Yesterday was the final day of EBAday and, as expected, many of the sessions focused on the challenges that banks are currently facing as they integrate SEPA with their domestic payments infrastructures while they migrate from legacy payments, ultimately turning the SEPA vision into reality. EBAday is an opportunity to reflect on the progress of SEPA, the milestones we’ve reached and the challenges that still lie ahead. From that perspective, several interesting observations have been made.

The first is the general consensus that SEPA Credit Transfers (SCTs) are now at a level where they are well-established across the market and are functioning properly. While still making up a low percentage of cross-border payments, countries such as Luxembourg and Cyprus are leading the way with the rest of Europe following at a more moderate pace. Interestingly in non-Euro countries such as the UK and Denmark, up to 80 per cent of cross-border transactions are SCTs.  

On the other hand, it seems that SEPA Direct Debits (SDDs) have made a somewhat slower start and are currently insignificant in terms of volume. It’s important to remember though, that cross-border direct debits didn’t exist prior to the launch of SEPA – so this isn’t just a new channel, it’s an entirely new product. Only time will tell if the demand for SDD will grow as SEPA migration deadlines are announced. For the banks, however, it is SDDs that will create business opportunities – as long as they are innovative in the way in which they sell them.

Looking ahead, the question of the day was what do we do next? How can banks stay innovative and agile in the current financial landscape? Two main considerations were raised – firstly banks need to build innovation onto a stable platform that is both resilient and reliable in order to achieve business success. Secondly, understanding the customer, whether it is a corporate or a consumer, is crucial to the process of innovation. Gaining a deeper awareness of customer needs and acting on these insights is the only way that innovation can deliver real value for the bank.

While these ideas aren’t revolutionary, conferences like EBAday give the industry a platform to bring them to light and hopefully make progress on how they can be developed further. With SEPA deadlines in the pipeline and regulatory changes across the industry, we can only hope that next year, we won’t be having the same conversations all over again.