CGI Group and Experian have teamed up to help corporates with the challenge of migrating direct debits to meet the requirements of the single euro payments area (SEPA).
CGI, which provides IT and business process services and recently took over Logica, will offer information services company Experian’s pan-European bank account data validation services to maximise straight-through-processing (STP) rates for corporates migrating to SEPA direct debit (SDD) using CGI’s portfolio of SEPA solutions.
In Europe more than 4bn direct debit mandates will need to be migrated to SEPA standards. Businesses using domestic systems and account numbers must convert to the international standards of international bank account number (IBAN) and bank identifier code (BIC) by 1 February 2014 for all transactions in the eurozone.
Inaccurate, out-of-date account information will be a major issue for corporates migrating to SEPA standards. Poor quality data risks imposing additional costs on businesses and for many could result in collection failures and penalties.
Although today many banks provide exception handling free of charge, with SEPA the expectation is that they will not be able to do this in future and corporates will risk payment failure and the associated costs. According to
recent research from Experian
, this could be up to 12% of all transactions. With an estimated cost of payment failure at €50 per transaction, a corporate with 100,000 records could expect to see a cost of failure of €600,000 per monthly transaction cycle.
“We believe that the move to SEPA represents a huge opportunity and challenge for corporates. Good data hygiene is critical to migration and our approach is to validate not only up-front but also to ensure mandates remain correct throughout their lifetime,” said
, IP solutions director at CGI.
“Experian’s BIC and IBAN validation service complements our solution by providing customers with the option for confirmation and validation of accounts to minimise the risk of payment failure, enabling corporates to reap the benefits of SEPA. Corporates can connect to our comprehensive SEPA platform quickly, thereby de-risking their SEPA programme and enabling easy and cost effective migration.”
Jonathan Williams, director of payments strategy at Experian and leader of the SEPA programme, added: “Effective direct debit management services are vital in helping customers ensure that their SEPA payments go straight through, first time.
“Offering CGI’s customers the ability to validate bank account data, helps them avoid the issues associated with poor quality data which has the potential to derail the SEPA programme by undermining consumer confidence and imposing additional costs on businesses. Time is running out and we therefore urge businesses to choose SDD mandate management services soon while there is still resource and time available to migrate.”
Financial inclusion, digital banking, omnichannel payments and even lightsabers were discussed on the second day of Money 20/20 in Las Vegas this year.
Sibos 2017 Day Two highlights: Brexit and banking, and why ‘data is the new oil’ in financial services
How nation first politics can impact global financial organisations It’s clear that data and regulation are the two key topics that are ... read more
Day one of the global Money 20/20 conference focused on AI and machine learning, investor and fintech partnerships and the future of robotics.
On day one of SIBOS, panellists unanimously agreed that doing nothing to modernise payments was no longer safe bet for transaction banking.