By Julian Goldsmith, 1 October 2007 15:47
NEWS
Over half of European and global banks think meeting the January 2008 deadline for the Single Euro Payment Area (SEPA) is unachievable.
According to a report from electronic payments organisation VocaLink and Finextra Research, 81 per cent of banks believe their customers could not migrate to SEPA schemes before 2010.
SEPA aims to make it easier and cheaper to move money around the EU - but means big investments by banks that need to replace manual processes with automatic ones in order to bring down costs.
Chief among bankers' concerns was the implementation of SEPA direct debit mandates, with over one-third rating it as top priority and 44 per cent citing it as something that will prove difficult to manage.
The report found that although banks are unlikely to meet the 2008 deadline, there was a high level of awareness of migration to SEPA, and 54 per cent of respondents said convincing their customers of the importance of moving to the scheme was the most significant issue facing their business.
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Many banks will be offering value-added services as an incentive to customers - and as a way of gaining competitive advantage over rivals that go for compliance only. The incentives most highly rated in the report were offering customers the ability to send all payments through a single channel and message reformatting, cited by 32 per cent and 24 per cent of respondents respectively.
The report said: "SEPA is considered by many in the industry to be the single-largest project in Europe since Y2K. Banks and businesses alike must undertake the migration to SEPA accounting systems to support this change and yet there is little incentive for most bank customers to embrace the change.
"Our survey highlights that only 17 per cent of banks are using this as an opportunity to pursue an aggressive customer migration strategy by providing services that minimise the impact to business users. As a result, those banks expecting business customers to make the required changes to adopt SEPA message formats may lose out."
VocaLink said 113 senior banking executives across the world participated in the survey.
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