This time last year adoption rates for SEPA, particularly for direct debits were still woefully low and an extension to the end dates was about to be announced. A year on and the end dates are firmly behind us and despite the late scramble, adoption seems to have been largely achieved. For corporates, many who had to comply in a hurry and without capitalising on potential benefits, what does the new-year hold from a SEPA perspective?
1. End-to-End Straight-Through-Processing can be improved
With more time to reflect and a new financial year on the horizon, the finance and treasury functions can now look to build on the investment in SEPA. Changes can be made to ERP and other software to provide better integration with the electronic banking systems; this will improve the submissions process and deliver real end-to-end straight-through-processing.
2. SEPA will enable efficiencies and cost-savings
With SEPA offering a level playing field in the Eurozone for both domestic and cross-border payments, corporates can look to streamline and rationalise their banking processes and relationships. It may no longer be necessary to hold accounts in all the Eurozone countries in which they operate. For some the simplifying of account structures which SEPA enables may help them to move to a shared service centre model for their finance function and benefit from the attendant efficiencies and cost savings that allows.
3. Data quality will start to have a negative impact
Many organisations took the wise step to validate the bank account data they held before converting it to SEPA ready IBAN (International Bank Account Number) and to date they should have seen a very low error rate. Bank account data however ages and incorrect bank account data leads to payment failure. Errors occur either when new data is added that is not validated, or when existing data becomes invalid due to factors such as bank mergers or branch closures. As this process happens slowly over time it will only be during 2015 that the effects of invalid bank account data will become apparent.
The benefits of SEPA will not be realised and the risks avoided without action being taken: during 2015 savvy organisations will be making the right moves to take them beyond mere compliance.
To understand more about the impact of SEPA click here to download our international payments whitepaper.
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