Canadian Treasurer

December 8, 2011

SAP to add new innovations in merger integration and regulatory management to banking services

GERMANY-- SAP today announced an update of its industry-specific banking software, including planned enhancements to help banks excel in today’s financial climate. The forthcoming 8.0 release of banking services is planned to include analytics tailored to the latest compliance regulations as well as accommodation of mergers and acquisitions through highly flexible transactional banking. Banks will be able to turn to SAP to power either a piece or the core of their operations, as individual components of banking services from SAP will be able to be used separately from the full platform.

Warnings of a double-dip recession, tighter regulation and increasing consolidation have created a need in the marketplace for technology that can ease banks into these new paradigms. SAP intends to add standardized processes around transactions and analytics that can help banks cope with these new realities. The expanded suite of banking services from SAP will allow banks to boost efficiency - bringing products more quickly to market and identifying potential risks.

Key innovations planned for inclusion in the latest release of banking services from SAP include:

  • Merger Readiness: This function is planned to include standardized processes for integrating the operational and accounting systems of subsidiaries onto a main IT platform. Banking services from SAP aims to enable business operations to be sheltered from interruptions during a migration. It also will allow the freedom to integrate what banks need in their existing IT landscape without replacing surrounding functionalities or creating redundant processes. Total cost of operations can become significantly lower by running on a unified platform and tighter account integration can help improve efficiency and time to market for new products and services. 
  • Greater Functionality for Accounting, Risk Analysis and Compliance: Accounting and valuation services are planned to be able to be decoupled from the core banking platform. The SAP® Accounting of Financial Instruments for Banking package aims to provide central accounting and valuation functionality to handle local GAAP and IFRS requirements in parallel, using the same source data. Furthermore, cross-system and department valuations, such as hedging, are planned to be supported. The SAP® Interactive Credit Risk Analysis application aims to enable banks to “stress test” their financial books, uncovering any potential sources of risk before they can have an impact on the business. An easy-to-use interface applicable to both business and IT workers; compliance with the updated Basel II regulations; reduced processing time when conducting a stress test; and the ability to evaluate more credit scenarios overnight by a factor of 10 are all planned for inclusion in the latest release.
  • Greater Flexibility in Service Selection and Pricing: New pricing bundles are planned for banking services from SAP in order to facilitate cross-product incentives to customers. This level of flexibility will contribute to more personalized, higher margin product bundles and improved customer satisfaction.
  • Centralized Payment Management: The SAP® Payment Engine application aims to provide a centralized hub for filtering payments across all of a bank’s channels and multiple lines of business. The application is planned to be compliant with SEPA / ISO 20022, to allow for full integration into existing IT systems and to be able to power white-label service offerings to other banks. Intended benefits should include improved cost-to-income ratios and higher channel profitability.

“Banking services from SAP comprise the most comprehensive and innovative IT platform for banks and financial institutions,” said Gerald Faust, head of Industry Business Unit Banking, SAP. “As the industry faces a lot of mergers, SAP has created a step-wise and flexible approach that will help banks to integrate their systems efficiently and without disruption. In addition, SAP provides the most comprehensive solution to quickly react to the frequently changing regulatory requirements while at the same time focusing on serving the customers with the right products and services at the right time. Banking services from SAP will have all the tools needed to elevate a bank to the top of its industry.”

A Platform of co-innovation and immediate results

An initial adopter of the latest release of banking services from SAP is Deutsche Bank, a leading global bank based in Germany. SAP currently is in the midst of a multi-year initiative with Deutsche Bank to roll out a new core banking system based on SAP software and services in its home market. Many of the innovations planned for this release were conceived as a result of this engagement. SAP customers and partners have long played a role in creating innovative solutions for the greater good of an industry. The upcoming update to banking services from SAP is a prime example of this spirit of co-innovation at work.

A unique innovation planned for banking services from SAP is a rapid-deployment solution module for banks that are in immediate need of critical business capabilities. For example, the SAP® Loans Management for Banking rapid-deployment solution intends to allow banks to generate custom loans in as little as three to four weeks with fewer overhead costs. Banks will be able to add the capabilities they need quickly and with immediate results.

The update to banking services from SAP is planned for general availability in 2012.




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