2007, CSC signed to integrate this with its ageing, high-end Hogan core banking system. Ladonna Hansen, director of marketing at CSC, said there was a lot of demand from top tier US banks for price optimisation, with many still relying on committees and subjectivity. ‘When we saw the SAP tool, we felt it would be a good fit.’ There were other analytics areas where SAP had offerings which would complement the Hogan suite, she felt, such as asset liability management and Basel II. She particularly cited SAP’s credit risk analyser as a likely next focus. SAP also felt the partnership might be relevant for any CSC plans for ‘systems renovation’ of Hogan but Hansen said the emphasis at present was on interfaces with complementary SAP components, not replacement of any of the core. The price optimization solution was being integrated with the Bank Analyzer suite, with this scheduled for release in 2010, with an initial push planned for North America. Two North American banking customers had been added since the acquisition and Khimetrics itself had a small financial services division, although its focus had been primarily retail. The product was being adapted for banking and would become a standard offering for this sector, said Martin Schroter, SAP’s director of business development. It is aimed primarily at the business user rather than IT, he said. The tool allows banks to look at an holistic set of data including competitor pricing and different contributing factors, with the flexibility to model the elasticity of pricing to understand the impact on volumes and profit of price changes. SAP also has a Business Objects-derived planning and
Partners
Partnerships have traditionally played a vital role in SAP’s business strategy. Indeed, on the ERP side, it has relied on third parties for many of its implementations. In banking, its principal partner for some years was Accenture, with this company working on the design and development of several of SAP’s own applications. Then, around 2007, a flurry of partnerships occurred. There was Sungard, with SAP signing to market this company’s Bancware Asset Liability Management (ALM) offering, linked to SAP’s risk and warehouse solutions. According to SAP’s Marc Derungs, VP of banking, speaking at the time of the deal, ALM was becoming more prominent. In traditional universal and retail banking, margin pressure had increased in the last couple of years, he said. This had brought the need for more sophisticated ALM. ‘Before it was a risk control exercise – stay in limit and provide reports to the regulator.’ Now it was much more strategic, centred on taking interest rate risk as a revenue opportunity. SAP could have developed a product to fill this gap, he said, but in the interests of time, it decided to seek an existing solution. Bancware
consolidation tool. This is used to streamline planning, budgeting and forecasting processes. Utah-based Zions Bank is among the takers. Deal-closing in this area was much easier than for larger transformation type projects, Schroter pointed out. SAP’s Collateral Management System (CMS), was
built with an initial five banks and was the first product to be developed by the supplier using only its Indian development resources. It was centred on a third party data model and was traditionally tightly tied to SAP or other lending systems, albeit with this less the case today as the assets used for collateral have extended. Some implementations are for relatively complex collateral management, where this is in a corporate sphere, such as at Mercedes-Benz Financial Services, but with typically high volumes being more the challenge in a retail context. With Basel III, this area attracts more focus than used to be the case. By late 2012, the system had around 25 takers, of which a notable one was Santander. Most takers are in Europe, although there are others in North and South America. SAP announced the general availability of a new release to
help banks digitize their core business and unify transactional and analytical processes on a single platform. Built on SAP HANA, banking services 9.0 can scale to meet the highest demands of large-volume environments while eliminating data redundancy and enabling live analytics for any business user. The new release enables banks to take action based on insights from pre-existing and new data, regardless of where it is stored.
would be part of a combined solution, with SAP contributing the data repository. There was also the start of integration work between the two. A tie-up with Callataÿ & Wouters (C&W) followed, with the
Belgian core system supplier signing as the first core banking systems partner for what SAP was now calling its ‘Outbound OEM’ strategy. The work was initially focused on bringing Bank Analyzer into C&W’s Thaler platform, followed by SAP’s general ledger components, plus making Thaler compatible with Netweaver. The first signing for ‘Thaler on SAP’ was Banca Monte Paschi Belgio but this fell by the wayside. Another Belgian bank, Delta Lloyd, then signed to become its first user (see below). Around the same time, a tie-up was forged with Misys with this centred on its emerging Bankfusion but nothing came of this. Historically, SAP also resold FRSGlobal’s reporting solutions linked to Bank Analyzer and Netweaver. SAP has also worked intensively on attempting to gain industry consensus for the definition of services for the banking sector, to fit within a Service Oriented Architecture (SOA) model. Established in 2005 and headed by SAP, the Industry Value Network (IVN) was an industry grouping made up of an initial ten banks which then grew and came to include
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