Loans Management sells fairly well, sometimes next to Deposits Management. It started life as the CML lending system and was originally developed for insurance. Over time, it was taken by a number of German banks, followed by banks from elsewhere. There was also a considerable number of corporate users. Some of the users were fairly large. For instance, Wohnungsbankfürderanstalt was a long-standing user and supported 760,000 loans. SAP decided that the system would be the strategic platform for supporting consumer loans. It covers loan entry and loan position management for simple retail loans and mortgages and for wholesale and commercial banking.


Loan types include consumer loans without


collateral, mortgage loans, general loans (with and without collateral), and policy loans, plus facilities and limits. Takers for CML in 2003 were fairly representative, coming


from DG Hyp and Hypotheken Management, bank and mortgage outsourcers respectively within the same group, both based in Germany, plus African Development Bank in South Africa and HVB Real Estate Capital in France. The World Bank was then recruited for CML in early 2004. The international nature and shift away from Germanic


roots of this system was reflected in the deals in 2006, for instance. Only two of the seven deals were in Germany, with the others in the US, Canada (FCC), Philippines, Greece and Namibia (Agricultural Bank of Namibia). SAP still wins deals solely for Loans Management (First International Bank of Israel was an example in 2007, taking it for its consumer mortgage business) but increasingly this is not the case for Deposits. The emphasis is on Deposits Management or Deposits alongside Loans Management. There was one deal in 2009 for Deposits, from a relatively small Spanish financial institution. CMS, the Collateral Management System, was built with


an initial five banks and was the first product to be developed by SAP 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.


Bank Analyzer is SAP’s credit and market risk engine. It stemmed from SAP’s decision to build a large sub-ledger which could connect to a GL. Bank Analyzer encapsulated


an accounting rules engine and process management functionality, allowing SAP to claim a solution for delivering accounting and risk-based information on a single, consistent basis. It is designed to interact with any third party application, with data export to any GL and XML-based journals. By 2006, SAP claimed 45 customers in 16+ countries. Bank Analyzer boasted complete accounting from the front office level, including IAS32 and IAS39 processing, plus parallel support for multiple GAAPs, comprising local GAAP accounting for Japan, Belgium and Germany. SAP also claimed complete Basel II risk calculations from the one base data set, plus limit management and reporting on Basel II and other calculated exposure data. Further releases brought support for profitability management, asset and liability management, credit portfolio management, risk adjusted pricing and pre- calculation, and market risk. There is also a Price Optimization offering stemming from


SAP’s acquisition in 2005 of Scottsdale, US-based specialist supplier, Khimetrics. Its algorithmic-based solution allows users to determine the optimum price for their products. Since the acquisition, the offering had been moved to Netweaver. In late 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 optimisation 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 Schroter. 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 consolidation tool. This is used to streamline planning,


Universal Banking Systems Market Report | www.ibsintelligence.com 399


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