Innovative Enterprise Architecture

Falk Rieker, Global Head of Banking Business Unit, SAP

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Falk Rieker, Global Head of Banking Business Unit, SAP

SAP Banking Solutions

A critical priority for the CIO of any banking insitution is toestablish an enterprise architecture practice. The goal of this practice isto align the IT roadmap to business needs, thereby reducing complexity by re-usingexisting investments and minizingredudant project and operations cost.

An enterprise architecture framework can also be used to:

• Implement a methodology to translate business goals into business- and IT architecture
• Create different but consistent views to communicate the model to different stakeholders in an enterprise
• Help business and IT to understand the value of architecture through simplification and common understanding of complex problems

An enterprise architecture framework can:

• Reduce cost of development
• Help avoid reinventingthe wheel
• Provide access to accumulated best practice knowledge and documentation

Banks need a 360-degree view of their customers in order to take a customer-centric, onmichannel approach to improving customer service and loyalty

Once a architecture is put in place, CIOs can prepare themselves and their organizations for digital transformation. They should be ready to:

• Reinvent business processes and IT. First, find ways to manage the huge volume of data and turn it into actionable data. Second, complexity resulting from scattered information, batch orientation, and technology limitation is already slowing down businesses – it’s important to find a way to stop it. Third, incorporate software that not only manages data but actively contributes to business decisions or even makes them.

• Re-imagine the business model. Digitization has a disruptive impact on the entire value chain. Driven by consumer behavior and demand, companies mustnow reach theircustomers through different channels. To support both areas – customer needs and IT architecture – one has to think in two distinct categories: First, the digital core allows customers to set the basis for their path into the digital economy. Second, best-of-breed applications and an open business platform offercustomers a modular and scalable environment to build their own individual suite of applications.

SAP Technology is Leading the Wave of Transformation

Today, bank CIOs are challenged to deliver consistent, personalized and seamless customer experiences across all channels, regardless of how the customer chooses to engage. This means banks need a 360-degree view of their customers in order to take a customer-centric, onmichannel approach to improving customer service and loyalty.

Below are a few specific ways SAP is helping CIOs meet these challenges head-on:

• SAP Banking Services helps Standard Bank of South Africa improve customer service by reduing time for opening new accounts and increasing its ability to change its offerings to meet customer demand.

• SAP Predictive Analytics helps mBank improve customer satisfaction and loyalty while increasing revenue and share of wallet.

• SAP Accounting for Financial Instruments helps DZ Bank improve its reporting and compliance processes for faster automatic monthly closing. In addition, SAP has helped consolidate DZ Bank’s accounting platforms for IFRS compliance.

The digital economy puts massive pressure on banks, but it also offers tremendous opportunities for traditional players, market entrants and startups to innovate a new path forward that more acutely considers the customer experience..

SAP Solutions in SAP HANA

SAP’s Transactional Banking Solutions runon SAP HANA through banking services 9.0.

Banking services 9.0 creates a digital core, unifying the entire banking lifecycle and setting banks up to be more agile in their business transformation. Banks can go beyond traditional transaction processing and drive end-to-end digitized processes based on a single source of information from planning and execution to prediction and analysis, all in real-time, providing a superior customer experience.

Banking services 9.0 can also scale to meet the highest demands of large-volume environments while eliminating data redundancy and enabling live analytics for any business user. The 9.0 release enables banks to take action based on insights from preexisting and new data, regardless of where it is stored.

SAP Implementation Customers

SAP is working a number of customers to implement full service banking solutions. These include;

• ATB Financial uses the SAP Payment Engine to implement cross-border, straight-through processing that eliminates the need to manually add routing details to each payment.

• Commonwealth Bank has utilized SAP’s core banking modernization program to gain first-mover advantage over competitors that could significantly change the Australian banking landscape.

Banco Galicia is a top private bank for local capital in Argentina. By deploying SAP banking solutions, Banco Galicia is now able to respond to new regulations in less than 24 hours, while offering customers 21st century products, services and convenience.

Mobile Being Significant in Banking and Customer Service

SAP understands that business must be conducted from anywhere at anytime, and mobile considerations like a simple end-user interface and scalability are an integral part of SAP’s core banking offerings.

Digital banking, and mobile banking specifically, are extremely important to SAP not only in the context of banking and customer servicing but also from a customer loyalty, marketing and product cross sell/upsell perspective. In addition, SAP mobile solutions are a part of a larger; fully integrated omnichannel banking offering that enables banks to deploy retail, commercial and inclusive banking solutions on a single platform.

Mobile technology enables banks to innovate and deploy intuitive mobile solutions for servicing, sales, teller, and branch manager applications. Digital mobile solutions offer full servicing and transaction capabilities, guided cross-selling and needs assessment analysis tools, and other productivity capabilities that drive continuous engagement and high-touch customer experiences.

At SAP we are also evaluating the following:
• Utilizing wearables to help with customer spending / budgeting.
• Utilizing wearables and/or mobile to transform banking experiences from an authentication perspective.
• Enabling pre-staged transactions and / or pre-authentication via mobile, or a wearable to improve customer experience at the branch or ATM.
• How can augmented reality provide valuable customer information about a real estate property or to enable customers to get in touch with a banker and / or start the loan preapproval process when looking at real estate property via the app.
• Using proximity info to offer customers info on car loans when customer is at the car dealership.
• Using proximity identification / location (iBeacons, etc.) to enable bankers to more effectively serve branch customers.
• Using geo location to prevent fraud , etc.
• How IoT can improve the end customer experience and enable banks to more effectively attract, serve, retain and sell more products to the customers.

SAP Helps Customers Through Technology Lifecycle

Understanding both the challenges and the opportunities that banks face in the midst of digital transformation, SAP has created a digital business framework to help customers develop and execute on their digital business strategy.

The SAP Banking Reference Architecture consists of a comprehensive content library that allows banks to have a multidimensional view of its business through value, process, capability, or technology lenses. The framework can be used as a basis for common terminology and vision to drive, monitor, and align strategic changes across the business.

On the Innovation Front

SAP is committed to continued innovation in the banking sector – from customer engagement and banking operations to risk, compliance and finance.

More specifically, SAP is focused on product innovation geared towards Lifestyle Banking solutions based on a true one-to-one customer engagement. We also always considers customer-driven developments and requests to meet new requirements in commercial banking, such as structured financing, working capital management and cash management.