During the last years the term SAP for Banking has been heard frequently, but hardly perceived when talking about Bank specific applications. However, for more than a year now, it seems that SAP this time really breaks into the Banking Market.
SAP offers a wide and
sophisticated range of products to meet the specific needs of the Banking
Industry.
It’s quite easy to get lost
in this solution jungle and the common practice of SAP to name and rename their
products does not really help. In one tech blog someone even raised the
question if the Bank Analyzer “is just too complex to work with”. It is correct
that it has dozens of different functionalities and at first sight you might
feel swamped, but after a closer look you will see what a powerful and mature
tool SAP has created.
Let’s get started with the
big picture and then break down and focus on the Bank Analyzer. With Banking
Services SAP provides an industry solution that offers a variety of
applications covering the whole value chain.
I think most confusion
starts with the fact that certain functionalities and even old-established ERP
components are suddenly presented as a proper bank specific solution.
So let’s outline first what
is really meant by SAP Banking Services. Of course you will find Sales,
Accounting or Compliance topics branded as banking products – but these in the
end are cross industry solutions. So what is really Bank specific?
The two main blocks that
are combined on the Banking platform are Operational
Banking (meaning Core or Transactional Banking) and Analytical Banking.
Maybe this picture is more
familiar to you:
So for Banking Services,
let’s exclude all Business Support Modules and focus on SAP Core Banking Modules:
- Deposits Management (DM)
- Leasing
- Payments
- Collaterals
- Funding
Contrary to the ERP
Solutions SAP-CML and SAP Deposits, the two modules DM/LM are included within
the Banking Services Platform with its own runtime environment and full
integration from an accounting architecture point of view.
The other Pillar for SAP
Banking Services is Analytical Banking
with its apparently own modules (see picture above). And here is where the
drama begins. Does this graphic imply that there is a designated module for
Risk, Accounting or Asset/Liability Management? Of course solutions such as
Governance, Risk and Compliance (SAP GRC) or Business Objects partly cover
these areas, Risk, Regulation and Analytics, but in this case there is a Bank
specific Tool which unifies these Business functions within one single Solution
– the Bank Analyzer.
“SAP Bank Analyzer provides
a modular, service-oriented, integrated finance and risk architecture (IFRA).
It supports overall bank controlling by calculating, evaluating, and analyzing
financial products.” (Source: SAP). This is the part where the Bank Analyzer
lives up to its name - Analyzer. However, in addition, it is also the
designated Sub-ledger for Bank
specific products, following the approach of a fat Sub-ledger with all transactional detail and a thin General Ledger with aggregated
data.
Does Bank Analyzer also
equal to Sub-ledger for Banking? Maybe it is this unfortunate naming that puts
this powerful tool in the analytical on-top corner and suppresses its real
capabilities.
When deep diving on the
Bank Analyzer – in expert articles, blogs, service provider offerings or
even SAP in-house documentation – you will often find the same spoon-fed
descriptions and images, which in my opinion are little concrete and leave this
jack of all trades device in the nirvana of functional specifications. To break
it down and make this tool tangible, the main application areas for the Bank Analyzer
are:
Accounting/Sub-Ledger:
- Financial Accounting
- Management Accounting
- Profit Management
Risk Management:
- Credit Risk (Basel II)
- Asset/Liability Management
- Limit Management
- Regulatory Reporting
In the next posts we
will get into detail and explain what’s behind each of above mentioned
functionalities – for now I just want to give a basic understanding, so this
black box loses its mystery.
Let’s also scan and skim
the general layer model (next illustration) - or so called Integrated Finance
and Risk Architecture (IFRA), which provides a single point of truth and ensures
that original data, methods and valuation results are clearly separated.
Let’s
focus on the above mentioned core areas Accounting
and Risk and their respective Architecture.
Accounting Architecture:
Risk
Architecture:
At first sight both figures
above might look packed, but they illustrate pretty good the main components of
the Bank Analyzer and map the Accounting and Risk functionalities to the
respective data layers.
In the Accounting Architecture for example you can follow the data flow,
coming from the core systems, such as Deposits or Loans and other source
systems, being stored in the Source Data Layer (SDL) as primary objects.
The marked components in
light blue in the Process & Methods Layer (PML) are the actual centerpieces, containing the accounting
and valuation rules for creating postings, validating and enriching the data.
Via the Results Data Layer
(RDL) and the GL Connector within the Analytical Layer, (AL) the financial data
is prepared and aggregated before handed over to the General Ledger.
Same scheme applies to the Risk Architecture, whereas the focus
here is on Credit Risk and meeting Basel II requirements and other risk related
functionalities such as the calculation of a vast number of key figures, stress
testing and the Limit Manager.
In the next posts we
will see both Architectures and their specific functionalities more in detail.