Finextra, The Sepa Consultancy, and SAP, conducted August 2007 a reader quiz to achieve some indications about to be expected changes in payments processing. The results were published at Sibos 2007 and available here.
Due to internalization and globalization it’s more than evident that also international payment processing is affected. But the major drivers for change didn’t come from the industry; they were initiated by its environment. The introduction of SEPA and EU regulations (PSD) forced financial institutions to reconsider their payments processing.
Due to these constraints most quiz participants expect that their payments business may look very different by 2010. They already committed resources to evaluate in/co/outsourcing options to benefit from collaboration scenarios among different market participants.
Almost 40% of the banks are already on change as they implemented standardized interfaces to support information exchanges from payment hubs to clearing and settlement processing.
Not only payment processing is affected, but also credit transfer schemes will be substituted by Sepa Credit Transfer schemes. Although this is to expected for “after 2009”, it clearly illustrates the perception of 60% of the banks that PSD will drive standardization as a catalyst. Direct Debits will also be affected, but it seems that additional clarification is needed here and will probably follow credits instead of simultaneously migrated.
The corporate engagement of banks has a strong focus on the financial supply chain benefits of Sepa. Other areas of corporate engagements need clarification on the implications.
Overall these demands to change payments processing will affect the siloed nature of today’s processing systems as well. Most respondents expect additional and new business opportunities, so the cost for change is considered as investment.
Details in attached report.
Kind regards Paul