José Carlos Cuevas de Miguel, Regional Treasury Europe at Alstom, in his presentation in the 'Fast track to SEPA readiness' session at the recent EBAday in Berlin, listed what he considered is needed to be SEPA compliant:

1. Adequate content of the ERPs & Payroll databases
   • Make sure that BIC & IBAN data exist for all customers, suppliers and employees as well as the information required for SEPA DD
2. Use the right layout to manage payments & collections: XML for SEPA CT & SEPA DD
   • The format needs to be acceptably fixed and tested with most of the banks and piloted via e-banking project for certain group ERPs.

3. Implement the right workflows to manage collections: SEPA DD & mandates

• "formal"mandate
• Differenttimeframe
• UnderstandingthatDebtorbankwon'tplayaroleonmandatecustody
• Files sent to banks will be treated with a longer delay

(No wonder it takes many months preparation to be SEPA compliant.)

José then listed the main risks for corporates' SEPA projects:

1. Banks' availability regarding tests as all their Corporate customers will be asking for the same at the same time
2. SEPA compliance for multinationals strongly depends on implementing some key ERPs in some countries. A delay in these projects will strongly impact SEPA project
3. Some domestic tools might not have BIC and IBAN fields in their databases
4. Some domestic tools might not be able to manage the layout (XML ISO20022 pain 3)
5. Some existing banks in some countries are not in the target pool of banks but we will need to ask them for support to be SEPA compliant on time
6. New domestic Central Bank reports to be implemented before SEPA end date for cross border transactions (Portugal, Germany, Spain)
7. Some BICs and IBANs could change during the project because of banks' merging projects (new check just before go live)
8. Missing mandates for most of the European countries
9. Shaping a clear procedure to manage SEPA DD and mainly solving mandates issue
10. Approved budget to afford the whole project; who pays for what ...

Risk 1 - banks availability for testing each corporate's SEPA set up - is particularly worrying, but so are they all. The audience at the 'Fast track to SEPA readiness' was asked what they thought would happen in SEPA migration. Not one person thought that everything would go perfectly, a few thought there will be a disaster, while the majority thought it would be somewhere in-between. Given José's 10 risks above, I worry the majority might be too optimistic.