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Rapid changes in the car and consumer financing business result in many challenges to financial companies which need to keep up with growing customer expectations.

One of the critical moments deciding on a customer’s loyalty is already the financing offer. Customers want to have money available immediately - whenever and wherever they are. They expect to receive clear, complete tailor-made price information.

Therefore, flexible offers must be prepared based on the current customer product mix by anticipating and influencing their consumer behavior.

Selling is not a one-time event: the process could continue during the financing period as the bank may choose to motivate customer to accept additional offers or use existing products more actively.

With current business volumes, those individual offers cannot be prepared manually, so why not implement system intelligence? Following this implementation, the system evaluates current customer behavior and selects groups of customers to whom the bank provides additional offers.

But how to achieve this intelligence when a company operates many legacy applications from different vendors who do not communicate with each other?

An approach promoted by SAP is to consolidate the core banking system on one platform which concentrates all operational data into one database. If this system is supported by in-memory database such as SAP S/4 HANA, it enables instant analysis of such data and automatic reaction to predefined situations which may happen during financing life cycle.

At a private goods and car financing provider in the Czech Republic, SAP combines flexible account and card management functionalities with collaterals handling, financials and extended financial analytics to support flexible financial offerings with the aim to allow its customers to buy cars or different consumer products, and adjust repayment forms and conditions to their changing life situations.

We can imagine that such situations apply not only for the moment of purchase, but also at other stages in life which require different responses. Customers’ financial status might change -- they may start a new job, move somewhere else, commit a crime, or even die. Property which serves as a collateral can be stolen or destroyed. Customers may cease to repay their loans or wish to pay their obligations in advance.

Based on any of these events, the bank needs to perform coordinated actions and adjust its records and behavior. The solution therefore supports different types of insurance contracts and involvement of partners such as layers, legal experts, or collection agencies.

Using a wide range of functionalities spanning from reports, alerts, process orchestration and workflow management, up to artificial intelligence including machine learning – the described system can ensure automatic reaction to these previously mentioned events, and ensure that the bank does not miss any business opportunities. Additionally, it also manages any risks and provides good financial performance of its contacts.

Many actions are completed automatically by the system, so the bank users only need to monitor the results and fine-tune their processes and rules.

This flexibility allows financial institutions to survive in the current swiftly changing world: they are organisms, constantly evolving and adapting, and a state-of-the-art intelligent information system such as SAP S/4HANA is the vascular system which keeps them alive.

The project is delivered using our SAP Value Assurance solution combining top subject matter experts with local resources, making it easier for the bank to adopt and thrive within its change management program.

If you have any further questions in regards to this article, feel free to reach out to Jiří Haluza (Senior Consultant - PU Banking).