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SAP Loans Management Girish Nehete, Head, Transactional Banking SAP Asia Pacific Japan 19th August 2009

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  • SAP Loans Management

    Girish Nehete,Head, Transactional BankingSAP Asia Pacific Japan19th August 2009

  • Agenda

    1. Introduction2. SAP Loans: Business Process3. Overview of SAP Solutions for Banking

    SAP 2008 / Slide 2

  • Agenda

    1. Introduction2. SAP Loans: Business Process3. Overview of SAP Solutions for Banking

    SAP 2008 / Slide 3

  • SAP Banking Platform Market Leader

    Kaupthing BankPostbank

    FORRESTER:SAP leads with agility among core banking

    vendors in 2007

    CELENT:SAP has won key customers in Europe

    and Asia with its Core Banking productThe product is SOA-compliant through

    the SAP ESA

    GARTNER:Gartner believes these changes (IVN Phase II)

    increase the chance for meaningfuladvances in business process service

    standards for banks

  • SAP 2008 / Page 5 SAP 2008 / Page 5

    SAP for BankingSolution Portfolio Overview

    Customer Communication Channels

    Enterprise ResourcePlanning

    Customer Relationship Management

    Core Banking

    Analytical Banking

    Integration Infrastructure

    voice Connectivity e-mail fax SMS web mail

    Marketing Sales Service

    Customer Information File

    Master Contract Management

    Deposits Payments Collaterals

    Loans Trade Finance Treasury

    Business ProcessManagement

    SOAManagement

    Corporate bankingconnectivity

    Accounting

    Asset LiabilityManagement Basel II

    Human Resources

    Procurement

    Cost Controlling

    General Ledger

    Corporate Services

    SAP Business User

    Governance, Risk andCompliance

    Enterprise InformationManagement

    Enterprise Performance Management

    BusinessIntelligence

    IAS/IFRS Profitability Limits CreditPortfolioCurrency Management

    Optimization

  • SAP 2008 / Page 6

    Industry Business Scenarios Select Customers TotalCustomers

    SAP Enterprise Resource Planning 600+

    SAP Business Intelligence 800+

    SAP Analytical Banking 120+

    SAP Transactional Banking 130+

    SAP CRM for Banking 40+

    Banking customer base-- 800+ Banking customers worldwide --

    Industry leaders are leveraging SAP beyond ERP to address high-value industryscenarios

  • Agenda

    1. Introduction2. SAP Loans: Business Process3. Overview of SAP Solutions for Banking

    SAP 2008 / Slide 7

  • SAP Transactional Banking Solutions

    SAP 2008 / Slide 8

    ATMBranchMobile Call CenterInternet

    L O A N S

    Deposits

    Col

    late

    rals

    Leasing

    Paym

    ents

    Customer Information

    Synd

    icat

    ions

    Customer Relationship Management

    Master Contract Management

  • What is SAP Loans ?

    700+customersworldwide

    60+insurance

    comp.

    110+Banks Loans is part

    of most sales cases

    20 newCustomers

    in 2007

    fits for differentbank businesses

    Retail

    Corporates

    UniversalBanks

    ConsumerLoans

    ProjectFinancing Real Estate

    CreditFactories

    SAP 2008 / Slide 9

  • Expectations ofCredit Software

    Market Requirements for Credit Software

    Business Intelligence

    Master Data Management

    Integration of Information

    Financial Accounting

    Correspondence

    Back Office Support

    Various Service Channels

    User-Friendly InterfaceIntegrated Workflow

    Integration of People

    Management ofBusiness Processes

    Implementation and Interfaces

    Integration of Processes

  • SAP Offerings for Loans Management

    Technology

    Processes

    People

    Application

  • One Solution for Customers with DifferentBusiness

    Credit Factory

    Private Bank

    ConsumerLoans

    Real Estate

    ProjectFinancing

    CorporateFinancing

    Specialised

  • SAP Loans - Business Process

    Customer Application

    Contract Conclusion

    Accounting

    Disbursement

    Contract Default

    Contract End

    Contract Processing

    Contract Analysis

    PositionManagement

    Execution

    NewBusiness

    Portfolio

    Aut

    horiz

    atio

    n / R

    elea

    se

  • Visibility: 360 Customer View

  • Customer Management Loan Origination

    Single Customer, Loyalty, and Marketing

    Case Management

    Defined Products & Product Bundles

    Flexible Process Automation

    Product Offers

    Collateral Handling

    XI Services

    Sales Opportunity Management

    Document Management

  • New products made easy!

    with SAP Loans Management Product Cofigurator!

  • The Product Configurator

    New business rules using flexible Productdefinition

    ?Over 30 product-specific parameters?Minimum and maximum loan amount and term? Flexible payment periods monthly or daily

    configuration (s)? Payment rules pre-, under-, over- and single

    payment? Payoff penalty definition, short and over payoff

    handling, automated payoff processingProducts build thefoundation of the loan

    Product set up allowsflexible control of business

    rules and quickimplementation of change.

  • Integrated Loan calculator

    Calculation of loan repayment rate

    Calculation of loan capital

    Calculation of loan term end

    Calculation of loan interest rate

  • Automated calculation of loan repayment rate

  • Automated calculation of loan capital

  • Seamless Collateral handling

    Collateral Management

    LoansManagement

    Corporate LoansConsumer Loans

    Car LoansIslamic Banking Loans

    Mortgage Loans

  • Collateral Workplace: Monitoring

  • Position Management - Highlights

    ? Automatic assignment of all incoming payments

    ? Automatic clearing of payments with receivables

    ? Tracking of overdue receivables

    ? Default functionality

  • Business Operations Overview

    ? Early repayments, partial or full? Additional charges? Individual postings? Write-offs / Charge-offs? Borrower changes

    ? Workplace-structured entry of businessoperations

    ? Business partner-based, contract-based, orproject-based selection for businessoperation entry

    ? Status tracking of business operations

    ? Reversal of any posting

    ? Release functionalityReversedReversed

    DeletedDeletedSaved as a

    plannedrecord

    Saved as anactualrecord

    Activate (release, if required)

    Delete

    Change

    Delete

    Reverse

    Post

    Entered/SavedEntered/Saved

    ActivatedActivated

    PostedPosted

    DeletedDeleted

  • SAP LoansManagement

    CustomerInformation

    CRM

    BusinessWarehouse

    FinancialAccounting

    CollateralManagement

    Reserve forBad Debt

    A Pre-Integrated Solution

    SAP Loans Management Interfaces

  • SAP Loans Complete Business Process

    Customer Application

    Contract Conclusion

    Accounting

    Disbursement

    Contract Default

    Contract End

    Contract Processing

    Contract Analysis

    PositionManagement

    Execution

    NewBusiness

    Portfolio

    Aut

    horiz

    atio

    n / R

    elea

    se

  • Agenda

    1. Introduction2. SAP Loans: Business Process3. Overview of SAP Solutions for Banking

    SAP 2008 / Slide 27

  • SAP Corporate Banking Connectivity

    SAP direct corporate communication for optimal efficiency and new business revenue generation

    Solution Components? SAP NetWeaver Process Integration

    Some Customers

    Pain areas

    ? High acquisition costs for acquiring newcorporate customers, especially Small and

    Medium Businesses (SMBs)? Long and resource intensive implementation

    process? High operating costs for servicing multiple

    corporate customers? High up-sell costs to grow wallet share? Low profit margin and reduced customer

    retention due to increased competition

    The Solution? Reduced operational risk, improvedsecurity and increasted transactional

    transparrency from end-to-end.? Tap new revenue streams across the

    Financial Supply Chain and deliveryservice differentiation.

    ? Reduced on-boarding time, fasterrevenue realization and improved

    customer satisfaction.? Near real-time transaction delivery? Standardized best-practice

    implementation

  • SAP Core Business Transformation

    SAP 2007 / Page 29

    Business Process Platform for Banking Allowing for a component based approach to Core Transformation

    The Solution Transformation approach to core b

    Flexibility to follow components baseddeployment

    Selectively replace components andtransform specific business ( ex: Loans)

    Comprehensive and robust productfactory

    Business Process Platform with easeof Integration

    Standard software with flexibility toextend as per banks needs

    Solution Components SAP Banking Services

    Customer Information Deposit Management Loans Management

    Collateral Management Payment Engine

    Partner components Misys Trade innovation Misys Opics Treasury

    Some CustomersBusiness Process Platform for Banking

    Pain areas Legacy systems high maintenance cost and

    lack of flexibility Complete rip and replace of Legacy systems

    requires high risk transformation excercise New systems difficult to co-exist with exisiting

    specialized solutions Long time to market for launching new

    products

  • SAP Universal Banking Solution by Callatay &Wouters Thaler run on SAP

    SAP 2007 / Page 30

    End to End Universal Banking package offering

    The Need Need for all-in-one packaged

    solution Bank in a box with pre-defined and

    pre-configured contents Extensibility to private wealth

    management

    Some Customers

    SAP Business Process Platform

    Deposits Loans SecuritiesTreasury

    Generic Functions

    Payments

    AccountingInterest

    &Fees

    Tax MessagingAMLUser Access

    &Security

    Customer Information File

    Internet Banking Branch Banking CRM

    BusinessIntelligence

    &Interfaces

    Bank Analyzer & General Ledger

    Regulatory Reporting

    OtherChannels(ATM, IVR,

    etc.)

    PRIVATE

    Solution Components Thaler run on SAPThaler universal banking

    modules SAP Bank Analyzer

    SAP General Ledger SAP Netweaver

    The Solution Ready to run package solution

    Universal Banking solution catering toend to end core banking components

    Core banking solution with integrationinto IFRS and BASEL II

    Fully integrated with ready launch padtowards SOA

    Horizontal capability via combinesexpertise of SAP and C&W in Core

    bankingVertical capability via proven SAP

    Technology Private Wealth Management modules

  • SAP Centralised Customer InformationManagement

    SAP Centralised CIM Solution creates a central comprehensive repository with enriched content as a singlesource of truth for the Enterprise System Landscape

    Some Customers

    Solution Components

    SAP Business Partner SAP Business Objects Data Quality

    Management SAP Business Objects Dashboard

    The Solution

    Enablement of improved CustomerManagement through 360 View on

    customers in each and every bankingprocess

    Provides foundation layer andplatform for other systems to deliver

    further benefitReadiness of IT-landscape for an

    improved adaptivness of processesProcesses complexity reduction by

    referring only to one central source ofcustomer data

    Advanced Business Intelligence Toolswith dynamic-analytics and content rich

    Dash BoardsFocus on customer for business

    growth

    ? >20 Million BusinessPartner Records

    ? Integration with > 41Legacy Systems

    ? >40 Million BusinessPartner Records

    ? >7 Million BusinessPartner Records

    ? Integration with SeibelCRM front end

    Pain areas IT - Complex system landscape leading to

    distributed and inconsistent CustomerInformation

    Regulatory - Incomplete KYC Information Customer Channel - Multiple Versions for

    Customer Information leading to poorcustomer experience

    Product Management Product CentricOfferings

    Sales and Marketing - Higher campaigndelivery costs, poor campaign results due to

    mis-marketingCIO Business growth possible with

    customer based growth strategy

  • SAP Enterprise Collateralization ofReceivables

    SAP Collateral Management as a Enterprise Collateral Solution

    Solution Components SAP Collateral Management Stand

    alone or as a part of core banking SAP Portal

    SAP Business Objects Dashboard

    Some Customers

    Pain areas Decentralized view of collateral liquidity,

    exposure and pricing In-house developments / core banking does

    not provide centralised viewLack of opportunity to cross sell or increase

    revenue from existing clientsChanges to regulatory to adapt business

    process for collateralsMissing analytical tools lot of manual work

    involved

    The Solution

    The front- and back-end support forEnterprise-wide Management of

    Collateral across complete collateral lifecycle.

    Risk reduction via transparency oncollateral position (esp. bad debts)

    Increased ROI on capital Business process compliance with

    regulatory requirements Improve credit risk management Make use of multi currency, multi

    language, multi client features Get user experience with streamlined

    business processes

  • SAP Enterprise Credit Management Platform

    SAP 2007 / Page 33

    SAP Loans Management as a Enterprise Credit Management Platform

    Solution Components SAP Loans Management Stand alone

    component SAP Portal

    SAP Business Objects Dashboard

    Some Customers

    Pain areas

    Distributed loans system/ platform fordifferent lines of loans business

    Time to market new products takes too long Inefficient Loan operation process

    Missing simulation tools lot of manual workinvolved

    The Solution

    One single platform for different bankbusiness Corporate, Retail, Universal

    Banks, Credit Factories, Real Estateand Project Financing

    Easy configuration of new productsBusiness rules driven automated

    processing Improved credit management

    Make use of multi currency, multilanguage, multi client features

    Get user experience with streamlinedbusiness processes

  • SAP Financials for Banking

    SAP 2007 / Page 34

    Achieve Financial Excellence through SAP solution for Integrated Accounting

    Pain areas High Reconciliation effort/Costs Difficulty of audit and traceability

    Integration is cumbersome Limited Ad-hoc reporting capabilities Limited proactive exception reporting

    The SolutionThin and Fat Sub Ledger concept

    Multi CCY/Multi GAAP End to end process for Hedge

    Accounting Consolidation

    Full monitoring capabilities Flexible OLAP Reporting

    Solution Components SAP Financials Financial Accounting

    Management Accounting SAP Business Objects Dashboard

    Some CustomersReporting and Analytics

    Costs ofOperations

    (ManagementAccounting)

    IAS/SubLedger

    GeneralLedger

    (FinancialAccounting)Consolidation

    FinancialStatements

    Source Data Layer

    FinancialInstrumentAccounting

    Subledger

    Results Data Layer

    HedgeAccounting

    Fair ValueServer

    HedgeAnalytics

  • SAP Basel II, Risk and Compliance

    SAP 2007 / Page 35

    Enable risk-intelligent decisions across your enterprise

    Pain areas Challenges in decision making due to

    lack of quality information High effort and cost to consolidate

    data across disparate systems High reconciliation efforts

    The SolutionConsistent and reconciled Financial

    Risk data mart Credit risk engine for risk weighted

    average calculations Flexible calculation processes

    Regulatory reporting Limit Management

    Solution Components SAP Bank Analyzer

    SAP Business Objects Dashboard

    Some CustomersReporting and Analytics

    Costs ofOperations

    (ManagementAccounting)

    IAS/SubLedger

    GeneralLedger

    (FinancialAccounting)Consolidation

    FinancialStatements

    Source Data Layer

    FinancialInstrumentAccounting

    Subledger

    Results Data Layer

    HedgeAccounting

    Fair ValueServer

    HedgeAnalytics

  • SAP Human Capital Management

    SAP 2007 / Page 36

    Achieve Operational Excellence using SAP HCM

    Pain areas Hiring/Training/Retaining talent lack

    of tools to manage High Training costs

    High costs of common businessprocess like leave processing

    Difficulty of audit and traceability Poor service quality

    The SolutionOne solution for more than 40

    countries with full compliance to legalrequirements

    Fully integrated web based trainingsystem

    Fully integrated workflow for Payroll,Procurement, Training and Career

    planning Integrated solution for talent

    management that enables to retain topperformers and develop them.

    Solution Components SAP ERP Human Capital Management

    Some Customers

    FindingTomorrows

    Leaders

    WorkforcePlanning

    Finding/Retaining the Right

    Talent

    WorkforceAlignment

    EnsureCompliance

    MeasuringEffectiveness

  • SAP Currency Management and Optimization

    SAP 2007 / Page 37

    Optimize your cash and reduce expense on cash logistics

    Pain areas High cost of cash handling

    Over stocking of ATMs due to lack ofvisibility of demand

    High transportation cost due tomultiple trips

    High costs for Emergencyreplenishment

    Lack of tracking of cash in transit

    The Solution

    Full cycle of currency supply Demand Planning Supply Planning

    Supply optimization Transportation planning

    Solution Components SAP Advanced Planning and

    Optimization (APO) SAP ERP

    SAP Business Objects Dashboard SAP Event Management

    Some Customers

    Cash Centre ACash Centre A Cash Centre C

    Cash Centre C

    Regional BranchRegional Branch

    OtherBanks

    OtherBanks

    ATM1

    ATM1

    Branch YBranch Y

    Branch XBranch X

    ATM2

    ATM2 ATM

    3

    ATM3 ATM

    4

    ATM4 ATM

    5

    ATM5

    Cash Centre BCash Centre B

  • Choose your Line to your destination with SAP

    Reconciliation

    Security

    Information Management

    Customer Centricity

    Embedded Analytics

    Predictive Analytics

    Customer Channels

    Bundle Pricing/Product

    Integrated Banking Solution

    Core Banking Replacement

    Incremental Core Banking Replacement

    Payments

    Collections

    Working Capital Management

    Wealth Management

    Unbanked/Underbanked

    Micro LendingNon banksIslamic Banking

    SME Lending

    Mergers &Acquisitions

    Go International

    Outsourcing/Offshoring

    Green Banks

    Customer Line

    Information Line

    Core Banking Line

    Segment Line

    Holistic Line

    Leasing

    Enterprise Risk Management

    Compliance & Regulation

  • Thank you.

    Thank You for yourattention!!!

    Reconciliation

    Security

    Information Management

    Customer Centricity

    Embedded Analytics

    Predictive Analytics

    Customer Channels

    Bundle Pricing/Product

    Integrated Banking Solution

    Core Banking Replacement

    Incremental Core Banking Replacement

    Payments

    Collections

    Working Capital Management

    Wealth Management

    Unbanked/Underbanked

    Micro LendingNon banksIslamic Banking

    SME Lending

    Mergers &Acquisitions

    Go International

    Outsourcing/Offshoring

    Green Banks

    Customer Line

    Information Line

    Core Banking Line

    Segment Line

    Holistic Line

    Leasing

    Enterprise Risk Management

    Compliance & Regulation

    Girish NeheteHead, Transactional Banking,SAP Asia Pacific JapanGlobal Banking Line of Business

    M +6592361660F +6567685413E [email protected]

  • SAP Summit 08 / Page 40

    Thank you!

  • SAP Summit 08 / Page 41

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