The Federation of Finnish Financial Services (FFI) has launched a request for information (RFI) to update its payments system. The Finnish banking community invites interested parties to submit a written response to the RFI, in English, by 12 September.
The move is likely to lead to Finland becoming the latest country to adopt real time payment (RTP) systems for handling everyday transactions. They have already been launched in South Africa and Mexico in 2006, the UK in 2008, Poland in 2012, Sweden in 2013 and Singapore last month.
The UK banking initiative, the Faster Payments Service launched in May 2008, now processes more than one billion transactions per year and accounts for almost twice the number of cheques written. A survey presented in April this year at the National Automated Clearing House Association (NACHA) payments annual conference showed than 90% of professionals believe an RTP system will be rolled out in the US over the next five years.
In Finland, urgent payments are currently transferred between banks using the Finnish online urgent payment system (POPS) that handles payments twice a day on banking days only. POPS, launched in Finland in the early 1990s, is steadily becoming obsolete – a process hastened by the approaching single euro payments (SEPA) deadline of 1 August 2014.
Finnish banks found that the existing POPS system is not compliant with SEPA standards, which requires a change as the FFI must find a real-time system that will replace POPS and meet SEPA. The RFI details how the new payments system should handle real-time 24/7 transfers and also how it will provide solutions for complying with SEPA.
The FFI stated: “Customer demands have changed and will keep on changing, and it is important for banks to have a payment system that makes it possible to develop real-time payment service products for both consumers and corporate customers.”
There were 343,000 urgent transfers in Finland in 2012, representing just 0.16% of payment transactions, with a compound annual growth rate (CAGR) at 6.5% between 2002 and 2012. Despite the small percentage of transfers completed, the method helps firms to access a special service that permits transactions to be carried faster than regular payments. The average size of each transaction was €959 (US$1,303). Furthermore, the immediate payment system could be used for small value transactions.
SEPA credit transfers (SCTs) were launched in Finland in 2010 and by 2012 had completely replaced non-SEPA credit transfers that included national banking identification format instead of European international bank account numbers (IBANs). This instrument was used in 42% of transactions in 2012.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Tim de Knegt, strategic finance and treasury manager for the Port of Rotterdam, discusses how he is using blockchain, the challenges he will face in his role of treasury over the next 12 months and the advice he would give to someone starting out their career in treasury.
Due to the low interest rate environment and Basel III regulation many corporate treasurers, who may have in the past been very reliant on the banking sector to provide them with cash management solutions, have been forced to explore alternative options as banks have been refusing short dated cash deposits.