S/4HANA for Financial Services
Financial services transformations operate under intense regulatory scrutiny. Audit trails must be preserved, compliance reporting can't skip a beat, and data residency requirements add complexity. Here's how to navigate safely.
Financial Services Challenges
Regulatory Reporting
MiFID, Basel III, Solvency II, SOX - reporting must continue uninterrupted
Audit Trail Integrity
Complete, immutable audit trails for all historical transactions
Data Residency
Cloud deployment must comply with jurisdictional data requirements
Core System Integration
Complex interfaces with core banking, trading, and claims systems
Regulatory Considerations
Pre-Migration Requirements
- Document current regulatory reporting processes
- Map data lineage for all compliance reports
- Identify retention requirements by jurisdiction
- Assess data residency requirements for cloud
- Engage compliance & risk teams early
RISE Cloud Compliance
Data Center Location
Verify hyperscaler regions comply with data residency. SAP offers EU-specific options.
Certifications
Confirm SOC 1/2, ISO 27001, and industry-specific certifications (PCI-DSS for payments).
Exit Rights
Ensure data portability provisions meet regulatory requirements for vendor exit.
Audit Trail Migration
Critical: Financial services organizations often have 7+ year retention requirements. Your migration approach must preserve complete audit trails for all historical transactions while maintaining data integrity.
Option 1: Full Migration
Migrate all historical data to S/4HANA with document integrity preserved.
Option 2: Archive & Reference
Archive historical data with read-only access. Migrate open items only to S/4HANA.
Option 3: Decommission Legacy
Archive to certified archival system. Full legacy decommission post-migration.
Financial Services Integration Landscape
Banking Integration Points
- •Core banking system (T24, Finacle, etc.)
- •Payment processing & SWIFT
- •Treasury management systems
- •Risk calculation engines
- •Regulatory reporting platforms
Insurance Integration Points
- •Policy administration systems
- •Claims management platforms
- •Actuarial & reserving systems
- •Reinsurance interfaces
- •Agent portal & commission systems
Financial Services Success Factors
Early Regulator Engagement
Brief regulators on your transformation plans. No surprises during audits.
Compliance-Led Testing
Test regulatory reports first. Validate against current system outputs.
Period-End Timing
Cutover after month-end close. Avoid quarter-end and year-end.
Parallel Reporting Period
Run regulatory reports from both systems for validation period.
Data Lineage Documentation
Document data transformations for auditor questions post-migration.
Security & Access Reviews
Segregation of duties testing specific to financial controls.