SIA-SSB, Capgemini and CeTIF launch research observatory on Sepa and PSD

Source: SIA-SSB

SIA-SSB, in collaboration with Capgemini and CeTIF - Università Cattolica, today presented and inaugurated a three-year program of appointments and events, "The Roadmap for the new Europe", which will be managed in partnership between the three companies with the aim of providing well-organized, complete support to Italian banks and the new financial players ("Payment Institutions") in the journey towards compliance and innovation required by the Payment Services Directive (PSD) and the Single Euro Payments Area (Sepa).

For 2009 the "Roadmap" provides occasions for sharing and comparing experiences, such as the traditional "Do you Sepa?" meeting, promoted by SIA-SSB and now in its 4th year, to be held in October, alongside other more directly work-related initiatives. This latter category includes today's announcement of the start-up of the Research Observatory 2009-2012, an initiative sought by the three partners and created to support Italian Banks in the transformation process of the payments industry brought about at European level following the introduction of SEPA and the imminent acknowledgement of the PSD.

Conceived for and dedicated to banks and financial institutions, the Research Observatory has the aim of identifying the determining factors of the economic value of the payments business in Italy and Europe, also taking into account the evolution of the service model brought about by SEPA and PSD, and of becoming a competence center, capable of ensuring constant, long-term analysis. On one hand, the initiative will foster the development of awareness and education concerning the principal transformations in the payments industry; and on the other, the development of a network of national and international professionals who can exchange ideas and experiences regarding operating criticalities, actions and priorities to be implemented in the three-year period.

The scenario

The joint SIA-SSB - Capgemini - CeTIF project is part of a context of significant evolution in the European payments system, begun with the creation of SEPA and reaching a new turning point with the imminent coming into force of PSD on 1st November this year. More specifically, PSD will require banks to comply with a new regulatory framework, which will harmonize the behavior, the obligations and the responsibilities of Payment Services Providers (PSP), removing the barriers to entry of new payment services operators - also non-bank - and give rise to possible repercussions in terms of lower revenues compared to the current service model.

According to estimates published in the World Payments Report 2008 by Capgemini, Europe has seen significant growth (over 10% annually) in the payments sector, mainly due to the increase in card transactions and collection instruments. In this scenario, non-cash payments are growing in all geographic areas, creating a considerable market with more than 50 billion operations representing a value of over 60,000 billion Euros, 7.9% of which comes from Italy.

In this context, the combined effect of self-regulation and compliance will have significant impacts on revenues. On one hand, the competitive effect of SEPA will lead to a possible reduction in direct revenues from payments in Italy of between €1.5 billion (-29%) and €3 billion (-58%), in Europe between €18 (-38%) and €29 billion (-62%). On the other hand, the new rules introduced by PSD, while not directly effecting pricing levels, will have an impact - even if differently between Corporate and Retail - amounting to a total of €1.2 billion on Italy alone. The joint effect of PSD and SEPA in terms of a possible reduction in revenues connected to payments is estimated at between 2.7 and 4.2 billion Euros just for the Italian banks.

In a scenario like this, it is essential to offer a proposition which is efficient and innovative in its architectural and technological aspects, in order to provide banks with solutions aimed at optimizing the investments they will need to make to transform their business.

The role of the Research Observatory

The new European payments scenario highlights the need for banks to rethink their entire revenue model and, subsequently, to adopt operative models and technological architectures that enable improvements in the efficiency and effectiveness of their production and supply systems.

The Research Observatory consists of four main phases, spread over a period of three years and united by constant monitoring of progress in the implementation of the regulations:

  • Evaluation guidelines and methodologies, to define the strategic positioning model and the economic positioning model;
  • Best practices and KPIs, to examine the best experiences and identify a suitable model of indicators;
  • Benchmarking, during the course of which banks can study the market according to the strategy adopted;
  • Continuous Improvement, with which to offer banks the support necessary to evaluate the alignment of the strategy with the rules of international best practices and offer tools for the continuous improvement of the payments system, in a framework not only of cost reduction, but also of business effectiveness and market proposition.

"The Research Observatory is the first initiative of its kind in Europe which will allow banks to compare their positioning and analyze the economic scale of the services provided, in the light of the creation of SEPA and the coming into force of PSD ", comments Renzo Vanetti, CEO of SIA-SSB. "We have the know-how, the solutions, the experience and the innovative vision to support the banks in this period of transformation, which we would like them to see in terms of the market and not merely of the regulations".

"The transformation of the payments industry in Europe is the most significant that the banking system has ever undergone and it cannot be tackled without a strategy which takes into account the economic value of the payments business", states Sergio Magnante, Vice President - Financial Services Leader at Capgemini Italia. "The duration of the Observatory guarantees the monitoring over time of the variables of change, and this permits the creation and implementation of indicators and methods that the banks can share in order to make comparisons, exchange knowledge and improve constantly".

"The Research Observatory takes up a dual challenge", comments Federico Rajola, Scientific Director of CeTIF. On one hand, it sets the objective of representing a comparison tool on strategic, long-term issues that accompany banks not only on their journey towards adoption of the regulations, but above all in the observation of phenomena subsequent to their acknowledgement. On the other hand its distinguishing feature is the involvement of institutions and research centers of an international nature. We therefore believe it could represent the first Payment System Research Program, an initiative we sincerely hope will extend beyond the three-year period set out".

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