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Banking: Learn How Workday Financials Is the Right
Fit for Financial Institutions in the Face of Change
Housekeeping For Today’s Webinar
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We will try to answer these during the webinar, if time allows.
Speakers
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity.
All rights reserved. NDPPS 668279
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.
kpmg.com/socialmedia
Contact:
David Cousineau
Principal, Advisory
T: 702-578-0997
Mike Brady
Manager, Advisory, Workday Practice
T: 512-320-5131
Some or all of the services described herein
may not be permissible for KPMG audit
clients and their affiliates.
This presentation may contain forward-looking statements for which there are risks, uncertainties, and
assumptions. If the risks materialize or assumptions prove incorrect, Workday’s business results and
directions could differ materially from results implied by the forward-looking statements. Forward-looking
statements include any statements regarding strategies or plans for future operations; any statements
concerning new features, enhancements or upgrades to our existing applications or plans for future
applications; and any statements of belief. Further information on risks that could affect Workday’s results is
included in our filings with the Securities and Exchange Commission which are available on the Workday
investor relations webpage: www.workday.com/company/investor_relations.php
Workday assumes no obligation for and does not intend to update any forward-looking statements. Any
unreleased services, features, functionality or enhancements referenced in any Workday document,
roadmap, blog, our website, press release or public statement that are not currently available are subject to
change at Workday’s discretion and may not be delivered as planned or at all.
Customers who purchase Workday, Inc. services should make their purchase decisions upon services,
features, and functions that are currently available.
Safe Harbor Statement
Financial Services Industry Question
Wishful Answer
Some Real Answers
Source: https://www.capgemini.com/resource-file-access/resource/pdf/backing_up_the_digital_front25_11_0.pdf
Globally, banks continue to
rely on core legacy IT systems
originally implemented in the
1970s and 1980s.
Top Challenges for Financial Services
The new normal of running business is facing:
• Unprecedented change
• New market entrants and demands
• Customer demographic shifts
• Disruptive technologies
Exponential Change Is Ahead
“We stand on the brink of a technological revolution that will
fundamentally alter the way we live, work, and relate to one
another. In its scale, scope, and complexity, the transformation
will be unlike anything humankind has experienced before.”
—Klaus Schwab, The Fourth Industrial Revolution
HRManagement
FinancialManagement
Projects AnalyticsPlanning
New Approach
Learning
Technology Designed for the Digital Age
Onearchitecture
Onecommunity
Onesource of truth
Oneexperience
One security model
Oneversion
13© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
The Enterprise Cloud for Finance and HR
GLOBAL AT
THE CORE
TECHNOLOGY FOUNDATION
SINGLE CODE LINE
CONSUMER UI
MOBILE COLLABORATION
ACTIONABLE
ANALYTICS
EXPENSES
PAYROLL
RECRUITING
HUMAN
RESOURCESFINANCIALS
TIME TRACKINGINVENTORY
PROJECTS
PROCUREMENT
PLANNING
TALENT
LEARNING
IN-MEMORY
OBJECTS SECURITY
BUSINESS PROCESS FRAMEWORK
INTEGRATION
CLOUD
REPORTING
& ANALYTICS
The Difference?
Journal Entries
CodeBlock
Chart of Accounts
Legacy ERP was built
for accounting…
Workday is built for
business…
• Summarized data
• Low flexibility for change
• More reconciliation needed
• More details & dimensions
• Highly flexible architecture
• Easier reconciliation process
Fund
Project
Region
Product
Supplier
Branch
Channel
Anything
Business
Event
Access to Transactions & Real-Time Data
Real-Time Transaction Data
Fund
Project
Region
Product
Supplier
Branch
Channel
Anything
Business
Event
The Code Block Challenge
DEPARTMENT PRODUCTACCOUNT PROJECTCOMPANY
Finance &Accounting
supplier
group
branch
brand
supervisor
asset
Procurement &Operations
campaign
channel
industry
location
territory
segmentloan
customer
Sales &
Marketing
brand
supplierbranch
territory
department product project
industry
loan
asset
group
supervisor location
channel
segment
campaign
customer
accountcompany
Banking prototype solution overviewDavid Cousineau and Mike Brady
June 6, 2017
18© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Our visionThe purpose of this prototype is to demonstrate how Workday Financials can support key financial
services industry requirements. The banking prototype will act as an accelerator for potential
banking/capital markets customers.
— Develop a financial data model/accounting
structure that allows financial services firms
to efficiently access their data
— Identify additional loan data attributes
required by financial services organizations
— Configure the average daily balance rule such
that average daily balance can be reported on
at the product level
— Identify the elimination rules required to
perform consolidation
— Validate accounting structure through
the generation of managerial and
regulatory reports
— Integrations with front-end systems (e.g.,
trading platform, loan management system,
etc.) were simulated using the Submit Journal
EIB (i.e., Excel spreadsheet load)
LoansConsolidation
Average
daily balance
Reporting
Workday
Our prototype
19© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Key items to considerBanking prototype is the groundwork to
kicking off an effective implementation. It
allows the client to do the following:
… So they can have more bandwidth to
focus on the following:
Start with a prebuilt
financial data model,
business processes, and
industry-specific
configuration
Have recommended
approaches and
configuration already
in place at the start of
the project
Speed up the
implementation
process while still
effecting streamlined,
efficient, and effective
processes
— Identifying unique
requirements to their
business specifically
— Working through
complicated requirements
that need more attention
— Change management
— Training
— Testing
20© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
KPMG’s value-addFinancial services system implementation by a financial services firm
Financial services is core to KPMG:
KPMG fundamentally understands the transaction types and intricacies associated with financial services firms as we
have been auditing and advising the industry since our inception
Leveraged this expertise to develop a financial services prototype tenant highlighting the key processes and
complexities financial services firms encounter
Prototype tenant developed via a cross-functional effort between Audit and Advisory SMPs with deep-rooted
knowledge of the financial services industry
Core understanding and efficiencies gained:
Result: A more efficient and accurate implementation fully prepared to address the
challenges of daily operations in the financial services industry
• Less need for knowledge transfer to us - allows for additional focus on system knowledge transfer to client team and design validationImplementation focus
• Identified core lines of revenue and spend common to the financial services industry – design to address the deltaIndustry-specific predesign
• Average daily balance, loan origination/repayment, transfer pricing, fund inception, regulatory reporting etc.
Workday solutions for unique requirements
Banking prototype demonstration
22© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Leverage Workday financials platformWorkday’s unique financials approach:
— Translations
— Eliminations
— Consolidations
— Currency translation adjustment generation
— Revaluation
Expanding upon delivered functionality:
— Automate cash flow reporting
— Automate cash-basis reporting
— Currency translation adjustment
23© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Banking Prototype FDM framework
1) Cost centers and cost center
hierarchies
2) Ledger accounts and ledger account
summaries
Company Cost
center
Ledger
account
Revenue
category
Spend
category
Region Salesitem
Financial
services –
Inv Mgmt
U.K.
Financial
services –
Banking
Residential
mortgages1000 ATM fees
Interest
expense on
deposits
U.S. –
Central
Convertible
bond
Human
resource
operations
2000
Bank charge
and credit
card fees
Wage and
salary
U.K. –
London
Financial
lease
Alternative
investment
group3000
Other
interest
income
Fraud
expensesU.S. –
West
Mutual
funds
Equity and
related
investments
5000
Venture
capital
revenue
Assessment
charges
U.S. –
Northeast
Certificate
of deposits
Financial
services –
Inv Mgmt
Fixed
income
products
4000
U.S.
Treasury –
Interest
income
(Blank)U.S. –
Southeast
U.S.
Treasury –
Security
1) Revenue categories and revenue
category hierarchies
2) Spend categories and spend category
hierarchies
24© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Demonstration #1: Average daily balanceThe average daily balance method is a way of calculating interest by considering the
balance owed or invested at the end of each day of the period rather than the balance owed
or invested at the end of the week, month, or year.
1) Sales items
2) Average daily balance rules
3) Assigning average daily balance to a company
4) Average daily balance reporting
Average
daily balance
calculation
Sum of the
daily balances in
the billing period
Number of days in
the billing period
Annual interest rate
Number of billing
periods per year
25© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Demonstration #2: Loans
1) Custom objects/custom fields
2) Loan reporting
Custom list
— Loan issuer country
— Loan payment status
— Loan lien priority type
— Loan product type
— Loan purpose type
— Loan amortization type
Date
— Loan maturity date
— Loan first installment due
date
— Loan interest-only end date
Free text
— Loan broker nameCurrency/numeric
— Loan origination amount
— Loan actual unpaid
principal balance
— Loan borrower note rate
FY 15
26© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Demonstration #3: Consolidation1) Companies and company hierarchy
2) Elimination rules
3) Configuration details
27© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Demonstration #4: SEC reporting 1) 10-K income
statement
2) 10-K
balance
sheet
= Spend hierarchies
= Spend categories= Ledger accounts
= Revenue hierarchies
= Revenue categories
28© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved.
Demonstration #5: Regulatory reporting (FR Y-9C) 1) FR Y-9C income
statement
2) Balance sheet
3) Schedule HC-B –
Securities
4) Schedule HC-C –
Loan and Lease
Financing
Receivables
5) Schedule HC-D –
Trading Assets
and Liabilities
6) Schedule HC-E –
Deposit Liabilities
7) Schedule HC-F –
Other Assets
8) Schedule HC-G –
Other Liabilities
= Spend hierarchies
= Spend categories
= Ledger accounts
= Revenue hierarchies
= Revenue categories
Workday’s Commitment
to Financial Institutions
OR
Designed for what’s to come.Chained to the past.
Who Is the Right Partner for Change?
Workday Understands Your Needs
Create New
Sources of Growth
Operational Risk
and Control
Prepare for an
Unknown Future
?Regulations
Workday Confidential
• Rapid Growth Through M&A &
launch of new products & channels
• Find and retain the top talent in
multiple locations
• Running a business as a unified
enterprise instead of multi-regional
• Managing data on workers in multiple
locations
• Quickly react to new market
demands
• Make rapid changes to
organizations and business
processes
Workday Pace of Innovation
2006–2013
1
Financial
ManagementHuman Capital
Management
Payroll
U.S.
Expenses &
Procurement
Time
Tracking
Big Data
Analytics
Recruiting Payroll
U.K.
2014
Inventory Payroll
France
Learning
Planning
20162015
Cloud Connect
Benefits
Cloud Connect
3rd Party Payroll
Payroll
Canada
Grants
Management
Student
Recruiting
Projects
Projects
Billing
Student
Admissions
Student
Financial
Performance
Management
Prism
Analytics
Data-as-a-
Service
2017
SINGLE TECHNOLOGY PLATFORM
Analyst Feedback
“Workday’s latest release builds on its commitment to develop a modern cloud- based financial management solution for multinational enterprises in services-based industries.
With many organizations nearing replacement for their legacy financial management applications, Workday’s latest offering provides CFOs with an opportunity to upgrade and modernize their 25- to 30-year-old applications.
More importantly, the global capabilities, industry-specific functionality, and reporting and analytics give services-based organizations hope that a new modern replacement is available.” Source: Constellation Research: RESEARCH REPORT: TRENDS – Workday 26 Beefs Up Cloud Software for Financial
Management, 09 June 2016, R “Ray” Wang.
“By 2018, at least 25% of new core financial application deployments in large enterprises
will be public cloud SaaS.” Source: Gartner (Predicts 2016: Financial Management Applications) November 2015.
“An increasing number of organizations want to move to cloud solutions of a different
vendor or to a different cloud platform of their current vendor.”Source: Gartner, “Survey Analysis: Gartner-FEI Study Helps You Understand the CFO’s Technology
View in 2016,” by John E. Van Decker, Nigel Rayner, Christopher Iervolino, 13 July 2016.
Our Financial Services customers cover every size &
segment of the industry
Financial Services Customers of Workday Financials
Key Differentiators
Adaptive foundation – future proof
Single code base – no internal integrations
World class user experience
Innovation that drives success
Happy customers!
Q&A
Thank youChris Artemenko
Product Strategist,
Financial Services, Workday
T: 1-312- 999-4100
Mike Brady
Manager, Advisory, Workday Practice
T: 512-320-5131
David Cousineau
Principal, Advisory
T: 702-578-0997