Banks See Corporate Customers as Key to SEPA Success, According to End Date Survey

Clear2Pay, an international technology provider of next generation payment solutions for financial institutions, has announced the results of the Single Euro Payments Area (SEPA) Migration End Date Survey, executed in co-operation with Finextra. Survey respondents indicate that they believe that the competitive space for SEPA will be with their corporate customers – and that they (89%) need to offer those customers better solutions and services. Eight-seven percent of respondents also call for an increased and better representation of corporates in SEPA governance.

Other key findings include:

  • Although banks concede corporate client payment services are key to the success of SEPA, 26% of banks are not yet ready to respond to incoming request for proposals (RFPs) from corporate clients, whereas 75% of bankers concede that SEPA will negatively impact the number of banking relationships their customers hold and 74% fear competition from corporates connecting directly to clearing systems and thus reducing payment volumes with their banks.
  • It is not at all clear what the SEPA cost and revenue streams in a post-deadline market will be (77%).
  • For 52% of the respondent banks it is not clear how they will replace the revenues traditionally generated by multilateral interchange fees (MIFs).
  • The existing infrastructure of many banks is not currently fit-for-purpose in a post-deadline market and SEPA is seen as a driver for centralisation of payment operations by 91% of the banks.
  • Many resources are needed between now and the migration deadline and in particular the knowledge of testing SEPA instruments is not widespread, 97% of respondents expect increased testing efforts, with a lower percentage being confident they can handle this with their own internal teams.

Ainsley Ward, head of management consulting at Clear2Pay, said: “This survey has confirmed a number of anecdotes, but has also thrown up a few interesting new ideas. It is clear that the focus in SEPA migration has, under the much desired pressure of the end date, moved from infrastructure readiness to a more customer-centric viewpoint. Banks are looking for ways to protect their volumes from risks that might arise by direct-connecting corporates or competitive banks that view SEPA as a relationship tool with their corporate clients and who actively pursue a growth strategy. Once the migration shake-down is behind us, those less adventurous banks will likely reconsider their future in the payments market.”


Related reading

New consumer banking head for Citi Asia Pacific