by Logan Skibbe – Senior Consultant at ConVista Spain
During the last years the term SAP for Banking has been heard frequently, but hardly perceived when talking about Bank specific applications. However, for more than a year now, it seems that SAP this time really breaks into the Banking Market.
SAP offers a wide and sophisticated range of products to meet the specific needs of the BankingIndustry.
It’s quite easy to get lost in this solution jungle and the common practice of SAP to name and rename their products does not really help. In one tech blog someone even raised the question if the Bank Analyzer “is just too complex to work with”. It is correct that it has dozens of different functionalities and at first sight you might feel swamped, but after a closer look you will see what a powerful and mature tool SAP has created.
Let’s get started with the big picture and then break down and focus on the Bank Analyzer. With BankingServices SAP provides an industry solution that offers a variety of applications covering the whole value chain.
I think most confusion starts with the fact that certain functionalities and even old-established ERP components are suddenly presented as a proper bank specific solution.
So let’s outline first what is really meant by SAP Banking Services. Of course you will find Sales, Accounting or Compliance topics branded as banking products – but these in the end are cross industry solutions. So what is really Bank specific?
The two main blocks that are combined on the Banking platform are Operational Banking (meaning Core or Transactional Banking) and Analytical Banking.
Maybe this picture is more familiar to you:
So for Banking Services, let’s exclude all Business Support Modules and focus on SAP Core Banking Modules:
Contrary to the ERP Solutions SAP-CML and SAP Deposits, the two modules DM/LM are included within the Banking Services Platform with its own runtime environment and full integration from an accounting architecture point of view.
The other Pillar for SAP Banking Services is Analytical Bankingwith its apparently own modules (see picture above). And here is where the drama begins. Does this graphic imply that there is a designated module for Risk, Accounting or Asset/Liability Management? Of course solutions such as Governance, Risk and Compliance (SAP GRC) or Business Objects partly cover these areas, Risk, Regulation and Analytics, but in this case there is a Bank specific Tool which unifies these Business functions within one single Solution – the Bank Analyzer.
“SAP Bank Analyzer provides a modular, service-oriented, integrated finance and risk architecture (IFRA). It supports overall bank controlling by calculating, evaluating, and analyzing financial products.” (Source: SAP). This is the part where the Bank Analyzerlives up to its name – Analyzer. However, in addition, it is also the designated Sub-ledger for Bank specific products, following the approach of a fat Sub-ledger with all transactional detail and a thin General Ledger with aggregated data.
Does Bank Analyzer also equal to Sub-ledger for Banking? Maybe it is this unfortunate naming that puts this powerful tool in the analytical on-top corner and suppresses its real capabilities.
When deep diving on the Bank Analyzer – in expert articles, blogs, service provider offerings or even SAP in-house documentation – you will often find the same spoon-fed descriptions and images, which in my opinion are little concrete and leave this jack of all trades device in the nirvana of functional specifications. To break it down and make this tool tangible, the main application areas for the Bank Analyzerare:
In the next posts we will get into detail and explain what’s behind each of above mentioned functionalities – for now I just want to give a basic understanding, so this black box loses its mystery.
Let’s also scan and skim the general layer model (next illustration) – or so called Integrated Finance and Risk Architecture (IFRA), which provides a single point of truth and ensures that original data, methods and valuation results are clearly separated.
Let’s focus on the above mentioned core areas Accounting and Risk and their respective Architecture.
At first sight both figures above might look packed, but they illustrate pretty good the main components of the Bank Analyzer and map the Accounting and Risk functionalities to the respective data layers.
In the Accounting Architecture for example you can follow the data flow, coming from the core systems, such as Deposits or Loans and other source systems, being stored in the Source Data Layer (SDL) as primary objects.
The marked components in light blue in the Process & Methods Layer (PML) are the actual centerpieces, containing the accounting and valuation rules for creating postings, validating and enriching the data.
Via the Results Data Layer (RDL) and the GL Connector within the Analytical Layer, (AL) the financial data is prepared and aggregated before handed over to the General Ledger.
Same scheme applies to the Risk Architecture, whereas the focus here is on Credit Risk and meeting Basel II requirements and other risk related functionalities such as the calculation of a vast number of key figures, stress testing and the Limit Manager.
In the next posts we will see both Architectures and their specific functionalities more in detail.