vrijdag 1 februari 2013

SEPA: time is running out

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Most companies will require between six and 12 months to prepare themselves for the SEPA switch. So why with only a year now to go, have some corporates not yet decided on a budget for the project?

The Single Euro Payments Area (SEPA) vision is getting ever closer to becoming a reality.  But even with the 1 February 2014 deadline fast approaching, some companies are still dragging their feet, indicates a webinar poll of corporates conducted by J.P. Morgan.

The poll, which was conducted during a webinar on Wednesday 23rd January, found that a significant number of participating companies have yet to decide upon a budget.  It is data which will add further weight to the recent survey conducted by EuroFinance, which found that 52% of corporates have not yet started their SEPA project.

“The risk of non-compliance could be high for any organisation,” says Susan Dean,  Head of Transaction Services EMEA, J.P. Morgan Treasury Services.  “Apart from disrupting the supply chain and cash flow, it could also have an adverse reputational impact from delayed salary payments, outstanding debts to authorities and strategic alliance disruption.”

“Missing the deadline,” she adds, “is simply not an option.”  But are corporates sufficiently informed about what needs to change in order to meet SEPA compliance?

In a separate interview with Treasury Today, Ruth Wandhöfer, Global Head of Regulatory and Market Strategy at Citi Transaction Services, said that meeting SEPA’s new data and formats requirements might present more difficulty for organisations than they may initially expected. 

“My key advice to corporate customers would be to have their IBANs and BICs ready,” she says. Many organisations may not be aware that they are using local account numbers, where those are sometimes incorrect. “Then when you make a payment the bank helps you to enrich the data if they can, so that the payment goes to the right person even if the number you have is not technically valid.

“So the validation of existing account counterparty details as well as moving that database to IBAN and BICs respectively, is absolutely crucial. If you don’t have that core data in place you won’t be able to even make a payment, let alone a direct debit,” she adds.

For a large multinational with numerous counterparties across the different EU member states this could potentially be a very time consuming process.  How much time should corporations put aside to make the SEPA switch?  The answer, as J.P. Morgan pointed out at the webinar, largely depends on the organisation, the complexity of their business model and operations, and whether they are seeking merely a basic level of compliance or something more.

Nevertheless, the bank said that its clients are typically requiring between six and 12 months to prepare themselves for the switch.  So, for corporates who have yet to set migration objectives or to decide on their SEPA budget, the message is clear: time is running out and you need to act now.

Bron: Treasurytoday

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