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From Regulation to Catalyst for Change To what extent are companies able to leverage SEPA, and which major areas require attention for a successful SEPA project? The Editor speaks to several experts and corporates in search of an answer.

From Regulation to Catalyst for Change

Findings of the SEPA Workshop

by Helen Sanders, Editor

One of the best attended workshops during the Cash Management University organised by BNP Paribas was on the topic of SEPA migration, moderated by Richard Delvaux, Director, PricewaterhouseCoopers. The workshop focused on the migration experiences of two major BNP Paribas customers, GDF Suez and AkzoNobel, with commentary from Luca Poletto, Head of SEPA at BNP Paribas Cash Management, and Andreas Knopf, Managing Director of BPI Business Process Integration GmbH. The workshop had two key objectives: firstly, to what extent companies are able to leverage SEPA as an opportunity as opposed to simply a compliance project; secondly, the major areas that require attention for a successful SEPA project.

Importance of the SEPA end date

Luca Poletto, BNP Paribas Cash Management, emphasised that the SEPA migration end date of 1 February 2014 in the SEPA countries is a binding commitment, at which point existing domestic credit transfer and direct debit schemes will cease. To achieve this, every entity operating in a Eurozone country needs to be ready to migrate its entire volume of transactions to the new schemes. This is a particular challenge bearing in mind that migration rates to date remain very low: according to the most recent figures (November 2012) 30.6% of credit transfers were under the SCT scheme 2.1% of direct debits were under the SDD scheme (source: ECB).

The scale of the migration challenge should not, therefore, be underestimated, particularly as projects typically take 6-12 months, particularly for larger remitters; therefore, all companies should be starting immediately to achieve the end date. While it is easy to ‘wait and see’ in case the end date could be delayed, there has been no indication to this effect, and there is strong motivation across the banking, regulatory and political community to migrate promptly.

Luca went on to discuss that the most likely way in which many corporates will migrate in time is by leveraging additional banking and vendor services. Furthermore, there will be a transition period from now until 2016 when companies may need to support both SEPA formats, based on XML, and legacy formats in countries such as Spain and Italy where the requirement to migrate from local formats has been extended until 2016. He emphasised, however, that it will be essential to select the right SEPA partners to support the new harmonised European landscape.

From challenge to opportunity

Based on PwC’s experience of supporting a variety of different organisations through their migration process, Richard Delvaux suggested that while SEPA migration posed challenges, it also offered opportunity to improve the efficiency and control of payment, collection and cash management processes. If a SEPA project is treated solely as a compliance issue, and the focus is on fulfilling the minimum requirements for migration, there is likely to be little benefit. However, by recognising that SEPA can be a catalyst for process transformation, the project can deliver a positive return on investment. Some of the benefits that SEPA can deliver are illustrated in figure 1, including:

  • Reduction in bank fees
  • The ability to review bank account structures and number of accounts
  • Centralise and optimise payments, with greater standardisation and streamlined formats

He continued however by noting that bearing in mind the limited time that companies have to migrate to SEPA, the top priority must be on compliance; however, by preparing the ground now, treasurers and finance managers will be in a position leverage the benefits as soon as possible once compliance has been achieved.

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