of SAP

corporates:

• Faster corporate growth, faster time to

revenue

• Lower cost of doing business via single

integration point

• “Pay-as-you-go” subscription model

• Extension of SAP, higher win rates

New

business

Lower cost


Value For Corporates

Integrates AP, AR and Treasury

processes seamlessly with financial

provider services.

• No new hardware or software footprint, extends

existing SAP resources

• Rapid Deployment Solution for ERP

configuration

• Efficient cash recognition and reconciliation

• Multi-bank solution, delivering risk mitigation

and business agility

• “Pay-as-you-go” subscription model Cost


Corporates

SAP Financial Services Network Deliver benefits across all aspects of the relationship

Financial Services Providers e.g. Banks, Credit Cards, Insurance

sF

TP

SA

P E

RP

FS

N

Connecto

r

SA

P E

RP

• Values Services developed by Banks and delivered to corporates

• Enabling Standard industry messaging support

• Leveraging Business Networks and Rapid services deployment

• Trusted and Secure in the SAP Cloud

• Remotely monitored and managed at a Low TCO

SAP HANA Cloud Platform

SAP Cloud


Ca

sh

Ma

na

ge

me

nt

Reco

ncili

ation

Monitro

ing

&

Ale

rtin

g

Oth

er

Va

lue

Se

rvic

es

SAP HANA Cloud Integration

Su

pp

ly C

hain

F

inan

cin

g

Re

mitta

nce

WS

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or

sF

TP

Back O

ffic

e S

yste

ms

Direct

SAP HANA Cloud Applications


SAP Financial Services Network On boarding in three easy steps

On-board

Agree to join

Define services

On-board to network

Activate

Identify FSN Member

Activate connection

Test E2E Connectivity

Operate

Run payment processes

Monitor Services

Administrate Services

1 2 3

Corporates

sF

TP

SA

P E

RP

FS

N

Connecto

r

SA

P E

RP

SAP Cloud


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sh

Ma

na

ge

me

nt

Re

con

cili

ation

Monitro

ing

&

Ale

rtin

g

Oth

er

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lue

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rvic

es

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hain

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inan

cin

g

Re

mitta

nce

WS

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or

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Financial Services Providers e.g. Banks, Credit Cards, Insurance

SAP HANA Cloud Platform

SAP HANA Cloud Integration


Multiple Layers of Security

• SAP Cloud. The network is based on a cloud owned and operated by SAP. Separation of data

and processing by each bank or corporate participant, digital signing and encryption of data

ensure integrity, security and authentication are complete. Membership and connectivity is not

open to public.

• Separation of processing and data. Each FSN

participant has their own virtual machine or “tenant” in

the Financial Services Network for processing and

their own partition (with unique encryption) for data

storage.

• Multiple layer of encryption and signing are

possible.

• Layer One: Transport encryption such as in SSL

or SSH

• Layer Two: Content signature and encryption

using PKCS#7 or (in future) PGP

• Layer Three: Data element level using corporate

or bank keys as appropriate

SAP Financial Services Network

Corporate

Tenant Bank

Tenant

BANK COPORATE

Bank

Payment

Engine

Corp Banking

System

SAP FSN

Payment Process Status Update

Payment

Customer Installation

SAP ERP

Accounting

Payments

Statement Reconciliation

Ge

neric FSN

Co

nn

ector SA

P E

RP

FSN

Co

nn

ecto

r

Payment Status #87 $1,000 processed

Account

Processing

Accounting Entries

Payment Status #88 $1,500 processed

Statement #87 $1,000 processed #88 $1,500 processed

FSN Payment Run Scenario


SAP FSN

Scenario 1: End-to-End AP payments flow out-of-the-box


SAP ERP Accounting

AP

Payment

Run

Status

Update

Bank

Payment

Request

1. Payment 87

$1,00

0

1. Invoice 28347 $400

2. Invoice 29830 $200

3. Invoice 930029 $300

4. Invoice 73684 $100

Payment

1 2

3

4

Payment

Process

Status

Update*

5

8

Payment

Status

#87 $1,000 Finished

7

6

9

Request

1.Creation

2.Forward to FSN

3.FSN Processing 1. Document Validations

2. Format & Values Conversion

4.Forward to Bank

5.Execution

Status

6.Status Update

7.FSN Processing 1. Document Validations

2. Document Format and Field Level Translation

3. Payment Correlation & Status Update

8.Forward to Customer (Optional)

9.SAP ERP Processing

• All SAP ERP payment methods supported

• All SAP ERP standard or custom payment mediums are supported

• Card Payment methods execute the cycle in 2 steps:

1. Pay vendor using payment card

2. Pay card statement (bank payment)


SAP FSN

Scenario 2: Banks Statements Integration

Bank

Bank

Statemen

t

1

2


SAP ERP

Accounting

Electronic Statements

Posting

Rules

Accou

nt

Payabl

e

Payments

Cancellati

on

Genera

l

Ledger

Expense

s

Financial

Supply

Chain

Bank

Account

s

3

• SAP ERP Electronic bank

statement functionality is

used to update bank

accounting, expenses and

payments.

• SAP FSN generates

statements in SAP ERP.

• No impact in SAP ERP

usage.

• Positive impact in Cash

Management and Account

Payable

Statement Processing

1. Banks forward statements to FSN

2. FSN Processing

1. Document Validations

2. Format & Values Conversion

3. Forward to SAP ERP

Reconciliati

on

Accounts

Cash

Managem

ent

Liquidity

Managem

ent

Vendor

Account

Balance

FI-CO

reportin

g


On-boarding & Service Activation Phases Overview

On-boarding Phase Service Activation Phase

Connectivi

ty Test

Message

Flow Test

User Acceptance

Test

Tenant

Connectivity

Test

Message

Flow Test

User Acceptance

Test

Production

Test

On-boarding is the process of bringing any customer,

whether bank or corporate, onto FSN. This is

independent of any corporate to bank relationship

Service Activation is the process of connecting a

corporate to a bank once on-boarded to FSN.


Scenario 3: How to On-board to FSN

SAP FSN Onboarding

• Service Agreement

• Customer Specific Environment Generation and Setup

Technical SAP ERP

Integration

• SAP FSN Connector Installation and Configuration

• Technical Connectivity

• Integration Security Implementation

Scenario Specific

Analysis and Configuration

• Bank & Card Payments to bank

• Payment Status to SAP ERP

• Statements to SAP ERP

Mapping & Data

Transformation

• Payments Normalization to Canonical Model

• SAP ERP Electronic Statements Generation

End-to-End Routing

• From SAP ERP to Bank

• From Bank to SAP ERP

Core On-boarding Team:

Project Manager – Manages project with the customer

Business Consultant – Identifies process flows and service types

Integration Consultant – Identifies required mapping and data transformation

Security Consultant – Identifies security requirements

FSN Operations – Provisions tenant in SAP Cloud

FSN Cloud – Manage and monitor running of the tenants


SAP HANA Cloud Integration Lowers cost, increases speed, and enhances simplicity for our customers

Legend: OD = on-demand / op = on-premise / EC = Employee Central / ByD = Business By Design / PI = Process Integration


SAP‘s cloud-based bank-company-integration solution offers Simplified connectivity between banks and corporates

– Non-intrusive to IT due to cloud-based integration

– Fast integration within days instead of weeks

– Central monitoring and management

Increased scalability and reach

– Low acquisition, implementation and operating costs for banks and corporates

– Achieving scale for multi-bank and multi-corporate connectivity

– Increased visibility into transactions between banks and corporates

Additional Service Offerings (future)

– New value-added banking applications

– Development by SAP, customer and partner eco-system

Summary

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© 2013 SAP AG. All rights reserved.

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SAP Financial Services Network