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SAP leads the way for banking in the Digital Economy

Historically eCommerce organizations have been competing with banks and other financial services institutions, including intermediaries like PayPal, Western Union Money Transfer, or even financial subsidiaries set up by automobile firms. Banks, in order to avoid direct competition, have been traditionally partnering with some of these players and even distributing their products using their channel network. So, in an environment where banks have to be on the defensive in order to contain the impact of these eCommerce or retail entities, global enterprise software maker SAP has blended some of its key resources to deliver a suite of software solutions and a robust digital platform for real-time banking with the SAP HANA platform to help banks in the digital economy. A new point of view was shared with attending press on the sidelines of SIBOS 2015 at Singapore.

“SAP intends to simplify commercial banking by offering an array of services and products in order to support the growing emergence of the digital bank,” said Falk Rieker, global vice president and global head of the Industry Business Unit Banking at SAP. He said the intent of SAP is to safeguard the digital future of banks in a scenario where there will be 200 billion connected devices on the internet of things by 2020.

“Commercial banking is becoming increasingly challenged by increased globalization, new sources of competition leveraging newer technologies, faster innovation cycles, greater attention to counter party risks, leading to customer switching, complex industry and country regulatory changes and disclosures and more risks compounded by financial crisis and geopolitics,” he said. He foresaw a situation where business networks will drive companies towards integrated financial partners.


Scott Russell, COO, SAP Asia-Pacific Japan, envisioned the future banking scenario as digital banks, personalization of retail and other sections, real-time core system, optimizing risk management and data management to counter frauds and banks of the future, which will go beyond banking.

Russell went on to say: “Banks must invest in new technologies to better serve their customers, and to stay competitive against the rising threat of technology innovators. Banks need to choose solutions to help banks transition into a digital business smoothly and simply.”

He said by running more simply, banks would be able to design, deliver and be first to market with the most innovative and attractive financial products, improve customer acquisition, service, and loyalty and provide a next-generation customer experience. This will help banks be in a stronger position to face future competition, he added.


Offering end-to-end solutions for banking that cut across all market categories, SAP’s entire product portfolio contributes to a simplified user experience across channels for banks, leveraging innovations in mobile, analytics, and in-memory. With these software offerings and real-time SAP HANA platform, the company has created an innovative digital ecosystem with which banks can afford to be aggressive rather than be defensive, and empower their corporate and SME customers to do more business among them, as well as with the retail customer base of the same bank. It is in effect a market place, powered by SAP’s Hybris, a world leader in powering leading e-tailing websites like H&M and Watsons, with transactions enabled on the backend by the payment systems of the banks, thus giving the advantage to the bank. A person who logs into the portal can do shopping or even request a service. What SAP conceives as a point of view is a banking system where product catalogues are available through the marketplace and services would be linked using SAP’s Fieldglass, a cloud-based vendor management system for procuring and managing contingent labor and servicesand Concur, offering integrated travel and expense management solutions. SAP’s Ariba network will act as a unique b2b trading platform. This ecosystem is linked to the bank and the settlement process is simplified. The facility eliminates several hassles and bottlenecks, where even discounts and goodies can be shared. Since the concerned entities would have already completed KYC procedure, customers can be sure about the credentials of the participating suppliers. And since the bank has a view of both the parties, it will have an end-to-end understanding and can offer a secure environment for processing the payments which anyway happens at the banks’ end.


To give a wider perspective and to do business in a wider network, the banks can also connect to the Financial Service Network (FSN), which is a solution that connects banks and other financial institutions with their corporate customers on a secure network owned and managed by SAP, allowing seamless process integration between financial institutions and their corporate customers. If a corporate wants to deal with another corporate, which banks with another bank, the settlement may need to go through the other bank. In this case, it can go through the SAP FSN network, which is network of several corporate and banks. Similarly, a corporate, which banks with several banks, can connect its ERP to the SAP FSN. The network is based on a cloud owned and operated by SAP. Once connected, all the messages would be translated into a set standard and this would seamlessly enable all the instructions to carry the transactions and also help in running analytics on the transactions. The analytics powered by the SAP HANA platform would further empower the banks to cross-sell, up-sell and also explore a lot more opportunities to improve business and customer experience.

On one hand, the SAP FSN enables doing settlements between different business and at the same time the payment transactions would be done by the respective banks. This enables the customers in the corporate or retail segment to look for all kinds of goods and services from online banking or external sites, but transact in a secure and trustworthy ecosystem. This helps both b2b and b2c customers of the banks to use the banks´ own channel, where all that the bank has to do is the settlement and effect payment. SAP emphasizes this eliminates a lot of inefficiencies, enables convenience and helps the banks to share the fruits of the savings with its corporate, SME and retail customers.


SAP also showcased SAP for Insurance, an integrated yet modular end-to-end platform offering comprehensive capabilities covering strategy, finance and operations. These functionalities are powered by innovations for in-memory analytics, mobile technologies, and cloud and on premise systems. The SAP for Insurance suite offers core processes for managing quotation management, underwriting, rating, policy, billing, claims management, reinsurance and commissions management. These capabilities are augmented by SAP’s enterprise tools for customer relationship management, finance and human capital management. SAP HANA adds real-time analytics to insurance, enabling a deeper, more insightful dimension to fraud detection and customer service. It ties all these processes together to create a harmonized and integrated landscape that improves efficiencies and allows the pursuit of new opportunities. For over 40 years, SAP has been delivering integration and innovation to a wide spectrum of insurance providers both large and small. In the insurance sector, SAP covers property and casualty, life and health, and reinsurance.

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