Finance in the Digital Age

Transcription

1 Finance in the Digital Age Marija Bozicev, Drazen Tomic 1 The way you would like to work in finance 2 1

2 is usually far away from the reality in bank s finance processes 3 The reason for that is that the CFO is confronted with a multitude of challenges Market Low Interest Rate Environment New market entrants Increased customer expectation Pressure on costs and profit Regulation Increased regulation Accelerated closing cycles Ad-hoc data and reporting requirements Legacy Fragmented systems High level of manual processing High maintenance efforts for custom build solutions CFO as Business Partner? Data Data silos Data quality issues, granularity and timeliness 4 2

3 which have led to the following implementation patterns Finance estate at large retail bank (simplified) Finance / accounting is largely run outside of finance systems ( satellite systems ) Missing Alignment between finance and risk No single source of truth for finance, risk and customer data Reconciliation is a huge challenge 5 And what can SAP do for you? Methods / Applications CFO CRO COO CMO CDO Accounting for Financial Instruments Regulatory Reporting Performance IRRBB Basel III / Liquidity Risk Operational Risk Customer Analytics Market Risk General Ledger, Accounts Payable/ Receivable, Asset Accounting, Consolidation Data Financial Services Data Platform ERP Data Transactional systems Trading, Loans, Payments, Accounts, Asset Mgmt., Customer Relationship Mgmt. etc. 6 3

4 Smart Accounting for Financial Instruments integrated with the GL Methods / Applications CFO CRO COO CMO CDO Accounting for Financial Instruments Regulatory Reporting Performance IRRBB Basel III / Liquidity Risk Operational Risk Customer Analytics Market Risk General Ledger, Accounts Payable/ Receivable, Asset Accounting, Consolidation Data Financial Services Data Platform ERP Data Transactional systems Trading, Loans, Payments, Accounts, Asset Mgmt., Customer Relationship Mgmt. etc. 7 The typical implementation of subledger accounting burdens bank s operations Loans SL Loans General Ledger Challenges Deposits SL Deposits De-Centralization: Accounting rules are distributed across many different places Securities Derivatives Others SL Securities SL Derivatives SL Others General Ledger Postings Responsibility is unclear between product management and accounting Reconciliation is difficult due to different granularity Many manual adjustments 8 4

5 With our approach for Smart Accounting for Financial Instruments we remove the burden from your operational banking systems Loans SAP smartafi Classification Status SAP S/4HANA Deposits Multi Currency Accounting Impacts of changed Master Data Securities Impairment Engine Amortized Cost and Effective Interest Rate General Ledger Postings Derivatives Accruals and Deferrals Engine Lot Accounting Others Hedge Accounting Fair Value Engine 9 and enable Multi-Dimensionality in the accounting document Legal entity (CoCd) GL Account Thin Ledger Trading partner Geography Business segment Portfolio Richer Ledger SAP S/4HANA general ledger Customer Source System Profit center / Cost center Product Costing Statistics SAP AFI financial instrument sub-ledger Contract (e.g. loan) Transaction Channel Potential Benefits - Financial Reporting - Intercompany Reconciliation - Planning - Consolidation preparation 10 5

6 presented in a state of the art user interface Personalized Role-based engagement across the business Responsive Instant access to any business insight Simple Simple design across business processes 11 Smart Accounting helps you move into the Digital Age for Finance Single Source of Truth for Financial Data Centralized accounting subledger Instant Insight into Financial Data at any level of detail including drilldown capabilities facilitating timely, relevant decisions Gain full data lineage transparency over accounting processes with General Ledger balance substantiation based on instrument level-detail Accelerate implementation and adapt to changing regulations by leveraging pre-configured content and benefit from extensibility by design Support Fast Close 12 6

7 Profitability and Cost Methods / Applications CFO CRO COO CMO CDO Accounting for Financial Instruments Regulatory Reporting Performance IRRBB Basel III / Liquidity Risk Operational Risk Customer Analytics Market Risk General Ledger, Accounts Payable/ Receivable, Asset Accounting, Consolidation Data Financial Services Data Platform ERP Data Transactional systems Trading, Loans, Payments, Accounts, Asset Mgmt., Customer Relationship Mgmt. etc. 13 Profitability and Cost Find answers to these questions What is my return on equity? What is the profitability of a particular product in different sales channels? How many customers bought our new product last month? Which customer groups are most profitable with which products or services? What profitability can I expect, if I decrease my IT Expense by 7%? CFO / COO Are planned operating expenses higher or lower than actual costs? 14 7

8 by applying performance analysis at any level of detail Financial Accounting Funds Transfer Pricing Cost & Revenue Allocations Interest Income/Expense Funding Cost/Revenue Net Interest Margin Standard Capital Costs Standard Risk Costs Standard Processing Costs Contribution Margin I Marketing Costs HR Costs by Org Unit Product Channel Customer Contract Any Others IT Costs Contribution Margin II 15 8

9 Thank you. Contact information: Drazen Tomic Presales Expert Banking MEE M E drazen.tomic@sap.com 9