According to a new survey published by i-flex solutions, 79 percent of European banks admit think that the Single Euro Payments Area (SEPA) is a positive exercise.
Three quarters of respondents think SEPA will create new business opportunities, from the expansion of business to new geographies to the provision of new SEPA products and services.
Despite these opportunities, banks are still in the early stages of SEPA planning. With the first deadline only two years away, most banks should be well into the design and specification phase. However, the survey found banks are still at the discussion stage and barely nominating payment tsars.
“There’s no doubt about the price tag attached to SEPA compliance,” says V Senthil Kumar, the CEO of i-flex solutions. “But banks are only just waking up to the opportunities it presents. If they are flexible and agile they can reap huge rewards that’ll more than cover initial investments.”
Payments already represent a third of banks’ total operational costs, but contribute to only 10 percent of overall profitability construct and SEPA aims to drive down revenues further. 71 percent of banks highlighted the need for greater STP (Straight Through Processing) and cost efficiencies.
More than 60 percent of banks are hoping to generate cost savings predominantly through higher STP rates rather than by reducing the cost of maintenance of existing systems. However, more than 20 percent of respondents foresee no cost savings, which could make the mandatory SEPA spend unsustainable.
SEPA aims to harmonise the payment products and services offered by the banks in the European Union, in terms of format, fee structures and IT platforms for processing transactions. SEPA introduces uniform schemes for all countries in the Eurozone requiring all retail cross-border payments up to USD 50,000 to be treated as national payments.