SAP is committed to bringing its customers the latest innovations and technology capabilities to address their needs. That’s especially important in the financial services sector, an area that’s changing by the day.
In December, SAP launched the latest update to its core banking product, Banking Services 9.0, feature pack 4 with Smart Accounting for Financial Instruments (Smart AFI). In an effort to better serve their financial services customers, the new Smart AFI is based on a highly simplified core and features a completely re-designed configuration optimized for simplicity and high end performance. Banking services is designed with the digital age in mind – meaning that everyone from fintech startups in Silicon Valley to global banks, corporate finance departments to local bank managers can benefit from harnessing the power of the cloud.
What Makes It SMART?
The new updates to Smart AFI are designed to run on SAP HANA for increased ease of use; making customer interaction with the tool more seamless than ever before. Because not everyone is an IT specialist (and shouldn’t have to be), all of the powerful, back-end complexities are tucked behind a streamlined, drastically simplified configuration that is based on a recognized business model and standards for accounting. This model clearly defines the sequence and tasks for each process step, resulting in a familiar experience for those with a background in business – no computer science degree required here.
Tight Integration with SAP S/4HANA
Smart AFI is the Sub Ledger for Financial Instruments whereas SAP S/4HANA Finance serves as the General Ledger including Sub Ledger for Non-Financial Instruments such as Accounts Payables and Accounts Receivables. This means there is a clear separation of work between the two components.
Smart AFI is seamlessly integrated with the Finance General Ledger of SAP S/4HANA by substantiating the general ledger balances with transaction level detail providing greater insight into reporting and real-time analytics. Customers can get the best of both worlds: smart AFI provides the simplified and business oriented sub ledger while at the same time feeding into SAP S/4HANA Finance to leverage all the power of the SAP HANA platform.
Regulations Easily to be Adopted
IFRS and US-GAAP come out of the box with Smart AFI. In addition, other local GAAP’s can be easily adapted by Smart AFI via the streamlined configuration based on the accounting process model. Feature Pack 4 focuses on impairment and at products which are evaluated “at amortized cost”.
Multi-GAAP and Multi Currency Accounting Capabilities
Smart AFI includes specialized calculation processes covering all relevant measurement and amortization approaches along Multi-Currency Accounting (MCA) providing information on currency-related questions – above all, on currency exposures and currency gains. Accountants are multi-taskers, so the tools they use need to move just as fast. Smart AFI is able to handle multiple accounting principles, simultaneously. Thanks to Central GAAP, cross-GAAP posting documents are only persisted once and GAAP specific posting documents per accounting principle – this central GAAP approach reduces data volume by avoiding redundancies.
But it’s not enough just to be able to work faster; customers also need to consistently produce quality work, efficiently. To accommodate this, the registration of operational data is real-time enabled with Smart AFI and the performance of all accounting process is optimized for handling large volumes (over 200 million business events in an hour) of data. Flawless real-time enablement ensures that accountants can focus on their core responsibilities armed with unprecedented real-time insights instead of waiting for their data to be processed.
To learn more about SAP Smart AFI, watch this video.
Nico Kohler is global head of Finance for the SAP Banking Business Unit.