SAP Reveals Potential of Cloud-Based Banking Network
Emirates NBD and Abu Dhabi Commercial Bank Join Global Institutions to Highlight Power of Strategic Technology Implementations at SIBOS;
DUBAI, United Arab Emirates — The future of banking in MENA is technology-led and innovations such as in-memory computing, mobile and cloud are set to play an increasingly influential role, senior banking executives and leading industry experts agreed today.
“Banks need innovations such as cloud computing. Lack of transaction visibility and control, a lack of agility, multiple failure points and complex infrastructures, as well as considerable maintenance and expertise costs means they simply cannot be ignored,” said Ross Wainwright, Global Head of Financial Services Industries, SAP.
Banks are expected to spend almost $180 billion on IT this year, according to research company Celent. But while cloud-based services currently account for a fraction of this, some estimates predict spending by financial-services firms on the public, private and hybrid cloud solutions will total $26 billion in 2015.
A recent PricewaterhouseCoopers survey of financial services executives supports this notion of momentum. 71 per cent said they will invest more in cloud computing this year — up from 18 per cent who said the same in 2012. In addition, 50 per cent plan to invest in private cloud technology.
Wainwright’s comments come as the MENA region as a whole is starting to look to the cloud more than ever before. Gartner predicts that MENA is projected to experience one of the highest global growth rates for public cloud services, increasing from 2012 to 2013 by 24.5% to USD 462.3 million. The UAE is likely to be particularly active in this respect, with IDC predicting annual compound growth of 43.7% until 2016.
Wainwright was speaking on a panel at SIBOS today alongside Emirates NBD, Abu Dhabi Commercial Bank, the Bank of Tokyo-Mitsubishi UFJ, Bank of America Merrill Lynch, Citi, Deutsche Bank, Standard Chartered and RBS.
He explained that demands for greater innovation in the financial service industry had aggressively driven the creation of the SAP Financial Services Network (FSN), which connects corporate customers with their financial services providers in the cloud.
“What corporate treasurers need is a faster, simpler way to connect to their banking partners that could also provide a consolidated view of their enterprise’s financial positions and real-time access to all of their banking information. That could happen in the cloud”.
“A single service could connect banks and corporate treasuries, enabling them to share data – including payments, payment statuses, and statements – as well as automate collections, reconciliations, settlement updates, financial reporting, and other key processes on a common platform. More importantly, it could also serve as a foundation upon which to build analytics applications that harness all of that data”, said Wainwright
Until now, corporates have tended to deal with their bank or banks over point-to-point, proprietary connection – a situation that creates multiple silos of information and makes it more difficult to gain a single view of their positions and liquidity across all institutions.
Hosted by SAP as an on-demand offering, the SAP FSN is a bank-to-corporate connectivity service in the form of a network, over which the two sides will be able to communicate.
Corporate customers can authorize payments and interrogate their accounts with real-time analytical tools, while the banks can use it not only for timely reporting but also, SAP argues, to offer additional services as and when they detect opportunities from the analysis of their customers’ transactions.
The network is also intended to facilitate core transaction management among banks, corporations and treasury service providers. As part of the development of the network, banks and corporations are continuously contributing their expertise and resources to create a real-world road map that helps deliver full financial integration, connectivity and service among all participants.
Making MENA’s banks run better
“Banking is undergoing massive and rapid transformation, and its future in MENA will be powerfully influenced and led by technology,” said Sam Alkharrat, Managing Director, SAP MENA.
“Increasingly, we will see market forces and customer demands force banks to incorporate technologies related to the cloud, mobile, analytics, applications and database and technology. Institutions that want to lead, innovate, retain custom and unlock new opportunities simply cannot afford to stand still – particularly against the backdrop of MENA’s cutting-edge development agendas. The step-change in this industry is unavoidable and hugely exciting, and I am proud to say that SAP is playing a leading role in making it all happen.”
Receptivity for ground-breaking solutions like the FSN will be buoyed by SAP’s already strong profile in MENA’s financial services sector – a fact that was underscored by both Emirates NBD and Abu Dhabi Commercial Bank at SIBOS today.
Emirates NBD explained how it turned to SAP when it was making efforts to cope with the effect of rapid growth on its ability to accumulate and analyse customer and transaction data.
Emirates NBD opted to employ database software that could keep up with the complexity of the challenge, including reducing the time required for analysts to receive reports. This approach would also help minimise storage expenses, which became an important issue as the database grew to 14 terabytes in size.
After implementing SAP Sybase IQ software, Emirates NBD was able to cut the average time required to traverse five years of data down to two minutes, whereas a compression algorithm reduced the 14 terabyte database down to 4 terabytes and the number of servers from eight to one.
“SAP Sybase IQ has brought us increased availability, improved speed, and extra efficiency in our decision-making process,” said Fuad Mohamed, Vice President, Application Management, at Emirates NBD.
“This in turn has helped us focus more on figuring out how best to address our customers’ needs, instead of having to spend effort on data management technology. We are making better use of advanced business intelligence functionalities and spending less time waiting for the results of complex queries. SAP Sybase IQ means faster data processing and less administrative overhead. It is a complete success from a TCO viewpoint.”
Abu Dhabi Commercial Bank was also keen to outline its SAP experience. The institution has implemented a host of solutions from Ariba, an SAP company that makes web-based software hosted in the cloud that connects suppliers and buyers online.
Abu Dhabi Commercial Bank is currently running the Ariba Sourcing Software-as-a-service (Saas) solution, which enables it to handle the majority of its spend through online negotiation, including complex categories like legal services. This has resulted in savings of millions of Dirhams.
The bank also runs the Ariba Procure to Pay SaaS, which helps it stay flexible and ensure control and compliance between vendors, contracts, regulations, buyers, and finance organizations. The solution means it can scale resources to dynamically manage suppliers, processes, budgets, approvals, and payments on a global basis.
“SAP has made a big difference to our ability to run crucial tasks in the cloud. We have seen considerable time and cost savings to date, coupled with higher levels of efficiency and productivity”, said Maher Zebib, Head of Procurement, Abu Dhabi Commercial Bank.
SIBOS is an annual conference, exhibition and networking event organised by SWIFT for the financial industry. What started out as SWIFT’s interbank operations seminar, has grown into a premier business forum for the global financial community to debate and collaborate in the areas of payments, securities, cash management and trade. For more information, visit www.sibos.com
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 248,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com
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