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Bob Mackman

Bob Mackman

Bob Mackman - Mackman Associates

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EBAday 2010 - How far we've come and where we're going

28 May 2010  |  3510 views  |  1

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.

TagsPaymentsWholesale banking

Comments: (2)

Bob Lyddon
Bob Lyddon - Lyddon Consulting Services - Thames Ditton | 02 June, 2010, 15:04

Dear Bob - good post :) Not having attended the event, it would interest me to know how the market penetration of SEPA products was characterised at the event. I have seen a market penetration figure for Italy of 30% for example, but I do not know if an Italian consumer or treasurer would recognise the resulting services as either being in themselves - or being based on - SEPA products. Even if the bank-to-bank piece is using the SEPA Data Model/formats plus some AOS, is it not quite conceivabe that the service that is projected through by the bank to the user is perceived by the user as a legacy service with the one or other added feature, plus PSD compliance and some price/terms improvement? I would have thought this a more likely scenario than a direct purchase by end users of SEPA products in preference to legacy ones. There was, though, discussion specifically related to Italy that only the SCT could be used for an 'on behalf of' payment in a Shared Services context and in a manner that satisfied local AML requirements, whilst the legacy product had no field for indicating the Payer Information of the underlying subsidiary.. and that that this function in the SCT would cause a big uptake in SCT usage for national payments. Interested in your view. Bob


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Bob Mackman
Bob Mackman - Mackman Associates - Alderley Edge | 08 June, 2010, 12:21

Thanks Bob - I think it's easiest if I come back to you directly on the points you raise, so I'll send you an email in the next few days.

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