Following the implementation of the legally-binding implementation deadline for the single euro payments area (SEPA) as 1 February 2014, software and IT services group SunGard and SEPA specialist Sentenial report that they have identified 10 IT trends that can help corporate treasurers understand the impact of SEPA and act to reduce banking fees, lower processing costs, and increase automation.
“We expect to see rapid adoption of SEPA among large, pan-European corporations. Adopting consolidated credit transfers and direct debit schemes across the eurozone can help pan-European corporations realise cost savings. With the legally-binding implementation deadline set, large corporations need to get budgets in place and start projects now in order to have sufficient time to address any unforeseen issues,” said Andrew Owens, senior vice president (SVP) of enterprise payments at SunGard AvantGard.
The companies identify the main IT trends created by the SEPA deadline as follows:
1. The deadline is forcing corporations with eurozone operations to act now, as they realise that an inability to collect monies from customers across the region may threaten future revenue and negatively impact customer relationships.
2. Few corporations currently have mandate management systems that can verify whether a valid debit agreement is in place between the customer and corporation, a key SEPA requirement.
3. The adoption of SEPA schemes for direct debits could be an unexpectedly large project for many corporations due to the many variables involved with implementing and integrating a SEPA solution with a variety of back-office accounting and customer relationship management (CRM) systems.
4. Some corporations have not adequately budgeted for SEPA projects due to a lack of understanding about the complexity of implementing a solution; consequently they may be challenged to complete their projects by the deadline.
5. Migrating existing customer records to the International Bank Account Number (IBAN) standard and maintaining consistency in CRM systems for both back office and customer-facing activities will be challenging due to the sheer number of records and the need to keep systems integrated.
6. With their massive CRM and enterprise resource planning (ERP) databases, large creditors could be particularly challenged to migrate and maintain SEPA-compliant mandate information.
7. Treasurers want solutions that manage all aspects of SEPA mandates; both to check, update and delete mandates and also to supply mandate management data each time they want to collect.
8. Corporations are starting to realise that SEPA can make it easier to do business across the eurozone by simplifying and consolidating collections and payments processes.
9. Relative to current processes spread across multiple countries, a single direct debits scheme can help decrease IT costs by requiring only one solution instance, one infrastructure, and fewer support resources.
10. Processing euro transactions through a small number of cash management banks can help provide better cash management, while the use of standard ISO 20022 messages can simplify automated reconciliation.
Despite being behind the likes of Europe and China, the US payments industry is now rapidly advancing, said Anish Kapoor, CEO of AccessPay told GTNews in an exclusive interview.
Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.
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