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


1. WHY IS DIGITAL CHANGING FSI NOW?


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?


DISRUPTIVE INNOVATIONS ARE RESHAPING THE WAY FINANCIAL SERVICES ARE:STRUCTURED, PROVISIONED, AND CONSUMED

DISRUPTIVE INNOVATIONWHY IS DIGITAL CHANGING FSI NOW?


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


WHY IS DIGITAL CHANGING FSI NOW?


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


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.



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.


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


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.




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.


Ecosystems & API

Platform

IOT 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


*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


Ecosystems & API

Platform

IOT Platform


Customer / Digital

Platform

Internet of Things

Platform

Partners

Customers

Things



Workspace


End Point Computing

OT Systems


Multichannel Interaction & Commerce

Social Networks


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



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


Ecosystems & API

Platform

IOT Platform


Customer / Digital

Platform

Internet of Things

Platform

Partners

Customers

Things



Workspace


End Point Computing

OT Systems



Social Networks


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



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


Ecosystems & API

Platform

IOT Platform


Customer / Digital

Platform

Internet of Things

Platform

Partners

Customers

Things



Workspace


End Point Computing

OT Systems



Social Networks


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



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


Ecosystems & API

Platform

IOT Platform


Customer / Digital

Platform

Internet of Things

Platform

Partners

Customers

Things



Workspace


End Point Computing

OT Systems



Social Networks


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




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.


Ecosystems & API

Platform

IOT 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


Ecosystems & API 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


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.




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


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.



IOT 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



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.




Cards

Sub-ledger


ledger Postings

Accounting Engines






Events register



● 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




Cards

Sub-ledger


ledger Postings

Accounting Engines






Events register



● 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




Cards

Sub-ledger


ledger Postings

Accounting Engines






Events register



● 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


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.


Ecosystems & API

Platform

IOT 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