Survey Reveals Corporates View SEPA as an Opportunity but Further Clarity is Vital

The ‘Taking Stock of SEPA’ 2008 survey was answered by 182 corporates from the global readership of gtnews in September. All respondents had some form of European-based operation, such as the location of their central treasury (65%) or the location of a subsidiary or subsidiaries (in addition to the rest of the world). Ninety-two per cent of the corporate respondents indicated that they conducted business cross border.

The respondents varied in size and revenues – from small companies with revenues below US$10m to large multinationals with revenues over US$10bn. In terms of hierarchy, the respondents hold a variety positions – 32% were from senior management/executive director level (i.e. CFO, group treasurer, treasurer or directors of finance and planning), 38% were managers or team leaders and 30% identified themselves as treasury team members.

Progress on SEPA Projects

It is just over 10 months since the first SEPA instrument, the SEPA Credit Transfer (SCT), was launched. While there is consensus that the introduction of the SCT has not been a ‘big bang’ event, it was hailed as the first major milestone to be achieved and therefore a success story. What has proved more challenging is garnering corporate support for SEPA and raising awareness around the initiative in terms of the benefits and migration plans. The ‘Taking Stock of SEPA’ 2008 survey results provide a valuable insight into the current level of SEPA adoption among corporates and their progress on internal SEPA projects.

The majority of the respondents (61%) indicated that they have started to make plans for SEPA. Thirty-six per cent said they were at the ‘analysis phase’, 16% at an implementation’ stage and 9% affirmed they had already ‘established a project plan’. Thirty-five per cent of the survey respondents, however, said they have not yet started their migration plans for SEPA.

Figure 1: How far has your company progressed with its SEPA project?

Source: gtnews ‘Taking Stock of SEPA’ survey 2008

Where Did it Start?

When asked specifically about the SCT, 21% of respondents affirmed that they plan to migrate to using the SCT by the end of 2008, 24% by 2009 and 12% by 2010. Thirty-eight per cent of the respondents said that they have not yet specified a date by which to adopt the SCT.

Turning to the SEPA Direct Debit (SDD), which is due to be launched in November 2009, the survey results reveal that the majority of corporates have planned their adoption for after 2009. There are some early adopters, though – 5% of the respondents said that they want to adopt the SDD in 2008 and 20% intend to adopt by 2009. A large percentage of the respondents (47%) are not yet certain about their SDD plans and admit that they have no date yet specified for the adoption of the SDD.

This is understandable because – while the banks and European authorities have made a firm commitment to the launch of SDD in November 2009 – there are still issues that need to be resolved in order to create greater clarity for end-users and this will affect plans for adoption. “Concerning direct debits, corporates need a definitive scheme from the EPC [European Payments Council],” said one corporate respondent, an information manager from a European company. Another respondent, an e-banking service manager from a company based in the same region, agreed and said: “I need information and clarity on the direct debit mandates: will we be required to get new mandates for all existing customers?”

A number of respondents raised this issue and, at the beginning of next year, it is expected that outstanding issues around the SDD will be resolved enabling more corporates to start moving forward with their adoption plans.

While it is feasible that current uncertainty around the SDD should delay adoption, the fact that 38% of the respondents have not yet specified a date for adoption of the SCT is more worrying, as this is an instrument that is working and in use across the industry. This fact – coupled with the 35% of survey respondents who admitted they have not yet started their migration plans for SEPA overall – reflects the lack of momentum among corporates in terms of adoption. Over the next 12 months, getting corporates onboard will be the biggest challenge facing the industry and this will only happen once corporates are convinced about the benefits of migration.

What are the Stumbling Blocks to Migration?

Significantly, despite the disparity among respondents about their adoptions plans, an overwhelming majority of the respondents (80%) agree that SEPA is an opportunity to improve efficiencies within their business. When we take a closer look at those respondents that disagree with this statement, we can see that it is the nature of their business and operations that dictates their opinion rather than a negative perception of SEPA. For example, a quarter have revenues of less than US$10m, which indicates that they might have limited cross-border activity, while 24% have revenues over US$10bn – with such a high amount of capital in place, these companies might already have highly efficient cash management systems and procedures installed and therefore see limited room for improvement as a result of SEPA.

The survey highlights the fact that the majority of corporates understand the benefits of SEPA, so why aren’t more taking action with their adoption plans? According to the results, the main hurdle impeding corporate adoption is the ‘systems development requirement’; 45% of the respondents agreed on this point. Thirty per cent said it was the ‘lack of demand from counterparts/business partners/clients’, 29% said it was because SEPA adoption was not a ‘priority’ and 27% believe there is an ‘unclear business case’ to provide the impetus for migration.

Figure 2: In your view, what are the main challenges for your company in migrating to SEPA?

Source: gtnews ‘Taking Stock of SEPA’ survey 2008

The results reveal a variety of stumbling blocks and each corporate will have a different view on this depending on their own organisational structure, location and business operations. For example, one respondent, the head of trade services based in Asia, said: “We still have to evaluate if this [SEPA] will benefit us as an importer in terms of costs/charges. We are also looking at how we will best manage the accounts given the number of subsidiaries we have, not only locally but internationally.”

For one respondent, a controller from a European company, the SEPA processes and benefits are still unclear. “Until now, some corporates have taken a basic approach and simply considered what they needed to do in order to become SCT compliant within their operations. However, we also need to consider how to make our treasury operations more efficient as a result of SEPA while the introduction of the SCT requires more information and knowledge,” he said. “It is also important to consider the technology that is available, such as e-banking systems and portal solutions, which can help corporates achieve their desired treasury model.”

For another respondent, an accounts manager from western Europe, while the gains from SEPA are clear, what needs to be done in terms of implementation is currently dependent on who the company chooses as its payment services provider. “This is still to be decided and we are currently in a tender procedure,” he explained.

A further respondent, a treasury manager based in the same region, pointed to yet another hurdle. “We are clear about the benefits SEPA could provide, but it is pointless starting any project without knowing if and when central bank reporting (CBR) requirements will change,” he argued.

One respondent, a European corporate treasurer, highlighted an issue that was further investigated in the survey. “We need a roadmap on how we get from where we are now to harnessing the full benefits of SEPA. That is more about management action than anything else,” he said.

When asked who had responsibility for SEPA within their company, there was discrepancy about who should manage the SEPA project internally among the respondents. The majority (53%) said they believed responsibility for SEPA migration was a task for the treasury department, 14% pointed to the CFO, 11% think responsibility lies with the accounts payable or accounts receivable department while 6% selected ‘other’.

Figure 3: Who has the prime responsibility for developing SEPA solutions in your company?

Source: gtnews ‘Taking Stock of SEPA’ survey 2008

This is interesting because SEPA – despite the name – is not just about payments; the initiative impacts cash management practice overall and this is actually underlined by the fact that the corporate respondents have different views on where responsibility for their SEPA project should lie. Importantly, 82% of the respondents said they had already allocated responsibility for SEPA to someone within their organisation. While it is clear that corporates have numerous questions that still need to be answered, one factor they can control is their internal project. Strong leadership from within the company is vital for the success of any migration plans.

We know that corporates need to be further engaged in discussions about SEPA and that they have a lot of questions, but where do they seek information to improve their knowledge of SEPA? The survey results reveal that 67% of the respondents see banks as their main source of information on SEPA, and the three banks that scored points with the corporates in terms of the SEPA solutions they deliver are Deutsche Bank (14%), Citi (12%) and RBS/ABN AMRO (11%). Of course, these figures are dependent on each respondent’s bank relationship but it is an indication of who the front-runners are in terms of the ‘SEPA’ banks. When asked which of the global transaction banks they perceived to have the strongest SEPA solution, 49% of the respondents selected Deutsche Bank, 14% chose Citi and 11% picked RBS/ABN AMRO.

Figure 4: Which of the following global transaction banks do you perceive as having the strongest SEPA solutions?

Source: gtnews ‘Taking Stock of SEPA’ survey 2008

The survey shows that corporates also actively seek information on SEPA from online desk research (25%), general media (24%) and financial technology vendors (11%). gtnews, for instance, has a dedicated SEPA section:, which provides readers with up-to-date coverage on SEPA.


What is significant about this survey is that it gives a voice to the corporate community regarding SEPA. A voice that has been absent from discussions around development until now, and perhaps the reason behind the lack of perceived progress among corporates in their adoption plans. The survey results highlight two clear messages. First, there is consensus among corporates that SEPA does provide the opportunity to improve efficiencies in business operations. Second, a lot more information and advice is needed from both bank partners and the media about SEPA.

When asked what further information was required on SEPA, over 70 respondents gave their opinion and some of their comments have already been highlighted in this article. More clarity is needed about a number of issues and there were some common themes: the SDD, CBR requirements, the relationship between the Payment Services Directive (PSD) and SEPA, the product offerings from banks and technology vendors, compliance with BIC and IBAN requirements, as well as the impact on internal processes, procedures and systems.

This is a lengthy and challenging list of issues to address – and it is not exhaustive. What we must acknowledge is that SEPA itself is a lengthy and challenging task and an unprecedented industry initiative aimed at harmonising the European payments landscape. Corporates are voicing their opinion; it is up to the banks and all relevant stakeholders to listen and take action in the next 12 months in order to ensure SEPA’s adoption and long-term success.


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