-
Solution in Detail
2013 SAP AG
Banking
Flexible Financial Lending
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2013 SAP AG or an SAP affiliate company. All rights reserved.
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1 / 22 2013 SAP AG or an SAP affiliate company.
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Implement Financing Innovations
Commercial lending customers range from
start-ups with thin credit to global corporations
with adequate funding options.
Several economic downturns and the global
financial crisis have led to tightened access to
lending. Banks have raised lending rates in
response to higher funding costs, anticipated
loan losses, and the impending implementation
of Basel capital and liquidity standards.
Small businesses rely on external funding to
operate and expand, but their vulnerable and
volatile revenue streams make them a high
financial risk. This reality has had a dampening
effect on response time, approval rate,
and price.
Banks are reassessing the risks of lending to
specific sectors that account for a dispropor-
tionate share of impaired loans. For example,
many have scaled down exposure to the
commercial property sector. On the mortgage
lending front, credit approvals and the loan-to-
value ratio are falling because an inordinate
number of houses are under water worth less than the loans made on them.
Commercial banks must provide flexible end-to-
end business processes to accommodate highly
individualized customer needs and manage risk
exposure while complying with changing
regulations.
One IT solution needed using
SAP software
Source: SAP/ING Real Estate
Finance (BTS)
Since the global financial crisis, banks have been striving to rebuild trust and create
value. They focus on managing risk exposure, work to improve risk-adjusted
profitability, and offer custom financing for new credit needs. Flexible Lending Operations
Financing Innovations
SAP Innovations
Loan Management
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2 / 22 2013 SAP AG or an SAP affiliate company.
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Businesses rely on banks for financing and
they expect risk-adjusted pricing, lending pro-
cesses tailored to their needs, compliance with
regulations, and reduced closing times and
costs. Banks must have a centralized view of
the overall customer relationship.
Furthermore, customer-specific credit apprais-
als, flexible credit lines, cross-asset-class
collateralization of liabilities, and refinancing of
asset portfolios are essential building blocks of
the commercial lending business.
Our commercial lending solutions offer
comprehensive support for complex high-value
lending with powerful parameter definitions,
integrated customer information, credit line
setup, comprehensive loan servicing, collateral
management, and receivables refinancing.
Our banking software is based on service-
oriented architecture, integrates readily, and
supports a high level of automation and
streamlining, helping banks maximize their
resources.
Build Flexible Lending Operations
Banks need end-to-end support of lending processes with a high degree of
flexibility to accommodate highly individualized customer needs.
Executive Summary Solution Overview Contact Us
Flexible Lending Operations
Financing Innovations
SAP Innovations
Loan Management
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3 / 22 2013 SAP AG or an SAP affiliate company.
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Banks must maximize their resources and streamline operations to adapt to the
pressures of lower production volume and greater loan maintenance expenses.
Banks can leverage integrated SAP solutions for use in commercial banking
to meet the credit needs of all their customers, from global conglomerates to
start-ups.
Manage Loan Portfolios Effectively
Increase flexibility and time to market through powerful product-configuration capabilities
Reduce operational cost by cutting redundancies and increasing process automation
Mitigate risk with a 360-degree customer view, collateral management, and supporting business processes
Increase liquidity with a securitization solution
80% Improvement in time to
market
Source: SAP/ING Real Estate
Finance (BTS)
Executive Summary Solution Overview Contact Us
Flexible Lending Operations
Financing Innovations
SAP Innovations
Loan Management
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4 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
Analytics
Transaction and customer servicing separate
the best from the merely adequate banking
providers, but banking providers with analytics
and the ability to exploit Big Data efficiently and
effectively will thrive in uncertain markets.
Database and technology solutions, including
the SAP HANA platform, help banking experts
analyze large amounts of data gathered from
all commercial banking activity and transferred
to the analytical system over standard
interfaces.
Applications
The SAP NetWeaver technology platform gives
banks a cost-efficient and system-independent
foundation for high-availability functionality on a
scalable architecture. Ease of integration is
facilitated with service-oriented architecture and
rich standard interfaces. The SAP for Banking
solution portfolio is aligned with published
Banking Industry Architecture Network (BIAN)
standards.
Mobile
SAP solutions include support for an end-to-
end mobile strategy that enables mobile access
to lending operations for the bank and its
customers.
SAP Innovations
Our commercial lending solutions leverage emerging technologies to enable
a rapid response to market dynamics, products tailored to a wide spectrum of
customers, real-time banking, multichannel accessibility, support for multiple
currencies and countries, and scalability for business growth.
Executive Summary Solution Overview Contact Us
Flexible Lending Operations
Financing Innovations
SAP Innovations
Loan Management
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5 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
Support Operational Efficiency
Loans Management
Enables mapping of various lending instruments with flexible product definition. It
offers high-level possibilities for individualization in product offerings and efficient,
end-to-end support for loan processing.
Collateral Management
Enables effective handling of collaterals by supporting the end-to-end process that
links origination, servicing, and credit risk management plans through provision of the
right information.
Funding Management
Enables securitization of assets with flexible structuring and centralized portfolio
management of assets and transactions.
Executive Summary Solution Overview Contact Us
Solution Overview
Loans Management
Collateral Management
Funding Management
Why SAP?
Commercial Banking
Operation
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6 / 22 2013 SAP AG or an SAP affiliate company.
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Our commercial lending solu-
tions offer comprehensive
business process support with
operational efficiency to help
banks differentiate from the
competition.
Commercial Lending Operations
Executive Summary Solution Overview Contact Us
Solution Overview
Loans Management
Collateral Management
Funding Management
Why SAP?
Commercial Banking
Operation
Database
and
Technologies
Sales and
Service
Commercial
Banking
Operations
Loans Management Funding Management Collateral Management
Origination
Payment
Management
Provisioning
Handing Over to Operations
Facilities
New Business Position
Management
Originating
Collateral
Managing
Collateral
Structuring of
Transactions
Monitoring and
Liquidating
Collateral
Funding Portfolio
Management Reporting
Transaction Analysis Based on SAP HANA
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7 / 22 2013 SAP AG or an SAP affiliate company.
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The solution for loans management helps
banks cater to businesses from small and medium enterprises to large corporations within a single platform. It supports multiple
types of lending instruments from simple bilateral loans to complex, highly individualized
big-ticket loans and credit facilities.
It enables exhaustive back-office processes
with a high degree of flexibility, resulting in
efficient and effective transaction processing.
Smooth integration with other components
helps banks reduce process and data
redundancy and increase straight-through
processing.
Our solution for loans management
offers comprehensive functions to
address all commercial credit needs.
It offers a flexible framework to offer
tailor-made financing quickly and
efficiently.
Loans Management
Capabilities
Loans Management
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
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8 / 22 2013 SAP AG or an SAP affiliate company.
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A powerful product configurator coupled
with flexible pricing parameters, calcu-
lation methods, and payment processes
supports a wide range of commercial
lending loan products. A credit facility
framework enables definition of sub-
ordinate credit lines.
Real- and near-time data integration with other
SAP software that supports financial accounting,
loan origination, collateral management,
refinancing, and treasury operations helps
ensure end-to-end coverage, increased
straight-through processing, and reduced
dependency on diverse IT systems.
Extensive application interfaces based on
service-oriented architecture technologies
enable additional customer-specific process
support.
Lending with Operational Efficiency
Capabilities
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
Loans Management
Support of loans given and taken, flexible
payment processes, payment postprocessing
functions, and rich business-operation categories
help ensure complete support of the loan
lifecycle.
Central management of information gives a
360-degree view of the customer relationship
and supports compliance demands and risk
exposures.
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9 / 22 2013 SAP AG or an SAP affiliate company.
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With flexible parameter definitions and automa-
ted process support, the solution handles a wide
range of lending instruments on loans given and
taken. It is scalable, can adapt to a wide lending
base from large corporations to small and midsize enterprises in niche markets and has functions for multiple channels, languages,
banks, and countries coupled with functions for a
credit line facility.
Customized reporting options and data upload
to analytical systems facilitates access to action-
able, consolidated information that helps banks
predicate customer needs, increase cross-selling
success, drive higher retention, and win new
customers.
A simple implementation cycle, native integration
with other SAP software, and redundancy reduc-
tion lower the total cost of ownership and help
banks differentiate from the competition.
A breadth of product and service offerings, pro-
cess simplification, and less decision time can
win new business, increase customer wallet
share, and gain market share.
Use of a single lending application helps
leverage flexible loan-servicing features,
traditionally exclusive to large corporate
lending, to design differentiating products
for small businesses.
Adapt to the Evolving Financing Needs of
Commercial Clients
Capabilities
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
Loans Management
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10 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
Large amounts of transaction data gathered
from commercial lending activities can be
smoothly transferred to analytical systems over
standard interfaces. With the adoption of SAP
Business Suite software on the SAP HANA
platform, banks can now exploit Big Data and
increase efficiency with granular, real-time
predictive updates on operations and risk.
Visualization of actionable information on
bankers dashboards further enhances data consumption.
Breakthrough technologies help banks
adapt to changing regulations and
economic volatility with transparency
and agility.
Innovations for Loans Management
A 360-degree view of the customer relationship
with the bank, payment history, and collateral
status results in better decisions, risk
mitigation, and improved loan portfolios.
Capabilities
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
Loans Management
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11 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
The collateral management solution minimizes
manual processing and provides flexible
functions to map simple and complex relation-
ships between receivables, collateral assets,
collateral providers, and collateral assignees.
It complies with regulations such as Basel II,
and easily integrates with operative transaction,
risk management, document management, and
reporting systems.
The centralized solution provides a timely,
aggregated view of collateral activities across
the institution. Process-support tools help lead
to efficiency in workflow features, correspon-
dence tools, and links to optical archives.
The SAP Collateral Management
application gives banks the front- and
back-end support they need for efficient
collateral-handling and risk mitigation.
Collateral Management
Capabilities
Collateral Management
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
75% Increase in process automation
and auditability for easier
collateral tracking and reporting
Source: The Land and Agricultural
Development Bank of South
Africa (The Land Bank)
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12 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
The solution offers flexible functions for
administering collateral agreements,
collateral amounts, encumbrance, and
declaration of purpose and supports
maintenance of relationships between
assets, transactions, and collateral
agreements.
Parameterization can be used to adapt to
extensive lists of predefined collateral agree-
ments. Handling of collateral processes like
assignment and full and partial deletion is
supported, including related calculations like
collateral cover distribution, loan-to-value
ratios, free collateral calculation, and collateral
shortfalls.
It complies with market regulations like Basel II.
Centralize Cross-Asset Collateral
Capabilities
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
Collateral Management
50% Improvement in manageability
of complex collateral for
accurate monitoring of value
and risk
Source: The Land and Agricultural
Development Bank of South
Africa (The Land Bank)
Integrated object-management features can
store and value fine-grain data for collateral
objects and connect to external collateral-object
systems.
A 360-degree, real-time customer view provides
complete lists of loans, deposits, and collaterals
across the IT landscape. It provides flexibility to
set up preapproved collateral coverage gaps to
preferred customers.
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13 / 22 2013 SAP AG or an SAP affiliate company.
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A centralized collateral solution helps banks ad-
dress new challenges from the global financial
crisis like higher volumes of collateralized loans, new security classes as collateral, and compliance
with new regulations.
The solution supports firmwide, flexible reporting,
including collateral shortfalls and composition of
multiasset collateral for internal risk management.
Managing collateral as a common service across
all asset classes reduces process redundancy and
costs and enables centralized capture and
management of collateral-related information with
respect to risk exposure across counterparty
relationships, products, and geography.
By running the collateral lifecycle from origination,
to middle office, and to back office on a single
platform, the solution helps banks streamline
credit approval processes while complying with
credit risk regulation.
The solution helps banks reduce regulatory
capital requirements by providing high-fidelity
data for Basel II regulations.
Within collateralized transaction credit
limits, banks can do more business,
price trades competitively, reduce
economic and regulatory capital, and
achieve higher risk-adjusted return on
capital.
Optimize Financing Operations with Collateralization
99% Loans with complete collateral
information
Source: SAP/ING Real Estate
Finance (BTS)
Capabilities
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
Collateral Management
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14 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
Both market participants and regulators
increasingly focus on reducing counterparty
risk and improving liquidity profiles. The
reduction in unsecured credit lending has
resulted in a surge of asset types and volume
under collateral management.
Centralized collateral management, including
use of the SAP HANA platform, helps banks
come close to achieving real-time management
of exposures and predictive risk analysis.
Innovations for Collateral Management
Analysis and visualization of actionable data on
collateral shortfalls and collateralized counter-
party exposure help enable banks make
informed decisions and comply with
regulations.
Capabilities
Benefits
SAP Innovations
Solution Overview
Help for banks to address the chal-
lenges associated with growth and the
accompanying complexity of secured
lending.
Executive Summary Solution Overview Contact Us
Collateral Management
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15 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
SAP Funding Management provides a central
collateral allocation management to improve a
financial institutions funding business and increase transparency.
The SAP Funding Management
application helps banks and financial
service providers get transparency to
use all available assets for collaterali-
zation in asset-based funding deals
like securitization.
Funding Management
Capabilities
Funding Management
Benefits
SAP Innovations
Solution Overview
Executive Summary Solution Overview Contact Us
The application provides business functionality
for securitization, covered bonds, asset-backed
loans, pool syndication, and other funding deal
categories.
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16 / 22 2013 SAP AG or an SAP affiliate company.
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Central Asset Warehouse
From the funding viewpoint, contracts can be
stored and handled in multiple asset classes,
and the asset warehouse can serve as the
transparent funding ground of all fundable
assets.
Pool Management
Funding programs can be set up on top of the
funding ground. Assets are allocated automat-
ically based on selection criteria and can be
refined with further selection criteria or a simple
sampling algorithm. Qualified pools scan be
reserved for offer to investors, split and
refinanced, or customized into different
funding types.
Transaction Processing
If a funding transaction is fixed, processing of
the asset pool and the investor deal starts.
Asset events are monitored according to
deal type.
Accounting
The funding solution is integrated into the
SAP General Ledger application.
Integration
SAP Funding Management integrates with
SAP Business Suite and is open to any other
SAP or non-SAP asset holding software.
Address Collateralized Funding Demands
Capabilities
Benefits
Solution Overview
Executive Summary Solution Overview Contact Us
Funding Management
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17 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
Banks can lower operational costs by managing
all qualified loan or leasing assets as collaterals
in one central funding solution. Full transparency
of unfunded assets makes them available for
future funding deals.
The solution helps minimize implementation
cost with prebuilt business functionality for
covered bonds, securitization, and other asset-
backed funding deals.
Banks can provide highly qualified asset port-
folios to investors. Whenever the collaterals of
a pool change, the solution can automatically
replenish the pool based on predefined criteria
and send a notification to the investor.
Banks gain new business and improve investor
retention and loyalty by offering transparent
and collateralized deals.
Achieve transparency of all collaterali-
zation functions, lower cost, and
increase flexibility in the refinancing
business.
Optimize Funding and Reduce Refinancing
Processing Cost
Capabilities
Benefits
Solution Overview
Executive Summary Solution Overview Contact Us
Funding Management
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18 / 22 2013 SAP AG or an SAP affiliate company.
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Commercial Lending An Integral Part of Our Solutions for Commercial Banking Operations
Executive Summary Solution Overview Contact Us
Solution Overview
Loans Management
Collateral Management
Funding Management
Why SAP?
Commercial Banking
Operation
SAP solutions address key requirements of
commercial banking operations
Customer and
Product
Management
Centralized
Payment
Processing
Cash Position
Management
Loans
Management
Customer
Liquidity
Optimization
Collateral
Management
Funding
Management
Customer and
Product
Management
Full-Service
Leasing Contract
Management
Lease
Accounting and
Finance
Cash and
Liquidity
Management
Commercial
Lending
Leasing
Customer
Onboarding
Exchange
Financial
Messages
Monitor
Financial
Services
Network
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19 / 22 2013 SAP AG or an SAP affiliate company.
All rights reserved.
Why SAP?
Our banking solutions leverage technology innovations to provide fast responses to
market dynamics; real-time visibility of customer and regulatory demands; and low-
cost, highly scalable, and flexible deployment options.
Comprehensive Enterprise Support
Our commercial lending solutions deliver integrated business processes and applications on a
unified platform with comprehensive business insight.
Efficient process orchestration and business process flexibility enable banks to deliver
differentiated products and services.
Leveraging Key Breakthrough Innovations
The SAP solution portfolio leverages the industrys most innovative technologies. It combines solutions for database and technology, mobile, analytics, and cloud-based deployment options to
enable optimization and efficiency at the lowest possible cost.
Proven Time to Value in Large-Scale Implementations
The SAP solution portfolio provides banks with a proven implementation model to mitigate risk and
to achieve a quick time to value.
Executive Summary Solution Overview Contact Us
Solution Overview
Loans Management
Collateral Management
Funding Management
Why SAP?
Commercial Banking
Operation
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20 / 22 2013 SAP AG or an SAP affiliate company.
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Executive Summary Solution Overview Contact Us
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Solution in Detail
Banking
For more information, visit us at:
www.sap.com/industries/banking
http://blogs.sap.com/banking/
http://twitter.com/sapforbanking
www.facebook.com/sapforbanking
Executive Summary Solution Overview Contact Us
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2013 SAP AG or an SAP affiliate company. All rights reserved.
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2013 SAP AG or an SAP affiliate company. All rights reserved.
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