26 October 2012
Report reveals: ‘Crisis could alter pace of SEPA migration’
As the February 2014 deadline approaches, banks and corporates are increasingly eager and willing to adapt their systems and processes to SEPA. The rapidly changing and volatile macroeconomic environment, however, could still alter the path and pace of SEPA progress in the run-up to the deadline. This is one of the findings of the latest edition of the World Payments Report, by Capgemini, RBS and the European Financial Management Association.
The report describes the extent to which banks and corporates are ready for SEPA. There are several reasons why adoption has been quite slow to date; including the lack of a deadline for implementing SEPA for several years, confusion in interpreting of some of the regulations and a general slowness to adapt bank systems in the absence of customer interest in SEPA.
Although the migration deadline provides banks and corporates with an incentive to address the issues of SEPA compliance, the current economic situation might divert attention and resources away from the harmonization process. The report acknowledges that SEPA is a ‘major undertaking for corporates, requiring dedicated planning and the active engagement of stakeholders, especially because the short-term benefits may seem neither clear nor assured at first.’
For SEPA migration to succeed, companies should create a comprehensive IT assessment and road map, analyze the scale and scope of the SEPA migration project and update payment databases to ensure payments will be processed reliably and accurately.
The authors of the report acknowledge that there are several advantages to SEPA:
‘Larger companies will be able to take fuller advantage of major process changes, such as the implementation of payment factories (shared service centers focused on the accounts-payable function). And smaller companies will find it easier to compete across borders by being able to offer their customers easy payment facilities such as SEPA Direct Debits.’
The World Payments Report was recently covered by CFO.com, which highlights the apparent lack of enthusiasm among banks and corporates to adopt SEPA: ‘ The report says that 4,559 banks, responsible collectively for some 95% of the volume of payments in Europe, can now be reached using SEPA Credit Transfers, and yet only 27.2% of payments were taking advantage of this functionality as of March 2012.’