Delivering Real-Time Business Value for Banking

July 2013
Delivering Real-Time Business Value
for Banks
SAP Business Suite Powered by SAP HANA
Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2Public
Banks must seek new competitive advantages in
response to changes in customer trust,
demographics, and demands, as well as to profit
margins reduced by higher capital requirements,
compliance costs, and lower fee income.
 Create new and innovative products that excite customers
 Respond rapidly to evolving trends
 Ensure business processes are flexible, efficient, and
cost-effective
The real-time opportunity

Delivering the future of banking today
Business priorities in banking…
Finance  Accelerate closing process
 Get a single source of truth
 Enable easier reconciliation
Sales and services  Convert loyalty into revenue by utilizing
predictive analytics
 Focus on the right markets by gaining insight
in customer analytics
 Get a true 360-degree view of the customer
Risk and compliance  Minimize access risk and prevent fraud
 Reduce the cost of access management and
ongoing compliance activities

SAP Business Suite powered by SAP HANA
The next-generation business platform
Real-time business
In-memory
Business
transactions
Digital
connections
Collaborative
business
CloudSocial
Big DataMobile
One platform bringing it all together
Advanced
analytics

Industry value map for retail and commercial banking
Delivering the future of banking today
Retail Banking Operations
Retail Deposits
Retail Lending
Centralized Payment
Processing
Finance Finance Transformation Performance Management
Finance and Risk Data
Management (IFRA)
Collaborative Finance
Operations
People and
Talent
Core Human
Resources and Payroll
Talent Management
Workforce Planning
and Analytics
Procurement
Supplier Discovery and
Lifecycle Management
Strategic Sourcing
and Contracting
Procurement and
Order Collaboration
Collaborative Invoice
to Pay
IT Management
Application Lifecycle
Management
IT Infrastructure
Management
IT Portfolio and
Project Management
IT Service Management
IT Strategy and
Governance
Multichannel
Mobile Customer
Internet Banking
Call Center
Automated Teller Machines
Sales and Service
Customer Acquisition
Customer Management
Social Media
Engagement
Risk and Compliance
Credit Risk Management
Liquidity Risk Management
Governance, Compliance
and Surveillance
Enterprise Risk
Reporting
Commercial Banking
Operations
Cash and Liquidity
Management
Commercial Lending
Leasing
Financial Services Network
Technology
Solutions
Analytics Consumer ExperienceData Management Enterprise Mobility
SAP HANA Platform
Application Develop-ment
and Integration

Industry value map for retail and
commercial banking
Real-time value for key end-to-end processes
Retail Banking Operations
Retail Deposits
Retail Lending
Centralized Payment
Processing
Finance Finance Transformation Performance Management
Finance and Risk Data
Management (IFRA)
Operations
People and
Talent
Core Human
Resources and Payroll
Talent Management
Workforce Planning
and Analytics
Procurement
Strategic Sourcing
and Contracting
Procurement and
Order Collaboration
to Pay
IT Management
Management
IT Infrastructure
Management
IT Portfolio and
Project Management
IT Strategy and
Governance
Multichannel
Mobile Customer
Internet Banking
Call Center
Automated Teller Machines
Sales and Service
Customer Acquisition
Customer Management
Social Media
Engagement
Risk and Compliance
Credit Risk Management
Governance, Compliance
and Surveillance
Enterprise Risk
Reporting
Commercial Banking
Operations
Cash and Liquidity
Management
Commercial Lending
Leasing
Financial Services Network
Technology
Solutions
SAP HANA Platform
and Integration
Initial focus for
SAP Business Suite on
SAP HANA for banking

Industry value map for capital markets
Managing capital for economic growth
Sales and Trading
Real-Time P&L Management
Market Making and Trading
Market Data Analysis
Finance
Accounting and
Financial Close
Operations
People and
Talent
Core Human Resources
and Payroll
Talent Management
Workforce Planning
and Analytics
Procurement
Strategic Sourcing and
Contracting
Procurement and
Order Collaboration
to Pay
IT Management
Management
IT Infrastructure
Management
IT Portfolio and Project
Management
IT Strategy and
Governance
Brokerage Services
Prime Brokerage
Client Services
Trading Analytics
Risk and Compliance
Real-Time Risk Management
Governance, Compliance, and Surveillance
Enterprise Risk Reporting
Technology
Solutions
SAP HANA Platform
and Integration

Industry value map for capital markets
Real-time value for key end-to-end processes
Sales and Trading
Real-Time P&L Management
Market Making and Trading
Market Data Analysis
Finance
Accounting and
Financial Close
Operations
People and
Talent
Core Human Resources
and Payroll
Talent Management
Workforce Planning
and Analytics
Procurement
Strategic Sourcing and
Contracting
Procurement and
Order Collaboration
to Pay
IT Management
Management
IT Infrastructure
Management
IT Portfolio and Project
Management
IT Strategy and
Governance
Brokerage Services
Prime Brokerage
Client Services
Trading Analytics
Risk and Compliance
Real-Time Risk Management
Governance, Compliance, and Surveillance
Enterprise Risk Reporting
Technology
Solutions
SAP HANA Platform
and Integration
Initial focus for
SAP Business Suite on
SAP HANA for banking

Today
Delta KPI improvements compared to average peer group are high-level estimates and will have to be validated for each customer situation.
With SAP Business Suite
on SAP HANA
Enterprise risk and compliance
Business value for access control role analytics
 Most companies face a high volume
and ongoing increase of unused and
orphaned roles
 Scheduled batch jobs are required to
analyze a transaction log with
millions of records (such batch jobs
usually take hours to complete)
 The cost of ongoing role
maintenance can be high – one
customer estimated active ERP role
maintenance costs at around
US$4,000 annually
 Unused roles and orphaned roles
constitute unneeded access risk to
the organization (and possible
compliance issues).
 Conflicts associated with segregation
of duties (SoD) via continuous
monitoring of access risks.
 Accelerated analysis of role usage
isolates unused and orphan roles
 Deeper insight into roles will help
uncover any potential risk for the
organization
 Role usage and assignment
information provides valuable insight
to business executives during
business reengineering and
reorganization
 Trigger the assigned workflow
directly from your analysis to remove
unused roles assigned to users
 Expose orphaned roles across the
system landscape quickly to begin
the decommission process
Identify
unused and
orphaned roles
Consolidate
Reduce
most-frequently-
used (active) roles
noncompliance and
overall access risk

Today
on SAP HANA
Customer acquisition
Business value for line-of-business (LoB) marketing
 Missed market opportunities due to
lack of visibility and inefficient
processes
 Data explosion, driven by new level
of connectivity of consumers via
mobile devices and social networks
 Data in disparate data sources, which
prevents true 360-degree view of the
customer
 Agile marketing to respond faster to
changing market dynamics and
opportunities
 New analytical and data mining
functionality on Big Data (social
media, predictive)
 Near real-time monitoring and
reporting on marketing performance
 One central place for collecting all
customer data, leading to 360-degree
view of customers in real time
 Precision marketing to personalize
every interaction with the customer
Improve
profitability
0.5%
Optimize
Increase
return on marketing
investments
15%
customer satisfaction
30%

Today
on SAP HANA
Customer management
Business value for LoB sales
 Difficult to distinguish profitable
customers from customer pool
 Inability to identify gaps in sales
pipeline leading to missed targets
 Extracting actionable information from
the enterprise-wide customer
information (Big Data) to maximize the
chance of a sale
 Minimal insight into buying preferences
of customers in social data context
 Easier identification of profitable
customers with account intelligence
analytics
 Faster transaction search capabilities
 Complete transparency into sales
pipeline (such as in commercial
banking) based on real-time
information with unlimited drill-down
functionality
 Real-time analysis of Big Data to
better understand buying patterns
 Real-time access and assembly of all
data including social/sales data
Improve
profitability
0.5%
Increase
Improve
percentage of sales
reps achieving quota
17%
offer win rate

Today
on SAP HANA
 All inbound communications can be
routed to the best resource
Call center
Business value for contact management with interaction center
 High volume of customer records and
interactions result in increased
search times and greater difficulty
locating specific customer records
 Customers demand consistent
service across channels
 When responding to social media
queries, service reps struggle to get
all relevant customer information,
leading to inefficiency and
dissatisfaction
 Searches in the interaction center are
significantly faster, including account
searches, interaction history, and the
customer fact sheet
 Reps can quickly identify customers
and get a complete 360-degree view
in real-time
Increase
calls handled by
call center
6%
Improve
Reduce
first-call resolution
and customer
satisfaction
97%
service cost

Today
on SAP HANA
Finance transformation
Business value for entity close
 Long-running processes
 Time-intensive reconciliations
 Limited time for analysis
 Inefficiencies due to manual
processes and low automation
 Missing financial excellence,
resulting in higher cost of equity
at the capital markets
 Difficulties in supporting parallel
financial reporting standards on a
global basis and in scenario
simulation
 More time for analysis, less over-
time, or earlier publishing of financial
results through faster
period-end processes and better
reconciliations
 Increased efficiency through smarter
reconciliations and reporting,
reducing operating costs and
improving stakeholder satisfaction
 Real-time analytics down to the
lowest level of detail – delivering
quality at source, transparency, and
process efficiencies
Minimize
time to close the
entities’ books
13%
Reduce
Enhance
cost of finance
15%
compliance and
accuracy
18%

Today
on SAP HANA
Performance management
Business value for planning, budgeting, and forecasting
 Planning performance limited to
online analytical processing (OLAP),
staged cubes for transactional and
master data
 Data load performance driven by the
amount of data extracted from SAP
Business Suite
 Reporting, loading, and retraction
performance that limits planning
iterations
 Drill-down within OLAP cubes and
navigation to SAP Business Suite
applications and online transaction
processing (OLTP) data occur within
standard times
 Seamless replication of master and
transactional data from SAP
Business Suite
 Availability of more granular data to
support planning
 Big Data challenge negated, allowing
for faster extract and DataStore
object (DSO) activation times
 Iterative planning and real-time
simulation supported through
improved performance
 Improved performance for drill down
(expand) and consolidation (collapse)
 Fast drill-through and live view of
transactional data in SAP Business
Suite
Improve
service level
performance
Reduce
Minimize
cycle times and
manual effort
9%
operating costs
15%

Today
on SAP HANA
Business value for profitability and cost analysis
 Data latencies and processes delay
impacting the ability to react to
issues/opportunities
 Lack of data depth and user self-
service affecting internal decision
making
 Long-running processes
 Time-intensive data queries
 Mostly manual data analysis
 Substantial amount of effort (time
spent) not directly value-adding
 Suboptimal resource efficiency and
effectiveness
 Timely execution of critical business
processes that supports decision
making and increases the ability to
swiftly act (insight to action) in
dynamic market environments
 Critical transactions and calculations
that run quickly
 Instant response times on queries
 Prebuilt analytics to automate the
data analysis process
 Leaner processes from data capture
through data analysis
 Increased productivity through
process-optimized analytics and
mobile support
Improve
service-level
performance
17%
Reduce
Minimize
cycle times and
manual effort
4x
operating costs

Today
on SAP HANA
Business value for financial and managerial reporting
 Risk of noncompliance due to
unfulfilled audits
 A lot of data; decision-relevant
information not readily available
 Data analysis not supported or
automated
 Long-running batch jobs/reports
 Time-intensive data analysis
 Large number of time-consuming and
non-value-added processes required
to provide access to accurate, up-to-
date information
 Timely execution of compliance-
relevant validation tasks
 Increased end-user satisfaction
(accurate, detailed, visualized, timely,
and actionable information)
 Key critical-path processes and
reports accelerated
 Instant response time on most data
analysis queries
 Workarounds and data latencies
eliminated
 End-user data analysis enabled
through self-service means (via
SAP BusinessObjects business
intelligence solutions)
Improve
service-level
performance
18%
Reduce
Minimize
month-end
closing time
12%
operating costs
17%

Today
on SAP HANA
Collaborative finance operations
Business value for payables management
 Expensive and error-prone manual
process steps
 High cost per invoice due to large
amounts of tasks
 Need to improve compliance and
audit turn-around time
 Inability to determine exact moment
of payment
 Inability to influence cash position
 Inability to understand where control
over invoice-to-pay cycle is lost
 Inability to make use of cash
discounts
 Risk of supply chain interruptions
with key suppliers
 Loss of supplier loyalty, affecting
contract renewals
 Scalable automation of invoice-to-pay
reconciliation process
 Actionable insight with live access to
items in process and
multidimensional insight to AP
process performance
 Extensive control over influence
factors to days payables outstanding
(DPO)
 Optimization of cash position through
precise timing of supplier payments
 DPO lower than net payment terms,
allowing strategic decision making on
payment along cash position
 Additional dynamic discounts able to
be offered or leveraged
Decrease
days payables
outstanding
45%
Optimize
Reduce
working capital
lost supplier
discounts
30%

Today
on SAP HANA
Collaborative finance operations
Business value for SAP Shared Service Framework software for finance
 Vendor, customer, and employee
queries generate a high load on the
shared services organization (SSO).
This demands an extremely efficient
working environment for agents in
the SSO.
 Agents in an SSO spend a lot of time
searching for vendor, customer, and
employee data
 SSOs are under constant pressure to
improve the quality of service and to
lower the costs of providing those
services
 Acceleration of in-box performance
with SAP HANA speeds navigation
within the in-box. This allows the
agents in an SSO to review and
prioritize their work more efficiently
 Faster identification of vendors,
customers and employees allows the
SSO agent to provide more
responsive service, which leads to
improved satisfaction of the agents
as well as their clients
 Reduced costs and faster response
times allow the SSO to meet its
service-level and budget objectives,
and improve their key performance
indicators (KPIs)
Increase
productivity for shared
services agents
15%
Improve
Reduce
employee
satisfaction
overall costs of
delivering services

Today
on SAP HANA
Core human resources and payroll
Business value for payroll processing
 Responses to management ad hoc
inquiries about trends of high-volume
payroll information causes significant
costs to HR IT
 Business users have a very limited
ability to analyze payroll results
 Addressing employee inquiries
around payroll is time-consuming and
expensive activity, while HR is under
pressure to increase the quality of
service provided to employees and to
lower the costs of providing those
services
 HR IT resources freed to focus on
the execution of organizational
strategic tasks
 Thresholds leveraged as a steering
mechanism to optimize business
performance
 Simplification of payroll data analysis
with optimized representation of data
 High-speed read access based on
SAP HANA that slashes need to time
access and analyze critical payroll
information
 Faster response times to employees,
increasing employee productivity
and satisfaction
Increase
productivity of users
responsible for payroll
management
10%
Improve
Reduce
employee
satisfaction
overall costs of
payroll processing

Today
on SAP HANA
Core human resources and payroll
Business value for effective shared services delivery
 Employees direct queries into the
shared services organization and
expect to get prompt, accurate
answers
 SSO agents spend time searching for
employee data using employee
identification
 SSOs are under constant pressure
both to improve the quality of service
provided to employees and to lower
the costs of providing those services
 Acceleration of in-box performance
based on SAP HANA speeds
navigation within the in box, allowing
SSO agents to review and prioritize
their work more efficiently
 Faster employee identification allows
the agent to provide more responsive
service, which leads to improved
employee satisfaction
 Reduced costs and faster response
times allow the SSO to meet its
service-level agreements and budget
objectives, and improve KPIs
Increase
productivity for shared
services agents
14%
Improve
Reduce
employee
satisfaction
overall costs of
delivering services

Today
on SAP HANA
* Visualizations will be delivered as part of HR renewal.
Workforce planning and analytics
Business value for transactional analytics
 Translation of organizational strategy
into HR metrics requiring significant
effort or special expertise
 Decisions often based on hunches
 Difficult to zero in on underlying
transactions from high-level KPIs
 Time-consuming data loads in
traditional reporting tools
 Integrated and personalized cockpits
that provide insight into metrics that
matter most*
 Ability to leverage thresholds as a
steering mechanism to optimize
business performance*
 Powerful predefined workforce and
time management–related KPIs for
managers with the ability to navigate
into details
 Embedded analytics inside business
transactions
 Prebuilt virtual data models for real-
time transactional analytics
 Simplified architecture
Increase
revenue per employee
by using analytics to
identify strategic
advantages
20%
Optimize
Reduce
your business with
reliable real-time
HR data
time and costs of
operational reporting

Today
on SAP HANA
Procurement and order collaboration/collaborative invoice to pay
Business value for operational procurement
 Missing real-time insight into
operational procurement reporting
 Lack of capability to dynamically
create operational procurement-
related reporting in a modern user
interface
 Slow and costly paper-based
processes
 High transaction costs
 Long-running transactions while
posting documents with high volume
of line items
 Frequent errors yielding to maverick
spend
 New configuration options for
procurement analysis
 Modern and easy-to-consume user
interface
 Complete visibility into end-to-end
procurement activities
 Real-time insight and easier-to-
manipulate information
 Accelerated long-lasting processing
of purchasing documents
Increase
transparency
Lower
Increase
procurement
operations cost
17%
process
effectiveness
12%

Next step
Business scenario recommendation and value discovery workshop
 SAP offers a proven methodology and approach to
discover the customer-specific business
improvement areas and quantify value potential.
 We suggest such a workshop with your
line-of-business and IT experts.
 As starting point, we recommend a performance
and usage analysis of your current system.

Reference banks
Summary, validated scenarios
Feasibility
Businessvalue
Legend
LowHigh
Low High
SAP Business
Suite on
SAP HANA
SAP HANA
Applications
SAP HANA
Platform
(Near) real-time
liquidity
optimization
Total income – retail, wholesale, investment banking: US$10 billion
Event-based
marketing
Next-best action/
real-time EMI offer
management
Real-time
simulation of
interest rate
sensitivity
Pricing
Fraud prevention
for retail banking/
fraud analytics
Real-time customer
segmentation and
de-duplication
Single view of
capital across
divisions
Phase – deployment road map
1 Short term
FIN: Real-time liquidity (improving net interest
income, liquidity coverage ratio, net-stable
funding ratio, productivity ratio)
Accelerate fast close (finance transformation)
CRM: Next-best action (cross-sell, up-sell offers that
result in a sale [%], average number of products
per client)
GRC: Fraud prevention (reduce fraud related loss,
increase customer satisfaction levels)
2 Medium term
CRM: Real-time customer segmentation (increasing
customer retention, customer satisfaction level,
operating income)
Interest rate sensitivity (improving net interest
income, customer churn, new customer
acquisition ratio)
FIN: Single view of capital (reduce reserves due to
a more precise risk estimation)
SAP HANA Platform: customer-specific
SAP HANA products: SAP NetWeaver BW on
SAP HANA, high-performance applications (HPAs),
apps powered by SAP HANA
SAP Business Suite on SAP HANA
SAP HANA
use case
SAP HANA use cases mapped to
industry value map end-to-end solutions

Delivering Real-Time Business Value for Banking

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