What You Need to Know: Transition your SAP core banking solutions from SAP ECC to SAP S/4HANA

As businesses evolve, so too must the technology that supports them. The latest version of SAP’s ECC (ERP Central Component) platform, a foundational tool for most SAP customers since the mid-2000s, is reaching its end-of-life in 2027. SAP S/4HANA, the next-generation ERP suite designed for the digital era, is the evolutionary next step and successor to SAP ECC. For banks and financial institutions, this shift brings significant opportunities for operational improvements, though it also presents challenges that need careful navigation.

SAP clients running the transactional banking modules Deposit Management (DM), Loans Management (LM), and Collateral Management System (CMS) in the Banking Suite Edition on ECC, will need to transition to the S/4HANA edition before the end of 2027 to continue receiving product maintenance and support. The first two modules, DM and LM, are traditionally also referred to as Bank Customer Accounts (BCA) and Consumer Mortgage Loans (CML).

The move from ECC to S/4HANA is a significant migration and requires not only a technical upgrade but also a thorough re-evaluation of processes, data models and workflows. Understanding the roadmap to and benefits of S/4HANA is essential for a seamless transition that ensures continuity and helps to unlock the full potential of SAP’s new platform.

What are the key benefits of the transition?

Modernised Data Management

• In-memory database: S/4HANA operates on SAP’s high-performance in-memory HANA database, which offers faster processing, streamlined data storage and real-time analytics capabilities. This architecture provides a substantial improvement in data processing and accessibility over traditional databases.
• Simplified data model: S/4HANA simplifies complex data models, removing redundancies and enabling easier data maintenance and reporting, especially valuable in banking where data consistency is crucial for operational efficiency and compliance.

Enhanced Operational Efficiency

• Integrated financial management: By consolidating financial and transaction management on one platform, S/4HANA improves visibility and control over bank operations, which leads to increased agility.
• Improved customer insights: With S/4HANA’s embedded analytics, banks can gain deeper insights into customer behaviour and transaction patterns, enabling better service, allowing for increased personalisation and a more robust customer experience.

Future-Proofing with Intelligent Technologies

• Automation and AI capabilities: S/4HANA supports intelligent technologies like AI, machine learning and robotic process automation (RPA). This enables banks to automate repetitive tasks, reduce operational costs and redirect resources to value-adding activities.
• Enhanced compliance: Regulatory compliance becomes simpler and more efficient within the S/4HANA environment, as it offers improved audit trails and tools to monitor and meet regulatory requirements.

• Cloud Adoption readiness: S/4HANA allows a structured transition to cloud-based solutions, supported by programs like RISE with SAP, which provide tailored methodologies, tools and services to ensure a smooth and efficient cloud transition.

   

What needs to be considered as part of a Transition Strategy to S/4HANA?

Having supported over 75 banks in their S/4HANA transitions, bancon has developed extensive expertise in designing effective transition plans. These plans are crucial for minimising risks and maximising the full potential of S/4HANA and should include the following key elements:

• Transition Scope Definition: Establish clear goals for the transition, highlighting the transformational elements to be included at each phase of the journey.
• System Readiness Evaluation: assess the existing ECC system to identify dependencies, customer enhancements and potential data migration issues.
• Cloud Adoption, Security and Data Strategy: Assess current and future state of information lifecycle management, data quality and potential data migration requirements. Decide which data needs to be moved across to the target state S/4HANA environment. If relevant, ensure the planned transition aligns with your cloud adoption strategy.
• Governance, Change Management and End User Training: Engage all key stakeholders and foster collaboration across departments. Conduct comprehensive training sessions to ensure smooth adoption.

• Post-implementation support: establish a support framework to address any issues after going live and monitor system performance to identify further optimisation opportunities.

   

The Future with S/4HANA

As financial services providers adapt to evolving technological and regulatory landscapes, S/4HANA stands as a robust platform designed to meet these demands. Its advanced data handling, efficiency and compliance capabilities make it the default destination for banks transitioning their core banking estate from legacy systems like ECC. By adopting S/4HANA, banks can improve operational resilience, better serve customers and stay ahead of the curve in an increasingly digital economy.

Ready to begin?

As a trusted partner to both SAP and SAP Fioneer, bancon’s team of experts can support your transition from ECC to S/4HANA, from strategic planning to full-scale implementation and aftercare. bancon have supported over 75 banks worldwide with S/4HANA transitions and core banking requirements. Our global reach enables us to advise on best practices from around the world, apply our wider experience to help deliver market first implementations, connect clients to share knowledge and provide critical insight into lessons learnt from previous projects.

Contact us to discuss how we can tailor our services to ensure a seamless upgrade that drives real value for your organisation.