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SEPA - moving the deadline just prolongs the inevitable

Our industry has become used to the moving of deadlines when it comes to industry initiatives and for some it perhaps creates a certain element of complacency.

Speaking to corporates in our market, I find a broad range of concerns about readiness for SEPA, regardless of when the deadline date is actually going to be implemented.

Over the last few years, treasurers have had to contend with a great many challenges, although some say there are always challenges, it’s just the degree of urgency that is placed upon us by the business that determines where we focus our attention!  There has been the backlash of the financial crisis and the ongoing issues within the financial industry not forgetting that there are businesses to be run, embracing growth or divesting unprofitable parts of an organisation, mergers, acquisitions, technology challenges, and tight profit margins placing pressure on resource and IT investment. The list goes on.

Whilst our government reports growth for the UK and there are improving signs of recovery, so there is a positive sense that we are now moving forwards. Let’s get back to the topic in hand, SEPA.

In all seriousness we know we can’t avoid the looming SEPA deadline.  On 22nd of January, the Permanent Representatives Committee of the Council of the European Committee announced it had approved the new date of 1st August, 2014. This revised end-date in the euro area is now the target for the migration of domestic and intra-European credit transfers and direct debits in euros towards SEPA credit transfers and SEPA direct debits.

Practically what does this mean for corporates and their bankers?  Well, it is fair to say most large banks are prepared and offer SEPA services to their customers today.  It seems, sadly, from recent market feedback that there are still many corporates who may not yet be sufficiently far advanced in their preparations.  There are a few key discussion points that may be well worth considering when preparing for the new SEPA migration deadline of 1st August.  Oh and did I mention that is right in the middle of the European summer holidays..!?

I digress.  Here are some tips for being prepared for a smooth SEPA migration that have been regularly raised in discussions in which I have been involved.  For some it may be very obvious but for others I hope they are helpful steps to get the process moving.

1. Have a plan – a SEPA migration plan. 

2. Evaluate the requirements of your organisation, and remember, these requirements should take into account all stakeholders from operational, technical, business - through to your legal and compliance teams.

3. Communicate your plan internally - this is business-critical.  It needs acknowledgement as an important project and the commitment of appropriate resources.

4. Resources - do you have sufficient internal people or do you need to consider outside help?

5. Evaluating the buy-in of SEPA expertise - many claim to be able to help but who do choose needs careful consideration.

6. Who will do what, by when? - From bank connectivity and standards through to mandate management, there are a great many small and essential steps to consider when formulating a plan.  Give your team time to plan effectively.

7. Testing – allow sufficient time for ample testing and refining to help ensure the go-live is as smooth as possible.

8. Managing the deployment may include the de-commissioning of legacy systems as well as training of staff and documentation of the new system.  The timing of the latter is critical and will need to be considered in the roll out plan.

9. Celebrate the success - everyone works hard today but when a special and important project comes to fruition and meets the organisation's needs, then remember to celebrate your team's commitment and efforts.  It won't be long before the next project comes along!

There is much to be taken from those very wise words “failing to plan is planning to fail”.  For a successful SEPA migration plan, never has it been so true that all the planning done ahead of the project start date will be time very well spent.



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