Dear,
Last week, we look at the open architecture of the Results Data Layer, in terms of the opportunity it represents for integrating non-Bank Analyzer data which is required for Accounting or Capital Requirements purposes.
On the current stage of the transitionary period, this is a very important feature. There’re many reasons (economic, strategic, technical ...) why we’re having heterogeneous landscapes in the Banking Systems, with SAP and non-SAP components coexisting in the same technological infrastructure. On this environment, open architectures facilitating the integration between former silo-style components are a necessary requirement.
But on the other hand, and in the middle of the systemic change, the open architecture of the Bank Analyzer-RDL is an opportunity for implementing new integrated scenarios that were not feasible some years ago.
This year I've been collaborating part-time in an advisory role for a European client who implemented AFI some years ago and now it’s considering a Profit Analyzer implementation.
In this particular case, we analyzed the possibilities of calculating the process costs of impaired loans.
Simplifying; in addition to the process costs of a performing loan, impaired loans also generate additional process costs for the bank (dunning and collection costs, collateral liquidation costs, etc.).
The probability of Loan becoming impaired is represented by the probability of default of the counterpart. This means that the standard process costs are related to the probability of default of the counterpart, the higher the probability of default the higher the potential process costs.
Collecting the historical real process costs in the Controlling modules (Activity Based Costing, Cost Center Accounting, Profitability Analysis, etc.) is well known functionality of SAP-ECC.
The Bank has a very detailed analysis of its process costs, including Activity Based Costing models, supported with data collected by their CRM System and leveraged to the SAP-ECC Controlling Components. Amongst other parameters, the Bank is capable of capturing most of the process costs by client type.
By including the Rating of the Counterpart as a reporting dimension in Profitability Analysis we will get an accurate tracking of the real costs of the process costs according the rating of the counterparts, including dunning costs, collection costs, etc.
In the proposed model we would transfer the historical real costs to SAP Business Planning and Consolidation. From there we will build planning models for estimating the evolution of future process costs by counterparty ratings.
Finally, the calculated plan costs and the estimated standard costs will be transferred to the RDL for two purposes.
- Making the basis of the standard costs, escalated by counterpart rating, in the AFI sub-ledger.
- Tracking the dispersion between estimated planned process-costs, estimated standard costs and real costs, and consequently the accuracy of the standard costs.
This is just an example of the integration capabilities of the SAP Banking business suite, I’m sure that as the market comes with new requests we’ll find new opportunities to show them.
K. Regards,
Ferran.
Last week, we look at the open architecture of the Results Data Layer, in terms of the opportunity it represents for integrating non-Bank Analyzer data which is required for Accounting or Capital Requirements purposes.
On the current stage of the transitionary period, this is a very important feature. There’re many reasons (economic, strategic, technical ...) why we’re having heterogeneous landscapes in the Banking Systems, with SAP and non-SAP components coexisting in the same technological infrastructure. On this environment, open architectures facilitating the integration between former silo-style components are a necessary requirement.
But on the other hand, and in the middle of the systemic change, the open architecture of the Bank Analyzer-RDL is an opportunity for implementing new integrated scenarios that were not feasible some years ago.
This year I've been collaborating part-time in an advisory role for a European client who implemented AFI some years ago and now it’s considering a Profit Analyzer implementation.
In this particular case, we analyzed the possibilities of calculating the process costs of impaired loans.
Simplifying; in addition to the process costs of a performing loan, impaired loans also generate additional process costs for the bank (dunning and collection costs, collateral liquidation costs, etc.).
The probability of Loan becoming impaired is represented by the probability of default of the counterpart. This means that the standard process costs are related to the probability of default of the counterpart, the higher the probability of default the higher the potential process costs.
Collecting the historical real process costs in the Controlling modules (Activity Based Costing, Cost Center Accounting, Profitability Analysis, etc.) is well known functionality of SAP-ECC.
The Bank has a very detailed analysis of its process costs, including Activity Based Costing models, supported with data collected by their CRM System and leveraged to the SAP-ECC Controlling Components. Amongst other parameters, the Bank is capable of capturing most of the process costs by client type.
By including the Rating of the Counterpart as a reporting dimension in Profitability Analysis we will get an accurate tracking of the real costs of the process costs according the rating of the counterparts, including dunning costs, collection costs, etc.
In the proposed model we would transfer the historical real costs to SAP Business Planning and Consolidation. From there we will build planning models for estimating the evolution of future process costs by counterparty ratings.
Finally, the calculated plan costs and the estimated standard costs will be transferred to the RDL for two purposes.
- Making the basis of the standard costs, escalated by counterpart rating, in the AFI sub-ledger.
- Tracking the dispersion between estimated planned process-costs, estimated standard costs and real costs, and consequently the accuracy of the standard costs.
This is just an example of the integration capabilities of the SAP Banking business suite, I’m sure that as the market comes with new requests we’ll find new opportunities to show them.
K. Regards,
Ferran.
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