EuroFinance kindly asked be to moderate a conference session in Budapest entitled “Beyond SEPA”.
In harmony with the main conference themes of disruption and innovation the organisers had decided to run it a little differently and they asked me to run the first session in the new format in the main hall.
I had treasury professionals from six European businesses: Oriflame, TomTom, Novartis, Telefónica, Telecom Italia and SABIC to assist me in my quest to uncover the benefits of the Single Euro Payments Area and the issues which still need to be overcome. During a lively debate with the audience we found that there are many opportunities that SEPA can offer to business, some of which had already been achieved:
1. Rationalisation of bank accounts and banking structures
At least three of the treasurers thought that they would be able to reduce the number of accounts and complexity of account holding as part of SEPA
2. Move to SEPA Direct Debit
In addition to one business which had moved away from direct debit in some countries, some of the treasurers thought that a simplified collection using the new SEPA scheme was likely to prove profitable
3. Standardisation on the ISO20022 XML payment file format
At least two of the six had used the international ISO20022 format to simplify communications with their bank
4. Harmonisation of processes
Most of the treasurers could see that using standard legal terms and standard data formats could also help them streamline the processes currently in place including financial, support and client acquisition
5. Better working capital forecasting
By building on the payments information standardised, some of the businesses had already benefitted from a better cash position, reporting and exception handling
However all six were keen to stress that the potential benefits could only be achieved robustly by overcoming the one umbrella issue: differences and exceptions. Until we reach 2016 and the niche payment products, country-specific exceptions and deviations from the ISO20022 XML standard are overcome, attaining some of these is difficult.
For me this echoes a quote from science fiction author William Gibson:
The future is already here, it’s just not evenly distributed
For euro payments:
SEPA is already here, it’s just not evenly distributed … yet