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ERP for Financial Services Enterprise Vu The Cuong Senior Solution Consultant

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Page 1: Oracle ERP for Banking

ERP for Financial Services Enterprise

Vu The Cuong

Senior Solution Consultant

Page 2: Oracle ERP for Banking

Agenda:

� Introduction

� Today Business Challenges

� Banking Solution Architecture

� Oracle Financials

� Oracle Self Service for Bank� Oracle Self Service for Bank

� Intergration with Core Banking

� Results achieved by Customers

Page 3: Oracle ERP for Banking

Introduction

� About the Speaker – Vu The Cuong

� Responsible for ERP Solution for Capital Market.

� 2 Years in Brokerage, Market Making at Stuttgart Stock Exchange

10+ Years in providing Business Process � 10+ Years in providing Business Process Consulting, ERP Solution Implementation, Trading Back Office Implementation, Project Management.

Page 4: Oracle ERP for Banking

Today Business Challenges

Complex Financial Service Value Chain

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

• Exchanges

• Other

• Clearing House

Channels Customers

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 5: Oracle ERP for Banking

Today Business Challenges

Suppliers FinanceGoods & Services

Providers

CapitalMarkets RegulatorsFirms

� Lack of multi-dimensional view of profitability analysis by product, customer, sales channel, organisation and more...� Lack of well-designed EIS for monitoring decision making and performance� Resource spending time on low-value activities such as data collection and consolidation, reviews, approvals and report preparation.

Business

ProductProviders

Consumer

Insurance

Agents

report preparation. � Burdensome Budgeting and Forecasting Process (long budget cycle, outdated information,...) � Stay compliant with continuous changing regulation.

Page 6: Oracle ERP for Banking

Banking Solution ArchitectureA

naly

tical

EP

M M

od

ule

s

Customer Channnel

BranchTime

(History)Transaction

ProductCurrency

CostRevenueProcessBalances

Automated Consolidation

Automated Financial Reports

Integrated Reporting, Planning & Forecasting

Info

rma

tio

n D

eli

ve

ry

Data Mart Extraction, Allocations, Data Transformations

Transfer

PricingAsset &

Liability Mgt

Treasury

Data

Transformation

Activity Based

Costing

Performance ManagementCredit

Risk

Operational

Risk

Market

Risk

Risk Management

Customer

MetricsWorkforce

Analytics

Business Planning & Forecasting Processes

Project

User IDGL

account

Product-

ActualsBudgetsPlansScenarios

Segment

Resource

Other

ReferenceFinance

DWH Transformation

Data Extraction, Integration & Cleansing & Middleware

Op

era

tio

nal

ER

P A

pp

s.

Trx

ProcessBalances

Other

CRM and Channel Management Systems

ATMTelephone Banking

WebPoint ofSale

DirectAccess

Branch

Scripting Client Data Mart Contact Log

User Driven OLAP processes

Balanced Scorecard Reporting

Bu

sin

es

s/E

ve

nt

Ma

pp

ing

R

ule

s

GL

Project

Accounting

FA AR

POAP

Info

rma

tio

n D

eli

ve

ry

Loans

Credit

CardsCollections

Debit Cards

Banking Systems

Items

Processing

Deposits

Mid

dle

wa

re

Payroll

HRD

ScenariosHierarchies

* * *

*

*- to be replaced

Page 7: Oracle ERP for Banking

Oracle Financials Solution Overview

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Single Integrated System

Channels Customers

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 8: Oracle ERP for Banking

Oracle Financials Solution Overview

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Procure-To-Payment Process

Channels Customers

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 9: Oracle ERP for Banking

Procure to Pay

P.O. Finalized

Purchase Order IssueRequisition Management

P.O.

Requisitions

Managed and

Reviewed

• Requisitions are reviewed for

completeness and for necessity

Requisition

Generated

• A requisition for material (either direct or indirect)

can be generated automatically or manually

based on production need

Supplier

Selected

• Vendor is selected based on ASL and existing contracts

Requisition Approved?

YES

NO

P.O.

Issued

• A Purchase Order (P.O) is issued against the

existing contract• The P.O. may be a blanket P.O., in which

case it will also include a release schedule

P.O.

Sent to

P.O. Receipt and Shipment

P.O. Material Material

Purchasing

Goods Received

Purchasing Manager

Supplier

Receiving Clerk

Roles

Inspect to Disposition

Authorized

• The purchase manager approves the purchase order.

Receive

Material

• Receive materials from suppliers, either into inventory or into an inspection area.

Purchasing Clerk

Sent to

Supplier

• The P.O. is sent to the supplier

• This step may be done over EDI, XML,

fax, purchasing portal, or by phone

Receipt

• The Vendor receives the P.O. and

prepares to fulfill the order

Prepared

• The material is gathered and

prepared for shipment

Shipped

• The supplier ships the material

• An advance ship notice is sent to the manufacturer after

the items are shipped

Goods Approved?

YES

Supplier Return to

Settlement

NO

• The P.O. is matched against the packing slip to check

correctness

NOTE: Even when the wrong goods are shipped and

received, the receiver may choose to keep them in

which case the payment will be settled as if it was an original order from the

receiver

Purchasing iSupplier Portal

Purchasing, Warehouse

Management

Page 10: Oracle ERP for Banking

Procure to Pay

Create Requisition and Submit for Approval

Page 11: Oracle ERP for Banking

Procure to Pay

Create Requisition and Submit for Approval

Page 12: Oracle ERP for Banking

Procure to Pay

Requisition is approved

Page 13: Oracle ERP for Banking

Procure to Pay

Autocreate PO based on Requisitions

Page 14: Oracle ERP for Banking

Procure to Pay

Create Invoice with PO Reference

Page 15: Oracle ERP for Banking

Procure to Pay

Matching 2,3,4-Way

Page 16: Oracle ERP for Banking

Procure to Pay

Change Price on PO

Page 17: Oracle ERP for Banking

Oracle Financials Solution Overview

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Asset Management

Channels Customers

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 18: Oracle ERP for Banking

Asset Asset additionsadditions

TransferTransferss

AdjustmentsAdjustments

RetirementsRetirementsOnline Online

ExternalExternalManualManual CIPCIP

Managing Fixed AssetsManaging Fixed Assets

RetirementsRetirements

DepreciationDepreciation

Journal entriesJournal entries

ReportsReports

Online Online inquiryinquiry

TaxesTaxes

Page 19: Oracle ERP for Banking

Mass Mass Additions Additions processprocess

Add invoice Add invoice lineslines

Oracle Oracle AssetsAssets

Oracle Payables or Oracle Payables or other systemother system

OracleOraclePurchasingPurchasing

Adding Assets from External Sources Using Mass AdditionsAdding Assets from External Sources Using Mass Additions

Run Run depreciatidepreciati

ononCreate journal Create journal

entriesentriesDepreciation Depreciation

journaljournal

Add CIP asset Add CIP asset lineslines

AssetsAssets

Oracle Oracle ProjectsProjects

Page 20: Oracle ERP for Banking

QuickAdditiQuickAdditionsons

Detail Detail AdditionsAdditions

Assets Assets where where

default rules default rules

Assets that Assets that require more require more

informationinformation

Adding an Asset Manually Adding an Asset Manually

default rules default rules applyapply

informationinformation

Oracle Oracle AssetsAssets

Page 21: Oracle ERP for Banking

Adjusting AssetsAdjusting Assets

Mass Change

Reclassification

Unit AdjustmentMass Depreciation

Adjustment

Adjustments

Financial Information Mass Change

Invoice Line Addition

RevaluationReserve

Adjustment

Adjustments

Unplanned Depreciation

Information Adjustment

Page 22: Oracle ERP for Banking

Depreciation Depreciation Expense Expense AccountsAccounts

General Ledger Number

Company

Region

Cost Center

Account

Product

SubAcct

03

300

300

3000

300

3030

General Ledger Number

Company

Region

Cost Center

Account

Product

SubAcct

03

300

300

3000

300

3030

HCM.PA.BLDG3HCM.PA.BLDG3HN.SF.BLDG1HN.SF.BLDG1 LocationsLocations

Transferring AssetsTransferring Assets

HCM.PA.BLDG3HCM.PA.BLDG3HN.SF.BLDG1HN.SF.BLDG1 LocationsLocations

EmployeesEmployeesNguyễn Văn ANguyễn Văn A

Employee 33Employee 33

Nguyễn Văn BNguyễn Văn B

Employee 117Employee 117

Page 23: Oracle ERP for Banking

Asset LifeAsset LifeAutomateAutomate

d d additionaddition

Manual Manual additionaddition

TransferTransferAdjustmAdjustmentent

Asset LifeAsset Life

OracleOraclePayablesPayables

Depreciating an AssetDepreciating an Asset

entent

ReportsReports

Run Run depreciatidepreciati

onon

Create Create journal journal entriesentries

Retirement

Page 24: Oracle ERP for Banking

Retiring an Asset Retiring an Asset

InvoiceInvoice

Asset LifeAsset LifeManual Manual

additionaddition

TransferTransfer

Automated Automated additionaddition

AdjustmentAdjustment

RetirementDepreciatiDepreciati

ononCreateCreatejournal journal entriesentries

ReinstatementReinstatement

Page 25: Oracle ERP for Banking

Asset Management

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Place Asset in Service

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 26: Oracle ERP for Banking

Asset Management

Suppliers FinanceGoods & Services Companies

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

System calculates depreciation

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 27: Oracle ERP for Banking

Budget Management

Page 28: Oracle ERP for Banking

Budget Management

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Upload budget values

using easy to use

spreadsheet interface

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 29: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Proactive Budgeting Control

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 30: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 31: Oracle ERP for Banking

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Allocate & Consolidate

Plan &Budget

Transact & Record

• Analyze historical results, new trends

• Transact business • Allocate costs

Report

• Convert to XBRL

Streamline Corporate Business Flow

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

“Many U.S. multinationals are still not fully prepared to meet new deadlines for closing their books.”

“Many U.S. multinationals are still not fully prepared to meet new deadlines for closing their books.”

results, new trends

• Develop plan

• Develop process

• Gather and set budget

• Create accounting entries

• Approve, adjust,and post

• Perform translations and eliminations

• Issue financial statements

• Publish management reports

Page 32: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Ledger IntegrationAutomate & Enforce Journal entries generation from sub-ledgers

• Journal entries

generated

automatically on

accounting events in

subledgers

General

Ledger

General

Ledger

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

subledgers

• Can review and post in

GL

• Display accounting

impact of transactions

in General Ledger

and in sub-ledgers

– T-account format

– Trial balance format

Payables Assets

ProjectsOther

System

Receivables

Purchasing Core

Banking

Sub-LedgersSub-Ledgers

Page 33: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarketsFirms

Brokers

FinancialIntermediaries

Flexible Chart of Account Structures

� Company

� Branch

� Department

� Account Account StringAccount String

GL Accounting Key

Channels

ProductProviders

Consumer

10.11.000.353100.001.000.10.001000.000.000

BrokersInsuranceCompanies

Banks Agents

� Product

� Sales Channel

� Intercompany

� Analysis

� Future

Company.Branch.Department.Account.Product.Sales Channel.Intercompany.Analysis.Future.Future

Page 34: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Automated Resource-Intensive ProcessesReduce Data Entry Errors and Improve Productivity

� Journal Automatic Processing

� Recurring

Auto-Allocation

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

� Auto-Allocation

� Reversal

� Approval Routing

� Import

Page 35: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Recurring

Dr. Reserved for Bad Debt

Dr. Utilities Expense

Skeleton

XXX

XXX

Fixed

5 % of A/R

….

Formula

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Dr. Utilities Expense

Dr. Rent Expense

Dr. Stationery Expense

Dr. Misc. Expense

Dr. …..

Cr. Cash

XXX

XXX

XXX

XXX

XXX

XXX

….

….

….

….

….

….

Page 36: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

ReportTemplate

Template-Based Report PublishingPut Report Creation in the Hands of Finance Professionals

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks AgentsXML

PublisherFSG* Report

as XML Output

Published FSG* Report

• Create reports for internal reporting and compliance

• Use templates to standardize reports and achieve professional quality

Page 37: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Export report to Excel and drilldown

Channels

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 38: Oracle ERP for Banking

Streamline Corporate Business Flow

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

ERP Benefits – Improve Decision Making

DecisionSupport

New Focus

Role Transformation

Decision Support

Control

Problem finding

After-the-fact

Sophisticated

analysis &

problem

solving

Channels

Product

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Transaction Processing

Reporting

Control

Support

38

ProcessRe-engineering

Reporting

TransactionProcessing

Traditional Focus

Manually

intensive

Confrontational

Technology

constrained

Streamlined

Integrated

Embedded

Page 39: Oracle ERP for Banking

Integrate with Core Banking

Page 40: Oracle ERP for Banking

� 1a - T24 Core Banking System places the output files into the specific folder in Oracle Server System every end of day. Among these files also included a text file for daily currency conversion rates.

� 1b – After placing all of its output files, T24 inserts a record into Process Init. table. This will trigger off an

Integrate with Core Banking – 1st Step

record into Process Init. table. This will trigger off an execution of a shell script for automatic initiation of Oracle GL processing steps.

Page 41: Oracle ERP for Banking

� First Shell script runs a request to load the text file for daily currency conversion rates to the GL daily conversion rate interface. Then shell script runs the request to import data from that interface to currency conversion rates table.

� Next, Shell script run a request to load the data from text files to the Metadata table and Staging table.

Integrate with Core Banking – 2nd Step

text files to the Metadata table and Staging table.

� The shell script uses the FND loader to transfer data from text file to Staging table and Metadata table. Each detail line of the text file will be loaded as a record in the staging tables.

� The shell script then invokes the Concurrent Program at Oracle GL to process the data from staging table.

Page 42: Oracle ERP for Banking

� A Custom Program (run as a concurrent program) checks all check sums provided in the T24 source text files (which have been loaded into Metadata table) to ensure the received file are in good status.

� The Custom Program will process the data in Staging table and Metadata table. It will check data for business rules for further processing. If the errors occur they will

Integrate with Core Banking – 3rd Step

rules for further processing. If the errors occur they will be listed in the log file of the concurrent request.

� Data from Staging Table will be processed and inserted in to GL Interface table.

Page 43: Oracle ERP for Banking

� The record that has been successfully inserted to the Oracle Interface table will be copied to a History Table for archiving. The number of processed records will be registered on the log file.

Integrate with Core Banking – 4th Step

Page 44: Oracle ERP for Banking

� When all the data had been successfully inserted to GL Interface table, user can run standard concurrent request program to import it into Oracle GL tables to create journal entries. These journal entries can be viewed and posted in Oracle GL to affect the balance sheet.

Integrate with Core Banking – 5th Step

Page 45: Oracle ERP for Banking

Results Achieved by Customers

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Channels Customers

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

Page 46: Oracle ERP for Banking

Results Achieved by Customers

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarkets RegulatorsFirms

Brokers

FinancialIntermediaries

Barclays• Live on Oracle E-Business Suite and Oracle Hub andSpoke:– Internet Procurement– Sales Analysis– Hub and Spoke.– Develop a new banking product only once, and then deploy it on

Channels Customers

ProductProviders

Consumer

Business

BrokersInsuranceCompanies

Banks Agents

onOracle Hub and Spoke– Quickly and economically deliver services to customers acrossthe whole range of channels and Barclays products

Page 47: Oracle ERP for Banking

Results Achieved by Customers

Suppliers FinanceGoods & Services Companies

Providers

CapitalMarketsFirms

Brokers

FinancialIntermediaries

Lloyds• Live on Oracle E-Business Suite:

• HR, Self-Service HR, Payroll, iProcurement, Financials

• Implemented with no customizations

• 30% ROI in first 18 months, expected payback in under

Channels Customers

ProductProviders

Business

BrokersInsuranceCompanies

Agents

• 30% ROI in first 18 months, expected payback in under

6 years

• Reduced average recruitment cycle from 12 to 7 weeks