The research, sponsored by transactions-based vendor VocaLink, was conducted during August and September with over 100 European and global banks.

Only eight per cent of respondents are already fully Sepa-compliant and over half do not expect to be able to meet the New Year deadline for Sepa credit transfers. Banks are even more pessimistic about the preparedness of their corporate customers with 81% believing they will not be able to provide Sepa payment instructions until after the proposed 2010 deadline.

"With Sepa compliance just around the corner, the thought that many European banks do not have a solution for reach is a cause for concern," says Martin Wilson, chief marketing officer at VocaLink.

Consequently banks are currently focused on encouraging their clients to migrate their payments to Sepa-compliant schemes, with 54% citing it as the most important issue facing their business.

However, while the major banks appear ready to support corporate migration by reformatting legacy payments instruments in a Sepa environment, the European Central Bank has warned that a prolonged dual implementation phase would prove costly to the industry and slow the take-up of innovative new payments practices.

In other findings, direct debits - which are slated for introduction in 2009 - were also highlighted as a 'major concern' by 35% of banks, while 44% belived they would be 'difficult to manage'.

A hard copy of the full report can be picked up at the VocaLink stand (B28) at Sibos in Boston. A PDF will be made available for download after the conference.