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Happy New SEPA

About a year ago, in my blog ‘On your marks for SEPA’, I commented on the European Commission’s proposals for the setting of end dates for the migration from legacy instruments to SEPA credit transfers and direct debits. I wrote: “At least the whole industry knows that serious planning can now no longer be delayed. We don’t yet have the final ‘go’ but we now know we’re under starter’s orders.” Well, twelve months later and it seems that we now have the final ‘go’ - 1 February 2014 is when the witching hour will be upon us.

But there is still little evidence that serious planning is underway. It seems that a combination of the ‘Eurozone crisis’ (to give it a name) and the wait for the end-date regulation has induced a state of dormancy in many banks. That can no longer be justified. Sound business sense must prevail and SEPA must be viewed as an opportunity, not a compliance exercise.

It’s the time of year for resolutions. Banks must resolve to enable SEPA payments and thereby transform their payments business and fully respond to their customers’ needs. The wait really is over.

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Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 January, 2012, 10:18Be the first to give this comment the thumbs up 0 likes

I think the real challenge is that SEPA only seems to be a compliance exercise. The onus is really on SEPA / EPC to promote it differently if they want banks and corporates to view it as a business opportunity. 

Bob Lyddon
Bob Lyddon - Lyddon Consulting Services - Thames Ditton 06 January, 2012, 12:22Be the first to give this comment the thumbs up 0 likes

Hi Paul - yes, fully agreed, it is time for resolution and trust (although Resolution Trust was the organisation charged with liquidating defunct Savings & Loans, so maybe not the best name). However, the SMED timing is extremely tight and 2012 IT budgets probably do not contain large amounts for SEPA (or for anything!); one is unsure whether the authorities realise that. It will only be mid-year at the earliest when the national central banks issue their definitive lists of which schemes have to migrate by when; the definitive SMED should at least clarify whether users have to state IBAN+BIC or just IBAN. But then there may be a further wait to see which countries adopt the derogation rights over a delay in compelling users to put bulk files in XML, or allowing consumers to delay directly using IBAN(+/-BIC). And then there is the question of who will create the utilities needed to permit these derogations to operate in the customer-to-bank space but not in the bank-to-bank space. All this should really be defined by mid-year 2012 for the purposes of setting the 2013 budget and scoping and planning the IT work needed to create the target environment for migration (unless we believe that the environment already exists). If the banks do their IT work in first half of 2013 then it only leaves 7 months for migration/testing/conversion of the customers. With a 'Big Bang' end date for CT and DD of February 2014 when the market penetration now is 24% for SCT/1% for SDD, a miraculous last lap will be needed merely to achieve a modicum of compliance, let alone for banks to mutate into either Operational Excellence or Strategic Advantage (the two incarnations beyond Minimum Compliance). I am also of the opinion that there will be an additional large block of time elapsing during which national communities will define AOS to link the old to the new. No-one has ever done a comprehensive scoping of the data differences between SCT and all the legacy schemes that will appear on the central bank lists as correlating to it: the delta has to be filled with AOS or either the banks' or the customers' electonic processes fall down. Cheque, please!