is 604: contemporary issues in is banking enterprise...
TRANSCRIPT
Chair of Information Systems IV (ERIS)
Institute for Enterprise Systems (InES)
IS 604: Contemporary Issues in IS
Banking Enterprise Systems
Prof. Dr. Alexander Mädche
Chair of Information Systems IV
Institute for Enterprise Systems
Lecture
supported by:
Agenda – Session III
IS 604 Banking Enterprise Systems
2
Agenda
1 B2tec Company Overview
2 Introduction to SAP Banking Services
3 SAP Business Partner
4 Contract Management
5 Product Configuration
6 Financial Conditions & Pricing
… …
11 Accounting Integration
12 Bank Statement
3 Accounting Integration
Co
rre
spo
nd
en
ce
Pe
riod
ic
Pro
cessin
g
Double,
Triple,
Quadruple
Control
Archiving
Product Configuration
Accounting
Financial Conditions/Pricing
Contract Management
Financial
Customer
Information
Management
Reporting
Collateral
Insurance
Order Management/
Business Operation
Posting Control Processing/
Exception Handling
Open Item Management
Combined Settlement
Payment Distribution & Monitoring
Master Contract Management
Posting Lock
Management Settlement
Currency
Conversion
Cash Flow Item Management/
Payment Services
Billing and Invoicing Payment Distribution
Pooling
Credit Facilities
IS 604 Banking Enterprise Systems
Accounting Integration 4 F
ron
t-O
ffic
e
Mid
-Off
ice
Ba
ck-O
ffic
e
Contact Advisory Offer Deal Mainte
nance
Create BP
Create
Account
Maintain
BP
Maintain
Account
Settle
Account
Create
Product Maintain
Product
Maintain
Conditions
Create
Conditions Assign
Product
Define Ind.
Conditions
Manage
Payments
Maintain Product
Pricing List
Create Product
Pricing List
Account
Settlement
Posting
Control
Business
Processes
Business
Events
Business
Transactions
Book on internal
accounts Reporting
Account
Closure
Current account life-cycle
Order
Management
Payments
IS 604 Banking Enterprise Systems
Accounting Integration
IS 604 Banking Enterprise Systems
5
Introduce solutions from SAP for accounting
Explain the difference between direct accounting
integration to General Ledger and accounting
integration through Bank Analyzer
Understand the concept of Central Reconciliation
Hub
GOALS OF THIS UNIT
Agenda: Accounting Integration 6
Agenda
1 Concepts of Integration into Accounting
2 Integration via SAP Bank Analyzer
3 Central Reconciliation Hub
IS 604 Banking Enterprise Systems
Concepts of Integration into Accounting: Overview
IS 540 – Management of Enterprise Systems
7
In Transactional Banking systems a bank performs its operational activities as cash
management, accounts management etc.. To control its operations a bank needs
Analytical Banking systems, where it manages risks, profitability, regulation-related
issues and performs external and internal accounting of transactions. Accounting is
the processing and communication (reporting) of financial information of an economic
entity.
SAP provides the module Financial Accounting (FI) within SAP ERP to report
business transactions and to comply with external and internal reporting
requirements. SAP FI is delivered with sub-modules, one important module is SAP
General Ledger (GL). SAP GL records business transactions for external accounting
in accordance with specified reporting standards such as US GAAP and IFRS.
SAP Transactional Banking SAP Analytical Banking
Account
Management (AM) Accounting (FI) Bank Analyzer (BA)
Concepts of Integration into Accounting: Overview 8
The conventional transfer of operational data from account management systems to general
ledger applications (direct GL-Transfer) does not adequately meet these higher reporting
standards
Banking Services from SAP offers a new approach for financial accounting and reporting
standards. The integration of operational and accounting systems using SAP Bank Analyzer
ensures adequate analytical and financial reporting
Continuous processing of transactional data (such as payment items, interests and charges,
accruals and deferrals) and balance information from operational system to SAP Bank
Analyzer, Financial Accounting and Business Warehouse (BW) ensures that financial and
analytical reporting are complete and correct.
Extended customer requirements
regarding risk and return management
Additional legal restrictions
Increased importance and quality
requirements for internal and external
reporting
IS 604 Banking Enterprise Systems
Concepts of Integration into Accounting 9
Conventional direct GL-Transfer
Data Aggregation
1. Payment Items
2. Interests
3. Charges
Accrual
Preparation of GL-
Docs
GL-Account
Determination
Reconciliation
Financial
Accounting
Posting GL-
documents to
Balance Sheet
and Profit and
Loss Accounts
Communication via RFC (idoc/ALE)
Accounting Mng.
System
= Sub-ledger
General
Ledger
IS 604 Banking Enterprise Systems
Concepts of Integration into Accounting 10
Integration via SAP Bank Analyzer (SAP BA)
SAP DM/LM
Communication via
messages for
master and
transaction data
SAP Bank Analyzer
Data reflection
Data aggregation
Accruals / Deferrals
Results aggregation
Preparation of GL-
Documents
Balance Processing
Financial
Accounting
Posting of GL-
Documents
Central Reconciliation HUB
Account Mgt. System Sub-ledger General Ledger
BW (fine granular Sub ledger Reporting on a regular basis )
Communication via Enterprise Services
IS 604 Banking Enterprise Systems
Concepts of Integration into Accounting 11
Motivation of Integration via Bank Analyzer The standard GL transfer function is no longer sufficient to meet legal and business reporting
requirements
Banking services from SAP fulfills the IFRS and Multi GAAP reporting requirements, and provides
analytical and reporting capabilities on demand in SAP Bank Analyzer
Banking services from SAP with enhanced loan functionalities require:
Integration of operational system data into Financial Accounting via SAP Bank Analyzer
Additional features in accounting integration such as:
Multi currency accounting
Fair value
NPV / amortized costs
Valuation
Accruals and Deferrals
Other features depending on the business and legal requirements
Functional
Aspects
Accruals Deferrals IFRS and
multi
GAAP
Valuations Aggregation Multi
Currency
Accounting
Cash Flow
Statement
Maturity
Grouping
Direct GL Transfer X X
Integration via
Analytical Systems X X X X X X X X
IS 604 Banking Enterprise Systems
Agenda: Accounting Integration 12
Agenda
1 Concepts of Integration into Accounting
2 Integration via SAP Bank Analyzer
3 Central Reconciliation Hub
IS 604 Banking Enterprise Systems
Integration via SAP Bank Analyzer: Architecture 13
SAP Loans
Management
Master Data /
Transactional Data
SAP Deposit
Management
Master Data /
Transactional Data
Other Banking
Systems
Inflows / Outflows
Operational
Business
Support
SAP Bank Analyzer
(Sub-ledger for banking)
Non-banking
Sub-ledger
BW General Ledger
GL Acct.
Determination Valuation Classification
Flow Data Valuation Grouping
Banking Services from SAP
IS 604 Banking Enterprise Systems
The integration scenario for Deposits- and Loans Management is part of BaS from SAP 7.0. It covers the end-
to-end scenario that begins with operational banking, is followed by analytical banking and ERP General
Ledger, and ends with Reconciliation and Reporting in SAP NetWeaver Business Warehouse (formerly SAP
NetWeaver Business Intelligence).
Banking Services from SAP 8.0
Integration via SAP Bank Analyzer: Architecture 14
SAP Loans
Management
Master Data /
Transactional Data
SAP Deposit
Management
Master Data /
Transactional Data
SAP Bank Analyzer
BW General Ledger
Result Data Layer (RDL)
Process and Methods Layer (PML)
Source Data Layer (SDL)
Analytics Layer
General Ledger Connector Balance Processing
IS 604 Banking Enterprise Systems
Integration via SAP Bank Analyzer: Communication 15
Banking Services from SAP communicates using interfaces. The interface sends
IX information messages (XML messages sent using a proxy), which are
managed by SAP NetWeaver Process Integration (PI).
The IX Services are carried out by account managing systems (such as SAP FS-
AM and Loans), which use reports to distribute master and flow data to Analytical
Banking (SAP Bank Analyzer).
To ensure that data is transported to Bank Analyzer correctly and completely, you
can use a Monitor for Processed XML Messages to manage the message
processing.
Outflow data that is not successfully distributed is stored in the Post Processing
Office (PPO) in the Operational Banking application.
Inflow data that is not successfully distributed is stored in the Post Processing
Office (PPO) in the Analytical Banking application.
The General Ledger Connector in the analytics layer in Bank Analyzer
aggregates the sub-ledger documents. It generates compressed results and
sends them to the general ledger using End-of-Day Processing.
IS 604 Banking Enterprise Systems
Integration via SAP Bank Analyzer: Communication 16
SAP DM/LM
Communication via
messages for
master and
transaction data
SAP Bank Analyzer
Data reflection
Data aggregation
Accruals / Deferrals
Results aggregation
Preparation of GL-
Documents
Balance Processing
Financial
Accounting
Posting of GL-
Documents
Central Reconciliation HUN
Account Mgt. System Sub-ledger General Ledger
BW (fine granular Sub-ledger Reporting on a regular basis )
Communication via Enterprise Services
Recommended option
IS 604 Banking Enterprise Systems
Integration via SAP BA: Accounting Process 17
Foundation:
Market Data
Volatilities
Interest
rates
Market
Prices
Exchange
rates
Analytics Layer
Processes and Methods Layer
Source Data Layer
Results Data Layer
Contract
Master Data Account
Master Data Transactional
Data
Classifications Valuations Outflows /
Inflows • GL Account
Derivation
Financial Accounting:
• Fair Value
• NPV / Amortized costs
• Accruals / Deferrals
• Multi Currency
• Nominal Accounting
• Accruals / Deferrals
Key Data Results Flow Data Results …
General Ledger Connector Balance Processing
• Aggregation of flow results
• Daily Reporting to General
Ledger accounts
• Account balances by period, balances to date, daily
balances
• Periodic fine-granular sub-ledger reporting on
single transaction level
GL BI
IS 604 Banking Enterprise Systems
Integration via SAP BA: Accounting Process 18
IS 604 Banking Enterprise Systems
Agenda: Accounting Integration 19
Agenda
1 Concepts of Integration into Accounting
2 Integration via SAP Bank Analyzer
3 Central Reconciliation Hub
IS 604 Banking Enterprise Systems
Central Reconciliation Hub 20
The importance of reconciliation within banking is explained by the existing requirement to
ensure the correctness and consistency of business data and provide proof of correctness
for governmental regulations and for bank monitoring and auditing.
From the IT system landscape perspective reconciliation means to ensure end-to-end data
quality. Solution for this requirement from is – Central Reconciliation Hub.
The Central Reconciliation Hub is an application-independent hub for reconciling data across
various components
Reconciliation across the components of the IOA scenario ensures that all data from a
sending component are stored by the recipient
In particular, it provides for the reconciliation requirements for the process components of
Operational & Execution and Analytics, and between Analytics and the GL
It identifies mismatches, locates them, and triggers actions to resolve any data
inconsistencies found
Supports daily processing of high data volumes
IS 604 Banking Enterprise Systems
Central Reconciliation Hub: Example Architecture 21
IS 604 Banking Enterprise Systems
Accounting Integration 22
Solution for accounting from SAP is Financial Accounting
(FI) module that enables reporting of business
transactions and compliance with external and internal
reporting requirements
SAP Bank Analyzer provides sub-ledger functionality.
The advantage of accounting integration via Bank
Analyzer over direct GL transfer is are additional
possibilities, such as: Calculation of deferrals
Support of IFRS and Multi-GAAP accounting standards
Valuations
Multi-currency reporting
Cash flow statement
The Central Reconciliation Hub is an application-
independent hub for reconciling data across various
banking components.
IS 604 Banking Enterprise Systems