SAP Bank anlyzer as a multidimensional capital management and performance measurement tools,

Omnichannel Architecture and SAP Bank Analyzer.

As we know the  Digital Banking revolution is transforming the way in which customers interact with banks. Smart-phones, Computers, Phone Banking, Branches or even Social Networks offer multiple communication channels and bring the opportunity for a deeper relationship between the bank and their customers.

On the other hand, obsolete processes and legacy systems are far from being ready to be aligned with the new paradigm. Many, if not most, of the banks are incapable of managing holistically all their interaction channels.

For instance, different channels have different response times, presenting contradictory experiences and generating a distorted image of the bank to the customer and vice-versa.

The response to this challenge is the convergence of physical and virtual channels, putting the customer at the centre; this approach is normally called Omnichannel Architecture.

Personally, I don’t think the name Omnichannel is a fortunate one, digital banking is not only a technical revolution but also a social one. The context of the interaction is as important as the channel through which is happening.

For instance, when we access to a banking service in Facebook, what’s the interaction channel, Internet, PC, Smartphone, Tablet or Facebook?

On the other hand, the context of banking interaction in Facebook is potentially very different to a traditional Online Banking interaction, and they can be both Internet based.

What’s most relevant in this case, the context in which the transaction is requested and fulfilled, the channel in which the interaction occurred, or both analytical dimensions must be analyzed?

Determining the analytical dimensions of the bank’s portfolio will define the analytical business segments, and this is the most critical activity in a Bank Analyzer implementation.

Managing a bank requires analyzing the business segments in which the bank is investing and finding an answer to some important questions.

For instance:

- Expected return weighted by capital consumed in the business segment.

- Liquidity generation and consumption by business segment.

- Value at Risk by business segment.

Digital banking requires defining the business segments according to a multidimensional matrix of customer types, ratings, syndication agreements, origination channels, transaction contexts, etc.

Traditionally; business segments performance has been measured by a combination of manual calculations, spreadsheets and silo based reporting systems, with very limited integration with the accounting and capital management systems.

SAP Bank Analyzer – Integrated Financial and Risk Architecture offers a solution to the above issue with multidimensional capital management and performance measurement tools, fully reconcilable with the Accounting Systems.

There’re some rules to be followed in the definition of the Business segments

-Dimensions should cover, without overlapping, any present or future opportunity for capital allocation.

-Key Figures must be capable of representing, without overlapping, all the necessary performing indicators (fees, costs, capital, short-term receivables, etc.)

Suboptimal definitions of the business segments and performing indicators will limit the future system capabilities. And once the system has been initialized is challenging to modify the structure of the Financial Database, especially for generating historical data according to the new structure, so you better do it right at the first shot.