Like trains SEPA had a timetable, which like the railways is open to change due to foreseen and unforeseen circumstances. The SEPA project has certainly been on the slow line keeping up the train analogy, suffering from inert banking involvement and an almost complete lack of enthusiasm by just about everyone needed to make the project, not just happen, but work to its objectives.

But SEPA has been working for years, just not working to the level that has gained volume or a critical mass of users. This type of industry project is always difficult to design and then implement to the degree of success that would make it a success. Although success is determinant on what criteria is used to measure it. To some SEPA is a success, but when measured in normal logical terms this is not really the case.

It is the lack of take up by banks and corporates that caused political involvement to shock the market into SEPA life. The investment in new technology to enable SEPA compliance is significant as is the changing or adaption of systems and manual processes. This would be bad enough if it was just the banks but this also impacts corporates.

Way back at SIBOS in Sydney I counted dozens of software firms offering SEPA solutions, I doubted then as I do today if many of these systems actually exist.  Did they have functionality and designs for SEPA Credit and debit transfers or were they expertly presented PowerPoints?

Apart from the marketing expertise of software vendors and consultants, I have failed to see any such expertise from the banks about their SEPA based services and even less about how they are producing solutions. I suspect most banks and know for a fact only a few banks, invested in the minimum to comply with the SEPA project. Who was auditing SEPA readiness at banks? Was there a public display of SEPA capability? What were the banks doing to market their SEPA services to their corporate customers and prospects? Was there a pricing policy in place? Were there any signs of competition between the banks to capture new customers because of SEPA? I find myself answering all these in the negative and its not surprising therefore that the SEPA project stalled badly and required political and regulatory intervention. 

As we look forward to 2014 and hopefully SEPA explosion, I find that I am once again questioning the SEPA project. The timescales for banks and corporates to get SEPA weaving were in my view quite generous and should have been much shorter and with greater transparency concerning industry preparedness. However, we are now entering the final year with the finishing post looming and it’s therefore disheartening to read the latest research from Experian stating that only 30% of credit transfers and even less, a minute 2% of direct debits are compliant. The Experian research also highlights alarming percentages of errors in data transference, a core competence within SEPA.

How can the finance industry be allowed to meander through the SEPA project with almost no energy, or it seems, desire to implement the project to its fullest benefits. There is clearly limited business incentive, if any, and hardly any incentive to invest in the technology and marketing costs needed to achieve critical mass usage and transaction volume. It’s almost industry anarchy!

The answer too many of the problems of SEPA implementation and use, has resulted I am sad to say to the necessity of the big stick approach. That’s not just threatening to take the cane from the closet but using it liberally to demonstrate discipline and enforce direction. Are the regulators and their political masters strong enough to use force or are they just lily-livered civil servants and political saps? What do you think?