Menu
SAP targets financial services sector with new business unit

SAP targets financial services sector with new business unit

Ramps up verticals play.

Christian Klein (SAP)

Christian Klein (SAP)

Credit: SAP

German software giant SAP is set to launch a dedicated financial services industry (FSI) unit in partnership with investment company Dediq, with the aim of further tapping into the banking and insurance industry. 

Pending regulatory approval, SAP and Dediq, also headquartered in Germany, will form the dedicated business unit, which will be jointly owned by the two companies.  

Both SAP and Dediq will provide the FSI business unit with funding, technology and development expertise, as well as a broad ecosystem of partners needed to establish the business as a major player in the FSI IT market. Dediq’s investment alone will be more than €500 million. 

Broadly, the two companies will work to jointly expand SAP’s financial services portfolio with a significant investment in new solutions. These solutions will be based on SAP software and be integrated into SAP’s overall portfolio and product roadmap, the companies said. 

Specifically, the new solutions will be built as part of SAP’s industry cloud solutions, based on SAP technologies and applications such as SAP HANA, SAP S/4HANA, SAP Business Technology Platform and others. 

SAP already has a long and substantial standing in the financial services industry, however the new FSI unit will fully focus on accelerated innovation in the area of core banking, core insurance and FSI-specific finance solutions to meet the needs for digital innovation and cost efficiency of financial services customers. 

The new solutions will be designed to cover the full cycle of banking and insurance operations processes, and help meet regulatory requirements. The offerings will be based on integrated data and provide customers with an opportunity to move FSI processes to the SAP Business Technology Platform in the cloud.  

“Through partnering with Dediq, we will significantly increase our support for the digital transformation of customers in the financial services industry and deliver innovative cloud solutions at an accelerated pace that help them transform their business holistically,” SAP CEO Christian Klein said.  

“Financial services is a key industry for SAP, and today we not only reiterate but also reinforce our commitment to this market,” he added. 

According to SAP executive board member Luka Mucic, the FSI market offers a “huge” opportunity for the vendor, adding that, jointly, SAP and Dediq would extend the vendor’s existing FSI portfolio to cover end-to-end banking and insurance processes. 

“Helping our customers to become more agile through digital business innovation and cloud technology will be front and centre for our new FSI unit,” Mucic said. “The new unit will be very flexible and customer-centric with full autonomy to set its strategic direction. At the same time, it will be a strong member of the SAP family.” 

“We strongly believe in the strategy of the new FSI unit,” said Dediq managing partner Matthias Tomann. “We see the future of FSI software solutions in the cloud. SAP’s platform has unrivalled potential when it comes to supporting the core operations of large-scale businesses like banks and insurers as well as new emerging ecosystems. Making this vision a reality in financial services is highly exciting to us.” 

SAP said it would continue to sell and support SAP solutions for enterprise information management and line-of-business solutions. The new FSI unit, on the other hand, will focus its investment on core FSI areas such as commercial lending, retail banking, core insurance as well as insurance finance and bank management.  

Pending antitrust approval, the new FSI unit is expected to be in place in the second half of 2021.  

SAP's concerted push into the financial services industry vertical comes as fellow software giant Microsoft makes its own moves into several industry verticals, financial services included. 

In February, Microsoft moved to deepen its industry vertical cloud play, launching three new industry-specific cloud offerings: Microsoft Cloud for Financial Services, Microsoft Cloud for Manufacturing and Microsoft Cloud for Nonprofit.  

At the same time, Microsoft also flagged the first update to its Cloud for Healthcare offering and the public preview timing for Microsoft Cloud for Retail, which was introduced in January.

On 13 April, the vendor took its verticals play a step further, confirming it had struck a deal to acquire artificial intelligence (AI) and speech recognition technology vendor Nuance Communications for US$19.7 billion, including debt, a move that will help Microsoft forge a deeper path into the healthcare industry, in which Nuance is a big tech player.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftSAP

Events

Show Comments