The recent Eurofinance conference in Barcelona revealed all the pressures and problems that banks and their corporate clients have as they struggle to be ready for 1st February 2014. 

It is at present less than 16 weeks to Saturday 1st February 2014. Most companies and banks have now abandoned their attempts to exploit the strategic efficiency and structural opportunities that SEPA represents. All resources are being focused on the race to be compliant. The latest EBA figures showed that only 7.8% of direct debits were SEPA compliant and just over 50% of credit transfers were SEPA compliant. This is a crisis or maybe not, we’ll see. 

Fudges galore
Fudges, to make it easier, to comply with SEPA are starting to appear:

• waving requirement to submit XML 20022 files (Spain, Greece and Italy)
• some countries are talking about not switching off the legacy DD systems
• banks are saying privately (some in public) that they will continue to run their legacy systems for ‘some time’.

In contrast, some countries are insisting that SEPA is complied with, e.g. in Finland it will be a criminal offence not to comply, in Cyprus there will be fines for finance directors of €20k. 

The one consistent feature is that each SEPA country is taking a slightly different approach. 

Conversion services
The conversion companies are having a ball as their approach is now the only viable route to be ready in time, as it is not possible to cut out, all the changes required (de-scoping). Indeed work to be ready for SEPA is work involved is still significant.

Also some banks are finding that the costs of conversion have now quadrupled from 12 months ago as resources become increasingly scarce.

Other corporates are adopting permanent conversion services from Tieto, B2, etc. as they strive to bank and payment systems independent.

Corporate strategies for SEPA 

All companies have slightly different strategies for SEPA, and most realise that they must make sure that the key payments and collections are made after 1st February 2014. One corporate treasurer at the SEPA session, in a quiet aside to me, said, “We’ve done all we can system wise. AND I have banned all leave in our department in the last week in January and the first week in February.” 

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Clearly each country’s strategy for implementing SEPA is different. Companies in their SEPA Plan B to ensure readiness and compliance need a per country strategy to cope with the differences.

SEPA Plan C, the strategy to exploit the strategic opportunities in SEPA, begins after 1st February.