Why the Banking Industry Needs to Implement SAP S/4 HANA


Banking Industry

There is hardly any industry that remains untouched by advanced Enterprise Resource Planning Solutions such as SAP S/4 HANA. The banking sector is also no exception. Banks, as well as customers, are keen on leveraging the benefits of digital transformation to boost their gains.


Digital Transformation Trends Influencing the Banking Industry

The banking industry has already starting to reap the benefits of digital transformation trends such as Blockchain technology, Robotic Process Automation, and Conversational Artificial Intelligence. And it showed some positive results too. For instance, the integration of smart and intelligent computer programs has enabled banks to save 20% on capital expenditure. Furthermore, using AI has allowed banks to reduce 3,60,000 hours of manual work by automating the tasks.


Why Should Banking Sector Adopt SAP S/4 HANA: Let’s Analyze the Significant Reasons

The SAP S/4 HANA plays different roles in bringing transformation into the banking sector whether it is related to commercial banking operations, finance and risk management, retail banking and loan management, and upscaling the payment methods and communications.


How  SAP S/4 HANA Helping Banks to Augment Customer Experience

SAP is aware that banks aim to prioritize the customer experience and so S/4 HANA offers apt solutions to digitalize that experience. The key areas are-

  • Personalization of Commerce
  • Consent-Based Marketing
  • Self Service Digitial Banking Services
  • Managing Omnichannel Commerce Channel
  • Omnichannel Customer Solutions
  • Optimizing the Marketing Channels
  • Single-Window Customer Service

1. In the first instance, SAP S/4 HANA relatively tries to personalize commerce through creating and maintaining the customer profile using commerce storefronts and data resources. It helps to retarget users who have left the app through customer-centric campaigns.

2. It indulges in consent-based marketing practices to target more customers and get more sales leads in the run.

3. Digital banking self-servicing is based on commercial and retail omnichannel experience. It allows decreasing the Total Cost of Ownership and increases customer experience.

4. The omnichannel commerce management is helping the banks to improve their search and navigability, create outstanding touch-points across channels, manage digital assets, and workflow collaboration.

5. The omnichannel customer service excels customer expectations by offering real-time insight into powerful analytics and intuitive dashboards. This has resulted in an 8% increase in user satisfaction.

6. With optimized marketing campaign satisfaction, you can get more visibility and control over the marketing process.

7. Single Customer View is a one-source window to gain insight into your customer and provide a customized experience to boost traffic.


Let’s take the example of mBank, which has been successful in enhancing marketing campaigns through personalized banking experience.

Erste Group AG Bank was able to move on to digital innovation due to the implementation of SAP S/4 HANA.


Role of SAP S/4 HANA in Retail Banking

In retail banking, SAP S/4 HANA has played a supportive role in streamlining retail deposits and centralized payment processing.

  • S/4 HANA allows the management of all cards, card lifecycles, and simplifies the process of issuing.
  • It improves the efficiency of the bank to process the account in high volumes in less time.
  • It helps in reducing the Total Cost of Ownership (TCO) to automate the payment processing.
  • It streamlines product and contract management by reducing the time it takes to market.

Now let’s define its role in Retail Deposits

  • S/4 HANA helps in processing and managing the legal reporting figures, simplifying the integration into the bank’s system environment.
  • The banks can now easily calculate the tax on capital gains based on the specific details of the account holder.

Choose the ERP Business Suite for Retail Lending

  • It helps to streamline the entire process of loan administration.
  • It supports collateral management across the commercial and retail banking sector.
  • It simplifies the processing and management of funds and multiple assets.

SAP S/4 HANA in Commercial Banking

When offering its services for commercial banking, it more or less follows the same procedures such as account processing, automation in the payment process, managing the product and contract, and optimizing the customer cash deposition.

In fact, commercial lending operations are almost similar to retail lending. This function is also based on fund management, administrating the deposition and, and collateral management.

However, what distinguishes SAP’s role in commercial banking is multi-bank connectivity. It helps to boost the customer-bank relationship through improved connectivity and seamless integration.

  • The financial messages exchange helps in lowering the costs and increasing the sales after getting the customer knowledge.
  • Enhance the global multi-bank connectivity with growth in revenue through value-added services.
  • Overall, it aims at increasing agility and decreasing costs.

SAP S/4 HANA in Finance and Risk Management

The finance and risk management process is a vital part of the banking system. S/4 HANA will provide greater visibility of financial insight and faster control of the accounting close. Let’s discuss this in some detail-

  • With S/4 HANA the banks can support the proper planning, implementation, and monitoring of the financial close for a specific period. According to the stats, the banks have been able to save 15% of their time during the financial close.
  • The ERP solutions pitch for best-in-class financial close governance.
  • It allows the processing and management of financial accounts with an ERP component.
  • Offers to correct financial data reporting in real-time, reducing the time and cost of regulatory filings and disclosures.
  • Automate and manage the accounts payable and receivable.
  • Brings more accuracy into the corporate closing.
  • Enhance the efficiency of the entity by closely implementing standardization and automation.
  • Report and get a direct tax compliance entity involving fewer risks.
  • S/4 HANA helps to eliminate the hassles related to traditional ERP applications such as manually-handled cases.

Financial Planning and Analysis

SAP S/4 HANA is the latest software that provides complete solutions in financial planning and implementation of correct business strategies.

  • Advanced software analytics helps to support financial and operational decision-making.
  • Banks can identify their most productive customers, potential products, and services to focus more on those areas to increase profitability.
  • Get access to the details on the product costs and margins to manage the profit margin.

Centralization and Data Management Process

  • It allows the creation of a full data platform with the data management process.
  • S/4 HANA leverages banks to implement the best financial service data model.
  • It also provides a highly reliable cloud-based solution to secure and govern the information.

SAP S/4 HANA automates and Risk Management

S/4 HANA offers you comprehensive information on how the different risk-based factors can influence the business enterprise. It offers a robust risk management solution for proper identification of risks and accessing it at the right time to make appropriate decisions.

  • It automates the scanning of large volumes of data in real-time to bring more efficiency and accuracy. This helps to prevent errors while screening and monitoring data.

Apart from these, SAP S/4 HANA is also providing other benefits in account and finance management such as-

  • Sub-ledger accounting – It provides the facility of sub-ledger accounting for the financial instrument on a single contract level.instrument
  • Hedge Accounting – It allows the banks to simplify hedged accounting and reduce the risks of financial instruments based on the International Financial Reporting Standards.

Moving your Banking System to SAP S/4 HANA

SAP S/4 HANA is the right tool for transformation that is allowing the banking industry to stay in touch with  Fintech technology. With digital disruption waving across several industries, it’s time banks moved forward with automated solutions and exceeded the concept of internet banking and e-wallet. All you need to do is get in touch with  SAP experts and revamp your banking and customer experience.