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"SEPA is on track. We aren't saying that every payment in Europe will be on it by 2010, but we do believe a critical mass will have moved to it," says Charles Bryant, secretary general of the European Payments Council and moderator of the session on payment services evolution in Europe. Considering that a special interest session on SEPA's status will have already taken place on Tuesday at 14:00, he expects discussions during this one to focus more on the wider implications of SEPA.
"Getting different perspectives is going to be good and my hope is that there is a lot of talk about the opportunities it creates for both banks and corporates in Europe to build new and more efficient payment services. Some people might see SEPA more as a public utility, but I'm afraid this view could stifle innovation, competition and customer choice," he adds. (The special interest session is meant to update everyone on where SEPA is in terms of deliverables and timescales, so there is only going to be a brief introduction about specific SEPA plans on Wednesday.)
Commercial impact
Andrew England, global head of transaction banking and cash management at Deutsche Bank, says the panel ought to evaluate how banks are dealing with the commercial implications of SEPA and discuss whether they can manage these satisfactorily for themselves and their clients.
"Can European banks turn a quasi-regulated dynamic into an opportunity? This is the challenge they face," he explains. "European banks can look at a more standardised platform and hence more simplified client behaviour to re-engineer an important part of their banking infrastructure; supporting their commercial business, retail business or both. The sales pitch to corporates is a common format that allows them to interact with banks; thus, streamlining their bank interfaces and enabling them to switch providers as and when required," he adds.
However, implementation issues surrounding some SEPA instruments and infrastructure are bound to take centre-stage too. To start, the number of national direct debit schemes across Europe does not make life easy for banks or corporates. Indeed, the extinction of these national systems remains slow moving.
"A dedicated effort is being made to define message types for Europe. These message types will be the foundation for enabling clients to migrate to a new operating model, upheld by common instruments and simplified and more centralised clearing infrastructures," stresses England.
Panel members are also expected to talk about the implications of Credeuro, the SEPA standard for pan-European credit transfers, since it becomes compulsory for cross-border transactions in the Eurozone from the beginning of 2006. And while the Pan-European Direct Debit (PEDD) scheme should be ready by next year, sources say it is unlikely to be fully operational until 2008.
Migrating to SEPA standards
Panel members, including Steven Groppi, senior vice president and regional executive for treasury services in EMEA and Asia Pacific at JPMorgan Chase, say there ought to be some discussion about how national banking associations plan to facilitate the migration to SEPA standards. Corporate clients have been invited to participate in the panel discussion so they can openly explain what they need and want.
"A collaborative effort is being made to ensure that the recommendations can be executed and that they are viable when looked at from a domestic market perspective. We already know from previous [failed] initiatives that the requirements need to be well understood and that they need to involve many participants from the varied payment landscape in Europe. This makes the project complex and challenging, but there can be no short cuts when it comes to making sure it is representative of all market participants," remarks England.
Groppi adds: "If we don't do this, then some third-parties will try to do it independently and we've already learned that these individual initiatives don't make things efficient. This isn't about a region. The euro should be a world currency and we need a world-class payments infrastructure to achieve that."
One thing clear from the panel is that SEPA is an evolution, not a revolution. Despite all of SEPA's successes, the future still seems imperfect. "We need to see the payments function as a scale business where the strong players that are emerging will capture volume and re-engineer their businesses to provide quality services at a very aggressive and efficient cost. As with most scale businesses, and indeed similar to what we have seen in the US, the top four to five major players will obtain an increasing share of the market as a result of bank consolidation," he says.
Corporate perspective
Amidst discussion on the future shape of European payments, attention must be paid to the requirements of the end-user. Their interests are best served by building consensus among the various bodies that are directing developments, according to panellist Philippe Lambrecht, general manager of international cash management at KBC Bank. A pan-European payment system is both good and bad for corporates, he suggests. "Lack of consensus between all of the key players, e.g. the European Payments Council, national banks, the European Commission, etc, hampers progress and some political initiatives tend to produce progress that is not necessarily in the end-users' best interest," he explains.
Source :www.swift.com
"Getting different perspectives is going to be good and my hope is that there is a lot of talk about the opportunities it creates for both banks and corporates in Europe to build new and more efficient payment services. Some people might see SEPA more as a public utility, but I'm afraid this view could stifle innovation, competition and customer choice," he adds. (The special interest session is meant to update everyone on where SEPA is in terms of deliverables and timescales, so there is only going to be a brief introduction about specific SEPA plans on Wednesday.)
Commercial impact
Andrew England, global head of transaction banking and cash management at Deutsche Bank, says the panel ought to evaluate how banks are dealing with the commercial implications of SEPA and discuss whether they can manage these satisfactorily for themselves and their clients.
"Can European banks turn a quasi-regulated dynamic into an opportunity? This is the challenge they face," he explains. "European banks can look at a more standardised platform and hence more simplified client behaviour to re-engineer an important part of their banking infrastructure; supporting their commercial business, retail business or both. The sales pitch to corporates is a common format that allows them to interact with banks; thus, streamlining their bank interfaces and enabling them to switch providers as and when required," he adds.
However, implementation issues surrounding some SEPA instruments and infrastructure are bound to take centre-stage too. To start, the number of national direct debit schemes across Europe does not make life easy for banks or corporates. Indeed, the extinction of these national systems remains slow moving.
"A dedicated effort is being made to define message types for Europe. These message types will be the foundation for enabling clients to migrate to a new operating model, upheld by common instruments and simplified and more centralised clearing infrastructures," stresses England.
Panel members are also expected to talk about the implications of Credeuro, the SEPA standard for pan-European credit transfers, since it becomes compulsory for cross-border transactions in the Eurozone from the beginning of 2006. And while the Pan-European Direct Debit (PEDD) scheme should be ready by next year, sources say it is unlikely to be fully operational until 2008.
Migrating to SEPA standards
Panel members, including Steven Groppi, senior vice president and regional executive for treasury services in EMEA and Asia Pacific at JPMorgan Chase, say there ought to be some discussion about how national banking associations plan to facilitate the migration to SEPA standards. Corporate clients have been invited to participate in the panel discussion so they can openly explain what they need and want.
"A collaborative effort is being made to ensure that the recommendations can be executed and that they are viable when looked at from a domestic market perspective. We already know from previous [failed] initiatives that the requirements need to be well understood and that they need to involve many participants from the varied payment landscape in Europe. This makes the project complex and challenging, but there can be no short cuts when it comes to making sure it is representative of all market participants," remarks England.
Groppi adds: "If we don't do this, then some third-parties will try to do it independently and we've already learned that these individual initiatives don't make things efficient. This isn't about a region. The euro should be a world currency and we need a world-class payments infrastructure to achieve that."
One thing clear from the panel is that SEPA is an evolution, not a revolution. Despite all of SEPA's successes, the future still seems imperfect. "We need to see the payments function as a scale business where the strong players that are emerging will capture volume and re-engineer their businesses to provide quality services at a very aggressive and efficient cost. As with most scale businesses, and indeed similar to what we have seen in the US, the top four to five major players will obtain an increasing share of the market as a result of bank consolidation," he says.
Corporate perspective
Amidst discussion on the future shape of European payments, attention must be paid to the requirements of the end-user. Their interests are best served by building consensus among the various bodies that are directing developments, according to panellist Philippe Lambrecht, general manager of international cash management at KBC Bank. A pan-European payment system is both good and bad for corporates, he suggests. "Lack of consensus between all of the key players, e.g. the European Payments Council, national banks, the European Commission, etc, hampers progress and some political initiatives tend to produce progress that is not necessarily in the end-users' best interest," he explains.
Source :www.swift.com
