SAP Financial Services Network – Presentation for Banks

SAP Financial Services Network

Summary Overview

August 2015

Cloud

Abundance of cost-

effective computational

power and storage

Mobile

The new de facto

standard in business

interaction

Transformational technologies offer significant potential to

drive business innovation, relationships and integration

Social

Connected business

and social networks

Big

DataReal-time analytic

for behavioral and

predictive insights

More than 60% of CEOs expect 15-50% of their

earnings growth in the next 5 years to come from

technology-enabled business innovations.

– McKinsey study, 2013 ”“

Business NetworksA digital economy operating in the cloud driving real-time business relationships and processes

© 2015 SAP SE. All rights reserved. 3

SAP End-to-End Treasury and Risk ManagementTreasury Solution Map

Payments and Bank

CommunicationsPayment Operations

Monitoring and Status

TrackingPayment Factory Bank Connectivity

Cash and Liquidity

ManagementCash Position Bank Account Management*Electronic Bank Statements

Debt and Investment

Management

Financial Risk ManagementRisk Identification

Type and Origin of Risk

Risk Quantification

Exposure MgmtRisk Analysis

Risk Management

Hedge with Financial Instruments

Treasury Solution Map, Edition 2014

Workflow and Signatures

Liquidity Management

Front Office

Deal capture

Mid Office

Risk Controlling

Back Office

Correspondence & SettlementAccounting

Foundation Cloud Analytics MobileRapid Deployment

Solutions (RDS)HANA Platform

Suite Capabilities Shared Service CenterWorking Capital

ManagementGovernance Risk and Compliance Commodity Risk Management

58% Lower treasury cost

28% Lower cost of capital


Key Elements to Seamless Bank Connectivity & Integration

• Allow participants to achieve benefits of

integration when not all partners are at the

same level

• Ensure extensibility to multiple financial

supply chain partners with new connectivity

and security requirements

• Deliver integration directly into core

business processes at the company

• Create foundation for value added services

to enhance value of single solution

Monitoring & Analytics



SAP ERP

AP/AR

Payroll

Treasury

In house

cash

Aggregate

Payments

Approval

Worklist

Exception

Handling

Status

WorkflowFSN Connector

ERP

IntegrationMessaging

Management

Multi-bank

Transaction

Routing

Monitoring &

Alerting &

Analytics

Approval

Workflow

SAP FSN

Connectivity

Security

Mapping

Routing

Monitoring

StatementsPayments

Statements

Payments

A complete end-to-end ERP to bank incoming and

outgoing process integration solution, benefiting

all key areas. Operations:

End to end payment & status

Tracking

Enhanced payments & statements

management

Lower manual intervention

Payment process performance

tracking and alerting

Treasury:

Centralised Visibility & Audit

Approvals Workflow

Bank Process Performance

Analytics

Higher STP, lower incidents

Global payments

Future value servicesIT

Full multi-bank on-boarding and routing

Technical tracking and monitoring

Reduced Complexity / Low Running Cost

Security and Audit

Message Format Management

Single Support Point


S4HANA

GL

Payroll

Treasury

In house

cash

Aggregate

Payments

Approval

Worklist

Exception

Handling

Status

WorkflowFSN Connector

ERP

IntegrationMessaging

Management

Multi-bank

Transaction

Routing

Monitoring &

Alerting &

Analytics

Approval

Workflow

SAP FSN

Connectivity

Security

Mapping

Routing

Monitoring

StatementsPayments

Statements

Payments

FSN & S4HANA Integration

Secure and auditable end to end

Enhanced bank relationship analytics

Proactive monitoring and alerting

Future proof SAP solution strategy

Complete on-premise and corporate bank to corporate

process integration

Full multi-bank connectivity


FSN: The financial services gateway to SAP Business Networks:

Simplify business collaboration across the financial services industry

Business Network

Risk &

Sustainability

Workforce

Management

Sales &

MarketingFinance

Travel &

Expenses

Discover

Connect Collaborate

Gain

Insights

SAP BusinessNetwork

Your

Company

Your Company

Supply Chain

Management

Sourcing &

Procurement

Financial

Services

Industry


Seamless STP from corporate to bank value chains will facilitate

value-added Services in the future

Straight through processing of Payments in

Corporate ERP

Reconciliation and clearing of open items

Managing Accounts Receivables

Updating Cash Management/Treasury Function

Updating Bank Accounts in ERP-system

Corporate Bank

Value-added services through Visibility into

Corporate Value Chain

Payments Product

processing

Account

and risk

mgmt

GL posting

and

reporting

Compliance Enablement

via Mobile

Working Capital Management

Dashboard

Balance Sheet FX Exposure Invoice Discounting

Cashflow

forecasting

Cash

positioningRisk

managementPurchasing

and Sales

Short-term

investment

& funding

Payments &

CollectionsCloud


SAP Business OneConnected business platform – key functions

Financials Sales Service Purchasing Inventory Production

• Financial reports

• Budget management

• Cost accounting

• Payment run

• Fixed Assets

• Opportunity and pipeline management

• Contact management

• Purchase orders

• Invoices

• Service management

• Service contracts

• Mobile interaction

• Knowledge database

• Purchase requests

• Purchase orders

• A/P invoicing

• Workflow

• Item lists

• Price lists

• Goods receipts

• Inventory transactions

• Bills of material

• Production dashboards

• Lifecycle management

• Forecasts

SAP Business One client MobileAnalytics and

dashboards

Multiple languages and

localizations


Banks have High Costs and Inability to Scale their Business

Typically 3- 10 months required

to integrate each corporate

expensive IT resources for

implementation and support

Lack of agility, inability to offer

new services

Costly maintenance of multiple

versions, multiple point-to-point

connections

Inability to scale to thousands

Banks

Corporates


Corporate Connectivity Increased Risk and High costs

Multiple failure points and/or complex

infrastructures

Implementation, operational and

development costs

Inability to manage counterparty risk

Reconciliation cost and capability

Lack of financial messages visibility and

control

Difficulties in managing working capital

across multiple banking relationships

ERP

Banks

Corporate clients

Banking Systems Banking Systems

Corporate clients

ERP

ERPERP




Data mapping and process integration

Secure, private SAP-Hosted platformP

aym

ents

Mark

et

data

Maste

r data

Reconcili

atio

n

Rem

itta

nce d

ata

Analy

tics

Oth

er

serv

ices

Virtu

al card

s

Sta

tem

ents

paym

ent

advic

e

Busin

ess

monitorin

g

Banks, Card Providers, and

Market Data Providers

Payment

processing

Accounts

payable

automation

Card solutions

Cash

managementMarket data

Trade finance

Core Finance

Risk and Regulatory

Receivables management

Payables management

Shared services

Treasury and financial

risk management

Accounting and financial close

SINGLE integration to the financial institutions

EASIER access to new services

ZERO footprint and cost-effective model

OPTIMIZED cash flow and budget allocation

Extends corporate finance functions transacting with financial provider services




Data mapping and process integration

Secure, private SAP-Hosted platformP

aym

ents

Mark

et

data

Maste

r data

Reconcili

atio

n

Rem

itta

nce d

ata

Analy

tics

Oth

er

serv

ices

Virtu

al card

s

Sta

tem

ents

paym

ent

advic

e

Busin

ess

monitorin

g

Banks, Card Providers, and

Market Data Providers

Payment

processing

Accounts

payable

automation

Card solutions

Cash

managementMarket data

Trade finance

Medium Enterprise (SAP

sFIN)

Large Enterprise (SAP ERP

and NON-SAP)

Small Enterprise (SAP

Business One)

SINGLE integration to the financial institutions

EASIER access to new services

ZERO footprint and cost-effective model

OPTIMIZED cash flow and budget allocation

Extends corporate finance functions transacting with financial provider services


Corporate View: FSN Delivers Value AccelerationFSN Business Cockpit for your banking relationships

• Central Business Cockpit for

payments visibility, status

monitoring and matching.

• Performance target KPI’s

• Mobile device enabled

• Batch to payment

transaction drill

through

• Approvals according

to rule definitions

• Performance tracking for

each phase of payment

life cycle

• Historical view of

performance over time


Value Services for the FutureProviding Banks & Corporate’s the ability to rapidly deliver and consume new services


Enhancing the Corporate to Bank Relationship

Value Added Services delivered by Banks…

Supplier Financing

Risk-based lending

FX Services

Virtual Card Solutions

Policy Management

Consolidated Position Management

Bank Payment ObligationAutomation of traditional Letter-of-Credit for high-volume trade

services

Create new & manage existing facilities for single

or multi-currency purchases/payments

Visibility to balance sheet and cash flow for risk-based lending decisions, e.g. to SMEs

Active cash position management across short-term funding opportunities e.g.

overnight term deposits, investment opportunities, sweeps, etc.

Payables management through fee-based credit services, either bank private-

label or co-branded with major card providers

Create new & manage existing facilities for single or multi-currency purchases/payments

Execute any cross currency payment requirements

using single currency customer account, enrich FX

format for country specific requirements


FSN Enhances the Bank-to-Corporate Customer Relationship

Single connection from bank

to any number of corporates

SAP takes care of on-

boarding corporates via rapid-

deployment solution (RDS*)

Pre-packaged* installation,

configuration, testing

Bank integration deep into AP, AR, Treasury

Enables bank revenue growth by scaling corporates

A/P optimization* via vendor

master data, centralized

monitoring

A/R optimization* via rich

remittance, match and merge of

bank statements for “touchless”

reconciliation

Bank’s value-added* services

No IT footprint – no new

hardware, software,

middleware required at

corporate

Scalable “pay-as-you-go” cost

model

Format independence

Removes the IT cost barrier for new bank services

*Roadmap Items

FSN Solution

Features and Functions

The SAP Solution

SAP | 18

Connectivity• sFTP

• Web Services

• Web Services Reliable Messaging

• FSN Connector for SAP ERP 6.0 EHP0+

• Multi-back end connectivity

Message Handling• Mapping and Transformation

• Aggregation and Splitting

• Multi-casting

• Routing

• ISO, MT and Bespoke Handling

Operations• Global Availability

• 24/7 and Follow the Sun Operations and Support

• Dedicated On-boarding team

• Message Maintenance

FSN Business Cockpit• Payments Monitoring

• Payment Status Matching

• Statement Confirmation

• Payment Approvals and Rule Definitions

• Payments Process KPI Tracking

FSN as a Network• Multi-bank on-boarding

• Multi-bank routing

• Multi-subsidiary on-boarding

• Test and Production Environments

Security• Payload Signature and Encryption

• PKCS7

• PGP

• Digital Signatures

• Security Mediation

Roadmap*• Upload/Download Portal

• Remittance Handling

• Additional Message Types including:

• FX

• Trade

• etc.

• Payment and Statement Process Analytics

*Planned but not committed


Why a fully integrated SAP solution fits

Network Solutions

Independent Service

Providers

Bank Connectivity

Solutions

Bank ERP Integration

Solutions

BCM & SAP Financial

Services Network

19

Connectivity SecurityMulti-bank

Formats & RulesValue Services

Pain-point Value

Integration

BCM & FSN is the only solution to cover all key requirements.


SAP Financial Services NetworkOn-board only once and add services and partners over time

FSN On-boarding

Connect to network

Agree message mapping

requirements

Perform on-boarding tests

Sign-off testing

Bank Activation

Request connection to

FSN network partner

Perform E2E connectivity

testing

Finalise service activation

Run and Manage

Monitor, manage and

deliver financial messages

Grow FSN network

connections

Add new banks & services

Bank


Connecto

r

ER

P

Corporate

TestTestTest

Production

Test

ProductionProductionProduction

Connecto

r

ER

P

BankCorporate

Preparation Activities

Questionnaire & Pre-reqs

Prioritization

Scope finalization

Project Planning

Kick-off


Financial

InstitutionsCorporate

FS

N C

on

ne

cto

r

Bank

SAP HANA Cloud Platform

FI

Data Mapping & Process Integration

BC

M

SAP ERP

Payment Initiation

Payment Status

Bank Statement

Payment Initiation

Payment Status

Bank Statement

*Business

Cokcpit

Payments & Statements FSN End to End Message

Choreography

1. Bank Transfers/Credit Transfers/Direct

Debits generated from HR, FI or

Treasury modules

2. Payment Run generates secure

payment medium in FSN DMEE Tree

format

3. Payments made visible in BCM and

FSN Business Cockpit

4. Payment payload mapped in FSN to

ISO format or FSN Lite Member format

5. Payment sent to Bank in FSN and

mapped to FSN Enterprise Member

desired format

6. Bank returns payment status and

statements, which go through reverse

procedure for required formats

1 2 3

4

3

5

6

1

2

3

4

5

6

Any Input

FSN Canonical Message

Standard Output

Message

format

management

FSN Message Library

contains standard

mapping cartridges

Bespoke to Standard

Mapping capability and

vice versa

SAP Business Suite Integration for SAP Financial Services Network rapid-deployment solution

With this rapid-deployment solution, you can quickly connect your SAP Business Suite system to the cloud-based

Financial Services Network, secured, owned and managed by SAP and providing pre-configured content for the

payment process.

On-premise to Cloud IntegrationRapid Deployment Solutions accelerating cloud deployment

Co

re

Payment Initiation and Bank Statements

Based on FSN Connector Add-On

Installation and configuration of SAP FSN

Connector for three-tier systems

Set up security and web service communication

Configuration of payment formats for: PMW,

ALE/IDOC and File pickup

Configuration for inbound bank statements

SAP ERP configuration including review of SAP

ERP FI payment mediums, payment methods,

house banks, or statement customization, if

applicable

Op

tio

na

l

BCM - Bank Communication Management

integration*

Based on FSN Connector Add-On

Basic configuration and customizing of Bank

Communication Management

Enabling Payment status updates and approvals

Configuration of bank statement monitor

SAP | 22

Corporate Bank

SAP HANA Cloud Integration

SAP HANA Cloud Platform

Payment Initiation

Payment Status

Update

Bank Statement

SAP ERP / S4HANA

SA

P F

SN

Co

nn

ecto

r

Ad

d-o

n

FI

*optional

Payment Initiation

Payment Status

Update

Bank Statement

Financial

Institutions

*BC

M



The Corporate To Bank Flow Example

Corporate

Corporate

Bank

Bank

Canonical Mapping

Canonical

Format

Canonical Mapping

Corporate

Format

Bank

Format

Mapping Steps:1. Execute standard mapping

cartridge e.g. (pain.001 Canonical)

2. Execute customer specific mapping

Mapping Steps:1. Execute standard

mapping cartridge (Canonical ISO20022)

2. Execute bank specific mapping

SAP | 24

Ownership & Responsibility• The network is based on a cloud owned and operated by SAP.

• Separation of data and processing by each bank or corporate participant, digital signing and encryption of

data ensure integrity, security and authentication are complete.

• Membership and connectivity is not freely open to public.

Data Separation• Each FSN participant has their own virtual machine or “account”

• Processing and separate partitioning (with unique encryption) for data storage.

Data Integrity Multi-layer encryption

Transport encryption such as in SSL or SSH

Content signature and encryption using PKCS#7, PGP or Digital Signatures

Data Assurance Tamper proof hashing algorithms for proof of origination values.

SAP Cloud Security

SAP Customer Success

Common Standards, a Superior Experience LINK

An Interview with Hemant Gada, Head of Channel and Enterprise Services, EMEA, Treasury and Trade Solutions, Citi

“Citi is working closely with SAP to create the SAP Financial Services Network (FSN). This is a cloud-based, secure network managed by

SAP that enables corporate treasurers and finance managers to connect with their banks directly through their SAP platform, without the

need to manage individual bank connections. By leveraging the FSN, corporations are insulated from the idiosyncrasies of each bank’s

systems and formats, and bank connectivity becomes seamless.”

DBS partners with SAP Financial Services Network to simplify banking for corporate clients LINK

Lum Yin Fong, Global Head of Product Management, Global Transaction Services, DBS

“At DBS, we constantly look at how we can leverage technology to simplify banking for our customers. Trailblazing the use of SAP FSN

underlines this effort. In this competitive business landscape, CFOs and corporate treasurers want a seamless, integrated connection with

their banks that automates financial transactions and provides them with visibility of their cashflow. With FSN, we are able to provide straight

through processing, operating efficiencies, as well as a more streamlined onboarding process for our corporate clients.”

Subscribes to SAP® Financial Services Network to Streamline Process for Corporations to Pay by Visa LINK

“As companies shift from labor-intensive, paper-based processes to more efficient electronic procurement systems, having the option to pay

with Visa will help simplify the process and bring many benefits,” said Tad Fordyce, SVP and head of Global Commercial Solutions, Visa

Inc. “We anticipate that being able to make Visa payments via connection to the SAP Financial Services Network will help corporations

streamline accounts payable processing, while avoiding the upfront and ongoing costs that would be associated with custom software for the

payment process.”

http://www.treasury-management.com/article/1/300/2500/common-standards-a-superior-experience.html

http://www.dbs.com/newsroom/DBS_partners_SAP_financial_services_network_to_simplify_banking_for_corporate_clients

http://pressreleases.visa.com/phoenix.zhtml?c=215693&p=irol-newsarticlePR&ID=1895253&highlight=

SAP | 26

Benefits

Reach banks, buyers and suppliers through one network

Comprehensive solution

Integration between supply chain and financial supply chain business

processes

Upcoming Capabilities

Over 1,000,000 suppliers, and growing with Ariba recruitment

services

Master data of thousands of connected suppliers for payment

accuracy

Means of communicating rich remittance advice for timely posting

and reconciliation

Other FSP

Cloud Services

Businesses

Other B2B

Cloud Services

Financial and

Supply Chain

Service

Integration


Financial Service ProvidersSAP is building an integrated supply chain and financial supply chain ecommerce

business network that will help connect AP / AR and Treasury to buyers, suppliers

and banks. FSN is an integral part of this overall strategy.

What’s Next?

SAP Business Network Integration

The FSN Business Cockpit will be expanded to include other visibility, process

monitoring and reconciliation scenarios. SAP is seeking pilot Banks to help co-

innovate on further value applications and features that will enhance the corporate to

bank integration experience.

Value Applications & FSN Business Cockpit Enhanced

Benefits

Payment processing performance visibility across multiple subsidiaries and

banking relationships

E2E payment process performance analytics between ERP and bank

Multi-subsidiary and user level approvals for enhanced approval and risk

control

Upcoming Business Cockpit Capabilities

Advanced Message monitoring

Enhanced rejection information

Advanced Payment analytics

Two factor authentication

Multi-level and multi-scenario approvals

Additional financial message types

http://www.ariba.com/

http://www.ariba.com/

Thank you

SAP Financial Services Network – Presentation for Banks

Technology

Transcript of SAP Financial Services Network – Presentation for Banks