Tier one banks in Europe have set aside as much as EUR20 million each to attain compliance with the EU's Payment Services Directive (PSD) by November, with about 30% of the budget earmarked for technology changes.
Working with Finextra, Accenture surveyed nearly thirty EU banks, including nearly 20% of the top 100, to assess industry-views, core challenges to implementation, and bank readiness for the PSD, which is being introduced to harmonise the EU's legal payments infrastructure.
EU bank respondents express confidence in their ability to meet the 1 November compliance deadline, with a vast majority (90%) saying they will be legally compliant on time and nearly three-quarters (72%) saying they expect to be fully compliant by November. Legal compliance to PSD is achievable without full implementation.
Compliance costs appear to vary dramatically, with PSD budgets ranging from less than €1 million to more than €20 million, according to the survey. IT changes account for about 30% of the scope of PSD programs, with changes to contract terms and conditions the next biggest component, followed by internal and external communication.
IT investments will involve updating customer-channel and back-office technologies to support new requirements, such as real-time transaction-processing for immediate availability of funds, says Accenture.
According to the survey, most EU banks anticipate no major competitive threats from PSD. Nearly two-thirds (63%) of respondents say they do not consider new entrants - such as new payments organisations, telcos and utilities - to be a significant threat to their business.
By contrast, more than one-quarter (26%) see PSD as an opportunity to form new strategic partnerships or acquire new entrants.
Only 11% foresee serious competitive threats emerging from the directive.
While the goal of the directive iss partly to promote competition and payments innovation within the EU, the survey suggests that a new wave of product innovation is unlikely to come immediately after November. Indeed, nearly half (48%) of respondents indicate that they have no immediate plans to launch new products under PSD.
A vast majority (82%) of respondents consider PSD primarily as an opportunity to offer pan-European payments and banking, while only 14% and seven percent of banks see it is an opportunity to acquire new corporate customers and new retail customers, respectively.
Nonetheless, Accenture believes that the move to a more efficient pan-European payments infrastructure will provide a stimulus to corporates to rationalise their EU banking relationships, indicating that customer-retention could become a key battleground in the post-PSD environment.