Current strategy
SAP as a whole had a turbulent few years, with a change at the top of the organisation and several different heads of the financial services business. SAP’s footprint in banking has been significantly broadened in the last few years via its various acquisitions, particularly Sybase. This reflected the company’s overall diversification.
New head of financial services, Simon Paris, found that alongside the mainstream tier one and two core banking projects, there was the scattering of other projects, such as in former Soviet states. ‘For all of our customers who have purchased from us, we’ll stay with them,’ he said, in late 2012. However, SAP was now focusing on specific geographies. The company claimed to have spent ten years and €1 billion on its core platform and now wanted to take out the cost and complexity from its projects, in part through pre- packaging. SAP was distinguishing between solutions for retail banking, commercial banking, capital markets, wealth management, central banks, business development and other types of financial institutions. While it was seeking to reuse its components, there would be slightly different solutions for each. SAP claimed the bulk of the functionality needed in core areas but cited commercial lending as perhaps needing more work (CBA was one taker here). RBS was described as a ‘lighthouse customer’ for commercial banking. Localisation was a major theme. Brazil would be a focus in 2013, for instance, where SAP was working with IBM to target the tier two segment. It was also working on first releases for Russia and North America. Nationwide was seen as the foundation for the UK market, CMBC for China. SAP has come up with a framework, Process Object
Builder, around its banking applications which is intended to ease the development of extensions. This is model-driven and is intended for use by non-technicians. ‘It can support extensions in a way that is much quicker, has higher quality and at much lower cost,’ said head of solution architecture, Jens-Peter Jensen. It was also meant to ensure that such extensions were consistent and easier to maintain, and would be used by SAP, banks and partners. A focus on resources, both external and internal, was also a major part of the remedial work that Paris had introduced. Partners have sometimes been blamed for the troubled episodes, and in a number of instances SAP had to step in directly to rectify the problems and attempt to save the projects. However, ‘we have to look in the mirror’, admitted Falk Rieker, global head of the International Banking Unit (IBU) at SAP. He felt SAP needed to improve in terms of working with partners and ‘ramping up the ecosystem’. ‘We have to do a
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better job and avoid the mistakes that have been made in the past.’
The year 2013 saw less news about new wins for SAP and
more about progress at some of the major accounts. CBA completed its deployment of SAP for Banking in mid-year, winding up a six-year process that had encompassed AU$1 billion, two subsidiaries (ASB Bank and Bankwest) and 20 million accounts and 1000 branches at the main bank. 1500 CBA staff were stood down, to focus on other projects. Standard Bank in South Africa also passed a landmark in its implementation. 3.5 million accounts were migrated in mid- April 2013. This had followed the ‘resetting’ of the project in 2010, a year after the original go-live date and six years after the project had first started. In 2015, 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. Banking services 9.0 will enable banks to complete the shift to a real-time, fully digital business model and merge previously siloed functions. As banks are facing digital disruption by new entrants, it is increasingly important to have accurate, live data that supports smart and accurate decision making. SAP- Loans Management takes the top rank in the lending
solutions space with nine deals, followed by Misys- Fusion Banking lending with six. There has been a significant increase in the sales of lending systems, from 11 deals in 2014 to 25 in 2015. This is also reflective of the increased focus of banks on best-of breed lending solutions, with a specialized application.
Commerzbank went live with a set of finance and risk
solutions powered by the SAP Hana platform. The German bank is working with SAP to digitally transform its operations for connected line-of-business transactions, simplified closing processes and regulatory compliance. SAP had also been eyeing the Nordic and Baltic regions. It
recently tied up with CGI in 2015 to bring to market a Software- as-a-Service (SaaS) core banking offering for the mid-tier Swedish market. The platform is underpinned by SAP’s SAP for Banking system. The idea is to build on the back of a first live customer for SAP for Banking in Sweden, Landshypotek Bank, which went live in 2013. Kiwibank committed to a multi-year, multi-million dollar
core banking system project in late 2013/early 2014. The new system is supplied by SAP. It covers deposits, loans and payments.
US Financial Services Technology Market Report |
www.ibsintelligence.com
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