22 December 2014

Craig Ramsey

Craig Ramsey - ACI Worldwide

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Finextra@Sibos

The Finextra@Sibos community is open to all delegates and exhibitors at the annual financial markets conference organised by financial messaging network Swift.

At last, a SIBOS where conversation around SEPA is welcome

29 October 2012  |  4971 views  |  4

After years of speculation, this week in Osaka we finally appear to have a SIBOS with a SEPA conversation worth having. With the date for compliance across the Eurozone now set for February 2014, we are beginning to see a move by corporates to start to adopt SEPA standards.

The business case for migrating ahead of the 2014 date has always been a tough one, ranging from pure compliance by some corporates, to others needing to invest heavily in their own treasury operations and technology. With the tough times that we are all facing, spending money on a compliance project that some see as a backward step for their payments processing was always going to be a difficult request.

Now, particularly for the enterprise, meeting the deadline could be a significant challenge. February 2014 is approaching fast and sure enough many corporations will not be able to fully leverage the benefits of SEPA because they simply have too much to change to support the technical message standards. So we are left with many having to take a tactical approach to SEPA, rather than take the strategic view.

Which is, of course, exactly what the banks did.

As of 2014, one of the key compliance requirements stipulates that companies must provide payment data to financial institutions in XML format. The problem being is that corporations are not currently using this standard, with most not even having XML present. Rather they are sticking with the ‘legacy’ formats which have worked fine for them for years. A SEPA guidance document published by the European Banking Federation’s Payments Regulatory Expert Group in September clarified that a translation service can be deployed, with the conversion taking place from the customer legacy format to the new XML standards.

However, this will only be permitted until 2016, after which corporations must have completed their projects to provide XML conversions themselves. The banks have taken 10 years to get this far, but effectively we’re only allowing the hundreds of thousands of corporations around Europe just 3-4 years.

Banks can finally add a service to SEPA that customers want to buy, and sure enough banks are now busy creating front-end translation hubs to support this customer demand. But there’s another problem - it’s only a short term fix. With banks keen to offer this service, and customers seemingly keen to implement this strategy, there appears to be little reason why this XML translation cannot remain as a longer term solution.

Regardless, many have gambled on delaying SEPA compliance for too long, and there is little doubt that with less than 18 months until the deadline it will remain as one of the key discussions at this week’s SIBOS.

TagsSibosWholesale banking

Comments: (4)

A Finextra member | 29 October, 2012, 16:39

Not before time Craig and it cant come soon enough.Corporates have been denied for far too long.Lets hope that the rush to the tape is fast and succesful

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 31 October, 2012, 12:48

While it was enunciated a long time back, isn't the basic principle behind SEPA still the same, namely, equalization of fees for domestic and cross-border payment transactions within the EURO zone? It's not surprising that SEPA's threat to reduce their payments fee income would push banks to treat SEPA as a necessary evil. However, shouldn't its converse - the opportunity to cut down overall payment processing costs - provide the required pull effect for corporates? If it lacks business case for both banks and corporates, then I can't help wondering who SEPA is really targeted at.

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Neil Burton - Self - London | 02 November, 2012, 20:57

Now that we have a certain end-date, otherwise known as the start-date, hopefully the agenda will turn to more important matters. On the whole, SEPA makes transactions between € countries more efficient. That's only a part, and possibly a small part, of most corporates needs. How can we resolve the auto-reconciliation of receivables with invoices - a longstanding requirement from corporates. They don't say 'for transactions in €'. They mean all the currencies of the countries with which they import and export.

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 03 November, 2012, 11:24

Needs of corporates will justifiably keep growing with time. But, before loading them into external systems from banks and SEPA as additional requirements, it helps to look inside corporates and see how well their internal systems can cope with such changes in the first place. Having worked with several corporates on ERP and MDM solutions, most of them can't handle auto-reconciliation between their own Sales Orders, Invoices, Delivery Notes and Installation Reports or across their multiple internal channels. For example, when my 3-in-1 printer-scanner-copier device recently failed, I had to call the manufacturer's call center to log a complaint. I had registered the device on the company's website immediately after installing it but the CSR had no record of me or my device (My device was bought a month ago, I have been a registered customer of this company for 10 years). I had to go through the entire process again. The printer's self-diagnostics printout carries a 14-digit serial number but the CSR insisted that I had to give him a 10-digit number only. The moment we sorted this out, my ticket was assigned to another company, which was the manufacturer's authorized service provider. Chaos multiplied at this stage - the same device even had a different model number on this company's system!  

I could go on and on but my point is, corporates can't justifiably demand auto-reconciliation of receipts coming from external systems with internally-generated invoices as a Day One feature from SEPA.

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job title Solutions Lead EMEA
location Watford
member since 2009
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Craig Ramsey has worked in the payments industry for over 25 years, working with banks and software vendors to improve solutions to customers. As Solutions Leader for Transaction Banking at ACI, Craig...

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