The SAP FPSL supports various Financial services institutions to manage and handle finance products as a separate sub-ledger and enables instant financial insights at any level of detail for various analytics and reporting purposes. The solution is also dedicated multi-GAAP and multi-entity sub-ledger.
SAP FPSL supports in complying to various regulations of the financial services industry. Some of the key regulations are
- IFRS9 for financial instruments and investments
- IFRS17 for the accounting of insurance contracts
- US GAAP, USGAAP LDTDI
Having a detailed products subledger allows to manage the complexity of these regulations and the required data. SAP FPSL on SAP S/4HANA is available as a solution for banks to comply with IFRS9 and US GAAP or as a solution for insurers to comply with IFRS17 and US GAAP LDTI. SAP FPSL is installed as an add-on on top of S/4HANA and can be linked to the S/4HANA General/Universal ledger. The solution can also be used standalone with any other ledger of another vendor e.g. Oracle Financials.
One example of a solution architecture for such an implementation is shown in the following graph with various architecture layers:
As example the SAP FSDM – Financial Services Data Management can be used as central data layer that provides the data and services to support the SAP FPSL solution. The various front-office systems of the banks and insurers can provide all their transaction data to the SAP FSDM. In this case the FSDM would be the single source of truth for your data that is stored for various objects in the same format. The unified data model provides a basic framework for the format in which the data is stored. As a standardized and business-driven data model for financial services organizations, it comprises business domains such as business partners, bank accounts, loans, claims etc., each describing a subset of semantically related entities. SAP provides sample content for SAP Financial Services Data Management in order to improve the integration with SAP S/4HANA for financial products subledger, e.g. enhancements to the data model have been made to support the data provisioning for subledger accounting for loans, accounts, securities, and OTC derivatives are available.