Community
Looking into the chasm: EBADay 2009 highlights the need for bank-corporate collaboration on SEPA
It comes as no surprise that for both corporates and banks at this year’s EBADay cash management, liquidity and risk management are high on the agenda. Yet, SEPA is also still being discussed as a necessary step forward for the payments industry. The project clearly still faces many hurdles; many of which are connected to corporates’ and public bodies' interest in the service. Most corporates consider SEPA to be purely a banking project and cannot see the benefits for their own organisations.
As a result, this year’s EBADay has really highlighted the extent to which the banking sector needs to translate SEPA into something meaningful for corporates if the service is to take off. Banks need to start communicating the benefits of SEPA to their corporate customers; benefits such as the costs efficiencies associated with the consolidation of payment systems and processes by reducing the number of bank accounts that corporates hold and the number of payments formats they need to enable payments to go through. Yet, the banking community seems reluctant to place much effort into promoting the SEPA service to their corporate customers as it questions whether the majority of corporates will actually make use of the service at all, at least within the next five years.
The end result is that the corporate and banking communities find themselves in what was described at EBADay as a "chicken and egg" situation where one is reluctant to act before the other. However, what banks may have failed to realise to date is that while corporates cannot force a transaction to go via SEPA mechanisms, they can impede it by providing non-IBAN and BIC data. This clearly puts the corporates in a position of power. Given that many banks are currently gearing up for SEPA, they need to engage with their corporate customers if communities are to hit their targets to migrate to SEPA once an end-date has been set.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Sireesh Patnaik Chief Product and Technology Officer (CPTO) at Pennant Technologies
02 October
Jelle Van Schaick Head of Marketing at Intergiro
01 October
Ruchi Rathor Founder at Payomatix Technologies
30 September
Jamel Derdour CMO at Transact365 / Nucleus365
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