SAP is to set up a dedicated financial services unit in a joint venture with investment firm Dediq that will see the ERP vendor develop a new suite of products covering the full spectrum of commercial banking and insurance operations.
Both SAP and Dediq will provide the new FSI Unit with the funding, technology, and development expertise. Dediq's investment in the unit will be $500 million, while SAP intends to transfer a “high triple digit” number of staff to work in the business.
“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,” says Christian Klein, CEO, SAP SE. “Financial services is a key industry for SAP, and today we not only reiterate but also reinforce our commitment to this market.”
More than 80% of the top 1000 banks and insurers are SAP customers, but the new unit will take the firm deeper into nuts and bolts of financial services, covering the full cycle of banking and insurance operations processes. They will be based on integrated data and provide an opportunity to move processes to an industry-specifric version of the SAP Business Technology Platform in the cloud. As an example, SAP says that lending packages for banks will cover all stages from origination and credit risk assessment to re-financing and bank management, with all related data kept in one place.
“The FSI market offers a huge opportunity for us,” said SAP board member Luka Mucic. “Jointly, we will extend our existing FSI portfolio to cover banking and insurance processes end to end. Helping our customers to become more agile through digital business innovation and cloud technology will be front and center for our new FSI Unit.”
Pending antitrust approval, the new FSI Unit is expected to be in place in the second half of 2021. Corresponding preparations are scheduled to start in the coming weeks.