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Loans Management inSAP Banking Services 5.0

RKT Account Creation

02/2007

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Content

Account Creation

11 Introduction

Origination Interfaces

33

22

Insurance Management

44

Product Configurator

55

66

Conditions & Cash Flow

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OverviewOverview / / ContentContent

ProductProductConfiguratorConfigurator

OriginationOriginationInterfaces Interfaces

AccountAccountCreationCreation

ConditionsConditions& Cash & Cash FlowFlow

InsuranceInsuranceManagementManagement

RKT RKT LearningLearning MapMap

After completing this presentation, you will have anoverview about the content / elements of a loan accountin Loans Management in SAP Banking Services 5.0.

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TerminologyOverviewCreating a ContractAccount Contract Features

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Terminology

Installment LoanA solution that allows borrowers to repay a loan over a specific period of time, on a payment schedule

For loans functionality, the SAP Banking Services 5.0 contains two logical sets of accounts for a loan contract:

Loan Account Contains Master Data and Cash Flow details

Clearing Account Contains Payment Distribution details

Loan ContractA formal contractual agreement established between a lendinginstitution and a borrower

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TerminologyOverviewCreating a ContractAccount Contract Features

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Contract: Overview

Default valuesFixed valuesFeature characteristicsField selection

Bank posting areaBank country & keyPublic holiday calendar

Account holderCard holderCorrespondence Recipient

Product

Business Partner

Contract

Org. Unit

Contract Components:

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Contract Framework

Outside W

orldCentral Contract Element

- Product category

- Product - Product version

- Contract status

- Flow data transferred from

- Live from

- Contract currency

- Public holiday calendars (three)

- Contract description

Specialization "Account

- Bank country

- Bank key

- Account number

- Flag: No check digit calculation

Other Contract Elements

Business partner in the contract

- BP role

- BP number

General ledger

- General ledger group

- Netting group

Posting control

- Posting control group

- Flag: Suppress check

- Flag: Processing account

Limits

-Limit category

- Limit currency

Account settlement

Payment details

General attributes,

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Account Contract Overview

Business Partner

Shows the kind of business partner by category, role, data like name, birth date etc.

Correspondence Recipient

It determines the recipient by way of the business partners in the loan contract.

Condition FixingDescribes a timeline for which conditions are not changed and what is the determinationdate of the used conditions (This features belongs only to conditions that own the proper condition determination settings).

AgreementDescribes the normally limited timeline of an agreement with the bank customer. In the product settings is defined if and how the timeline can be changed. It contains other information like the date of instruction of the customer or the end of the notice lock period. The Agreement owns a status as well.

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Account Contract Overview

Payment Agreement

Describes the agreement of amounts to be paid by a customer.

Payment DetailsContains process related payment information e.g. direct debit.

Financial ConditionsA rule specifying which financial (exact debit interest rate, for example) or date-related(quarterly settlement, for example) consequences result for banking transactions whencertain prerequisites are met (such as credit limit exceeded for X days, account of product category Y). Conditions are normally part of a contractual agreement (conditionagreement) between the customer and the bank and are used by the bank as basis formanaging accounts and cards, for example.

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Account Contract Overview

Cash Flow

The movements of money into and out of a business during an accounting period. Thisincludes all receipts and payments of cash and is an indication of a company's financialstrength.

Billing

Billing (BL) is responsible for handle expected payment items for a correspondingcontract (e.g. loan account) and send this items on an also specified date to a due itemManagement.

Insurance

The Insurance Handler allows to store information about insurances related to loan accounts. The system collects the insurance premiums from the customer and disburses them to theinsurance companys. The Insurance Handler also allows to reconcile the insurance master datawith the Insurance Companies.

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Account Contract Overview

Settlement

The entire functionality with which the interest and charges are calculated in the context of the periodic tasks for all due contracts in a certain settlement period. The resulting obligations between the customer and the bank are posted.

Settlements can be carried out for the following contract specializations:

- Accounts- Cards- Account pools- Card pools- An appropriate settlement frequency can be set for all contracts of a product, or

individually for one contract.

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TerminologyOverviewCreating a ContractAccount Contract Features

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Account Contract: Create Contract

How to create a contract:

Go to Account Management Account Account Master Data Create Account

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Account Contract: Create Contract

Initial Screen

Complete all the fields

Contract Manager specifiesthe organizational unit that is responsible for managingthe contract data.

i

Click this button to continue, after inserting all details

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Account Contract: Create Contract

Basic Data

Enter the Contract Purpose and a Contract Currency

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Create a new agreement

1

2 Specify the Start of Term date in the pop-up window, the duration of agreement and the Period Unit

3 Click to continue

3

Account Contract: Create Contract

Agreement

2

1

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Account Contract: Create Contract

Condition FixingThe Condition Fixing entry occurs as a result of the agreement creation

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Account Contract: Create Contract

Payment AgreementEnter the Installment Amount, Installment Agreement Start, Installment with Interest(yes/no) and the term of the contract.

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Account Contract: Create Contract

Payment AgreementEnter the Installment Amount, Installment Agreement Start, Installment with Interest(yes/no) and the term of the contract.

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Account Contract: Create Contract

BillingThe Billing involves the determination of expected payment items at a specific date during a regular cycle (the bill period).

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Account Contract: Create Contract

LimitsSet capital limit amount

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Account Contract: Create Contract

Additional contract details can be defined on each page of the Create accountSection. Finally save the contract details.

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TerminologyOverviewCreating a ContractAccount Contract Features

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Account Contract: Change Contract

Change Contract

System attributes:Can not be changed manually as they are set by the system

Order attributes:You can only change these attributes using processes or orders (status -> account closure, for example). Orders take account of the mutual dependencies of the functions affected by the operation

Changeable attributes:These attributes are always changeable (but you can exclude them frombeing changed)

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All changes to the account master data are logged The way the change documents are displayed is determined dynamically from the time-

dependent master data of the account contract

Account Contract: Change Documents

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Conditions Model in AM

The respective account product is the link between the conditions and the accountcontract

You use condition groups to apply values to standard conditions and assign them to the account product

You store individual conditions in the account contract

Settlement

Transaction

Event

Debit interest: 11%Overdraft interest: 5%...

Value date: 0 DaysATM withdrawal: 0.10...

Account closure: 3.00Lock EC card: 5.00...

Product

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Account Contract: Individual Conditions

Individual Conditions

These apply for one account contract only and depend onthe standard conditions stored for the product.

They replace the standard conditions. If the time period for individualconditions is restricted, the standard conditions apply after the validity periodexpires.

You can store them at any time in the contract.

The account product must permit the assignment of individual conditions.

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Business-related events for the contract are listed in an overview inthe account master data

Every event refers to a certain time during the "life cycle" of an accountcontract

F002345

22:45:03

G343445

G343445

22:45:03

11:01:410001

Product Change

Contract Start

Last Change0002

0003

01/01/2001

03/25/2002

03/25/2002

Account Contract: Events

Event Description Date Time Author

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Account Contract: Bank Statement

Any number of agreements:- With different time periods- With different bank statement recipients

Options for creating bank statements:- Self-service "on request" (bank statement printer)- Periodically- Both periodically and at bank statement printer

Compulsory bank statement based on a defined period

Event-controlled bank statement (for an account closure, for example)

1 - n bank statement recipients per agreement (1 original / n duplicates)

Balance confirmation as per legal requirement (at least once per calendar year)

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You can define locks separately for features and transactiontype groups/media

You can set a lock directly in the account master record or usingPosting Lock Management

You can set locks corresponding to certain amount intervals

You can store which features the contract processing staff can activate or deactivate

You can store if locks are possible

You make the restriction in the product

Account Contract: Features and Locks

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Account Contract: Condition Fixing

This represents the duration for which the Commitment capital and the conditions assigned to a contract takes effect

The following data must be entered during loan contract creation:

Start of term Term

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Account Contract: Payment Details

Payment Instructions can be stored on the loan contract level.

The following details must be entered on the loan contract:

Payment details type Bank country key Bank key Bank Account number Account holder Name

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Account Contract: Insurance Link

The purpose of the Insurance Link is to display the insurance policieslinked to a Loan.

The following details are displayed on the loan contract: Insurance company name Insurance policy number

A business partner in the role Payer / Policy Holder must exist

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