Dear,
Some weeks ago, I had the chance to speak with a reader of this blog, who holds a senior position in an Investment Fund.
He said “literally” that the new era of Banking is going to be dominated by Capital, as the previous era was dominated by Debt. An alternative way of saying that we’re moving from a Financial System driven by Volume to a Financial System driven by Capital Optimization.
According to some estimates, European Banks may face a Capital gap of $128 Billion with the implementation of the new regulation drawn by the Basel Committee on Banking Supervision.
https://www.bloomberg.com/news/articles/2017-04-13/european-banks-may-face-128-billion-capital-gap-as-basel-bites
Rising this Capital is going to have a profound impact on the European Banks’ profits and return on equity. Capital determines the capacity of a Bank for Lending or Investing; it is the main resource for supporting Bank’s activities.
As the Banks’ main resource (Capital) becomes scarce, the only alternative is managing this resource efficiently, which brings the question: how can we optimize the consumption of a critical resource?
Optimizing the consumption of a critical resource is a two steps activity:
1) Measuring accurately the consumption of the critical resource.
2) Planning and simulating the consumption of the critical resource under different conditions.
Bank Analyzer offers multiple advantages in the accurate measurement of the banks Capital consumption.
- Risk Exposures are evaluated individually.
- Bank Analyzer offers standard integration with the Operational Banking system, avoiding data mismatching and Operational errors.
https://www.linkedin.com/pulse/reducing-operational-costs-sap-banking-standard-ferran-frances
- Risk dimensions can be freely determined and assigned to the risk exposures, facilitating the multi-factor analysis of the portfolios behavior in stress-scenarios.
Additionally, the high-performance of the SAP HANA In Memory Database facilitates fast calculations of the Risk Weighted Assets and Capital Consumption, under multiple sets of planning data. Fast computing is the prerequisite for running simulation scenarios.
If the new banking era is driven by Capital efficiency, there’s no more critical activity than preparing the organizations for the systemic change.
For most people, SAP Bank Analyzer is the SAP component for preparing the regulatory reporting of a bank; this is a limited vision of SAP business case.
How do we want to sale a Bank Analyzer project if the message is:
“With SAP Bank Analyzer you’re going to report how well or how bad the bank performed in the last quarter.”
Is this management or should we do better?
Management requires planning, optimization and strategic alignment.
With Bank Analyzer, we can establish the foundation of an IT Architecture for providing answers to the most important concerns that bankers and regulators have in the new system.
- What’s the profit I expect to make with this strategic plan?
- How much capital will be consumed with this strategic plan?
- How much liquidity will be consumed?
This is the true value proposition of Bank Analyzer, and sooner than later it will be recognized.
Looking forward to read your opinions.
Join the SAP Banking Group at: http://www.linkedin.com/e/gis/
Visit my SAP Banking Blog at: http://sapbank.blogspot.com/
Let's connect on Twitter: @FerranFrancesGi
Kind Regards,
Ferran Frances.
Some weeks ago, I had the chance to speak with a reader of this blog, who holds a senior position in an Investment Fund.
He said “literally” that the new era of Banking is going to be dominated by Capital, as the previous era was dominated by Debt. An alternative way of saying that we’re moving from a Financial System driven by Volume to a Financial System driven by Capital Optimization.
According to some estimates, European Banks may face a Capital gap of $128 Billion with the implementation of the new regulation drawn by the Basel Committee on Banking Supervision.
https://www.bloomberg.com/news/articles/2017-04-13/european-banks-may-face-128-billion-capital-gap-as-basel-bites
Rising this Capital is going to have a profound impact on the European Banks’ profits and return on equity. Capital determines the capacity of a Bank for Lending or Investing; it is the main resource for supporting Bank’s activities.
As the Banks’ main resource (Capital) becomes scarce, the only alternative is managing this resource efficiently, which brings the question: how can we optimize the consumption of a critical resource?
Optimizing the consumption of a critical resource is a two steps activity:
1) Measuring accurately the consumption of the critical resource.
2) Planning and simulating the consumption of the critical resource under different conditions.
Bank Analyzer offers multiple advantages in the accurate measurement of the banks Capital consumption.
- Risk Exposures are evaluated individually.
- Bank Analyzer offers standard integration with the Operational Banking system, avoiding data mismatching and Operational errors.
https://www.linkedin.com/pulse/reducing-operational-costs-sap-banking-standard-ferran-frances
- Risk dimensions can be freely determined and assigned to the risk exposures, facilitating the multi-factor analysis of the portfolios behavior in stress-scenarios.
Additionally, the high-performance of the SAP HANA In Memory Database facilitates fast calculations of the Risk Weighted Assets and Capital Consumption, under multiple sets of planning data. Fast computing is the prerequisite for running simulation scenarios.
If the new banking era is driven by Capital efficiency, there’s no more critical activity than preparing the organizations for the systemic change.
For most people, SAP Bank Analyzer is the SAP component for preparing the regulatory reporting of a bank; this is a limited vision of SAP business case.
How do we want to sale a Bank Analyzer project if the message is:
“With SAP Bank Analyzer you’re going to report how well or how bad the bank performed in the last quarter.”
Is this management or should we do better?
Management requires planning, optimization and strategic alignment.
With Bank Analyzer, we can establish the foundation of an IT Architecture for providing answers to the most important concerns that bankers and regulators have in the new system.
- What’s the profit I expect to make with this strategic plan?
- How much capital will be consumed with this strategic plan?
- How much liquidity will be consumed?
This is the true value proposition of Bank Analyzer, and sooner than later it will be recognized.
Looking forward to read your opinions.
Join the SAP Banking Group at: http://www.linkedin.com/e/gis/
Visit my SAP Banking Blog at: http://sapbank.blogspot.com/
Let's connect on Twitter: @FerranFrancesGi
Kind Regards,
Ferran Frances.
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