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Corporates still in the dark about SEPA

The latest newsletter from the European Payments Council (EPC) provides some interesting insights into SEPA migration to date, but offers little advice and guidance to the corporate sector about how best to prepare for SEPA migration. Given the disagreement and confusion around how best to encourage migration to the SEPA Schemes, it is no surprise that many corporates are still in the dark when it comes to their own SEPA migration, both in terms of the timeframes and the required changes that need to be made in order to take advantage of the channel. As the EPC newsletter states, ‘the majority of market participants recognise that successful completion of SEPA is contingent upon setting an end date for migration’, and while the Commission, the EPC and the SEPA Council debate on the exact format this should take, corporates are left wondering how and when these changes will ultimately affect them.

Without a clear and defined end date, there is a risk that the industry will retain its current attitude of ‘wait and see’, and SEPA will slip down the agenda as other, more immediate projects take priority. However, there is also a major opportunity for the more proactive banks to work with corporates and support them through their SEPA migration. That way banks will be increasing customer satisfaction and hopefully loyalty at the same time. In particular, processes such as converting bank account data into the new IBAN and BIC formats could require support or advice from banks, particularly where the existing data is incorrectly formatted or contains hidden errors.

Banks can seize this opportunity to develop relationships with their corporate customers or perhaps even acquire some new ones. Ultimately however, the banking industry’s ability to take a proactive approach with its corporate customers will be held back until the various European stakeholders are able to agree the exact requirements for SEPA. Until that happens, corporates are likely to remain wary and take up will remain relatively low for the foreseeable future.

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Comments: (1)

Uri Rivner
Uri Rivner - BioCatch - Tel Aviv 27 July, 2010, 07:52Be the first to give this comment the thumbs up 0 likes

Another thing SEPA leadership needs to do is consider fraud implications. Once SEPA is widely accepted, the game changes for online banking fraud: if you compromise an online banking account anywhere in the Euro zone, you no longer need to move the money to a bank in the same country. 

Let me give a specific example: say you have a victim's PC infected with the Zeus Trojan, a massively popular and particularly nasty piece of malware, on a German PC. Once the victim logs into their online banking, your Zeus will automatically send 5,000 euros to a 'mule' account - a destination bank account controlled by a collaborator to remove any traces leading to you.

If before SEPA you had to recruit the mule locally in Germany, now you have the entire EU to look for collaborators. You can recruit people in Latvia, Finland, and Romania; whatever control the German banks had on looking for suspicious in-country transfers goes away.

I'm not talking about a theoretical thing: in fact, RSA found a Zeus Mule database in May 2009 with a special SEPA MULE section, which included mules from the countries mentioned above. There were also 3 transfers of up to 12,000 euros from German bank accounts to mule accounts outside Germany, using the SEPA scheme.