SEPA-Migration: Challenges for Banks and Customers

Transcription

1 Finanzgruppe Deutscher Sparkassen- und Giroverband SEPA-Migration: Challenges for Banks and Customers SPIN2012, Florence/ Italy, 22 June 2012 Roland Flommer, Senior Adviser European Payments Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 1 Roland Flommer 22 June 2012

2 Agenda 1. German Savings Banks are commited to the SEPA project 2. SEPA schemes delivered market-driven approach failed? 3. The impact of regulation on the migration 4. Need for an end-date regulation 5. Challenge 1: What is SEPA reachability ensured? 6. Challenge2: Themandatemigration 7. Challenge 3: BIC optional 8. Challenge 4: 17 months to the real end-date 9. Challenge 5: Is communication enough? Seite 2

3 German Savings Banks are comitted to the SEPA Project The German Savings Banks Group with more than 430 member banks has supported the development of the SEPA Payment Schemes since the beginning of the EPC activities DSGV (German Savings Banks Association) as member of the German Banking Industry Committee (GBIC) coordinates and represents the interests of the German banking community in the EPC SEPA Payment Schemes WG Full reachability of all member banks and customer accounts for SCT Scheme as of 28 February 2008 SDD Core Scheme as of 1 November 2010 SDD B2B Scheme as of 1 November 2010 Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 3 Roland Flommer 22 June 2012

4 Agenda 1. German Savings Banks are commited to the SEPA project 2. SEPA schemes delivered market-driven approach failed? 3. The impact of regulation on the migration 4. Need for an end-date regulation 5. Challenge 1: What is SEPA reachabilty ensured? 6. Challenge2: Themandatemigration 7. Challenge 3: BIC optional 8. Challenge 4: 17 months to the real end-date 9. Challenge 5: Is communication enough? Seite 4

5 SEPA schemes delivered market-driven approach failed? The original SEPA roadmap expected a critical mass of migration around but under certain conditions Taking over responsibilities by different actors and provision of necessary legal certainty by transposition of the PSD were delayed therefore The launch of the SDD Schemes had been postponed on 1 November 2009 Full migration was possible after 1 November 2009 The human factor: Most of German customers were fully satisfied with legacy schemes as domestic payments covering approx. 98 % of all cashless transactions The political factor: Only regulation could terminate legacy Euro schemes also to avoid anti-competetive behavior Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 5 Roland Flommer 22 June 2012

6 Agenda 1. German Savings Banks are commited to the SEPA project 2. SEPA schemes delivered market-driven approach failed? 3. The impact of regulation on the migration 4. Need for an end-date Regulation 5. Challenge 1: What is SEPA reachabilty ensured? 6. Challenge2: Themandatemigration 7. Challenge 3: BIC optional 8. Challenge 4: 17 months to the real end-date 9. Challenge 5: Is communication enough? Seite 6

7 The impact of the regulation on migration The target: Limit the regulation to what is really needed to ensure a smooth and successful migration DSGV responded to the June 2010 working paper of the Commission and recommended to focus the regulation to the following major aspects 1. set one single end date with sufficient lead time (48 months) 2. use of IBAN and BIC if not otherwise agreed 3. ensure pan-european reachability also for SCT 4. niche products should be out of scope 5. retain ownership of SEPA schemes at EPC 6. provide certainty on long-term business model for direct debits With the enforcement of Regulation No. 260/2012 a number of additional challenges for PSPs came on the migration agenda: such as Articles 5 and 16 and the technical annex Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 7 Roland Flommer 22 June 2012

9 Yes. We need an end date regulation Processing payments for customers is part of a very trustful relationship with their PSPs For customers safe, fast and efficient payment products are a key requirement Any fundamental requirement to change payment behaviors must be well argued and should be comprehensible German stakeholders were in favour of competing legacy and SEPA Schemes for a longer time Therefore a real market-driven approach needs more time a faster termination of legacy Euro schemes could only be provided by regulation The length of the migration period must respect the needs of customers to avoid failures and economic damage Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 9 Roland Flommer 22 June 2012

10 Agenda 1. German Savings Banks are commited to the SEPA project 2. SEPA schemes delivered market-driven approach failed? 3. The impact of regulation on the migration 4. Need for an end-date regulation 5. Challenge 1: What is SEPA reachability ensured? 6. Challenge2: Themandatemigration 7. Challenge 3: BIC optional 8. Challenge 4: 17 months to the real end-date? 9. Challenge 5: Is communication enough? Seite 10

11 SEPA is = 32? Our expectation was a full reachability of all PSPs in the EEA De facto reachability is granted within the Euro countries only The legal requirements to process payments in the inter-bank space in line with regulation No 260/2012 is de facto limited to participants of the EPC Schemes only Conversion of customer payment orders in case of non reachability into other formats (e. g. MT103) and higher processing costs are the consequence On 31 October 2016 reachability obligation will be extended to those PSPs outside the Eurozone which offer domestic payments in Euro The European banking community should commit to close the remaining gap at least for SCTs Roland Flommer 22 June 2012 Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 11

13 German direct debit mandats remain valid Article 7 of Regulation Nr. 260/2012 provides the required legal backing of our contractual solution By changing the payer s terms & conditions for direct debits the payer intructs his PSP to execute SEPA direct debits under a given legacy direct debit mandate This procedure has been proposed by the Federal Supreme Court (Bundesgerichtshof) as part of a court decision in 2010 Payees have to inform the payers about the individual migration date to SEPA direct debit by indication the Creditor Identifier and the Mandate Reference Payees are able to migrate their approx. 700 billion Einzugsermächtigungen to the SEPA direct debit mandate after 9 July 2012 Roland Flommer 22 June 2012 Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 13

15 IBAN only a dream becomes true? Article 5 of Regulation Nr. 260/2012 changes the payment traffic rules by making the BIC optional for SEPA payments Today on domestic level the derivation of the BIC from a given IBAN is possible for more than 95% of all IBANs In cooperation with Deutsche Bundesbank the GBIC works on a solution to enhance the bank code directory with rules to derive the BIC On European level a similar solution is required It is proposed to define an authority with necessary legal instruments being responsible to ensure the setup and maintenance of an actual and safe database Roland Flommer 22 June 2012 Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 15

17 Estimated arrival time: 1 February 2014 Enforcement of Regulation No. 260/12 provoked a further push to setup migration projects by endusers and banks Remaining time of 17 months compared to a usual investment cycle is considered by some endusers as too short One major issue announced by some payment application developers is that SEPA updates will be provided next year Although the migration projects are running well the updates of subsystems and other applications are depending on the final features of the payment application German stakeholder representatives will be required to report their migration efforts to Deutsche Bundesbank on a quaterly basis Any migration issues will be discussed in the German SEPA Council Roland Flommer 22 June 2012 Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 17

18 Agenda 1. German Savings Banks are commited to the SEPA project 2. SEPA schemes delivered market-driven approach failed? 3. The impact of Regulation on the migration 4. Need for an end-date Regulation 5. Challenge 1: What is SEPA reachability ensured? 6. Challenge2: Themandatemigration 7. Challenge 3: BIC optional 8. Challenge 4: 17 months to the real end-date? 9. Challenge 5: Is communication enough? Seite 18

19 Communication must lead to responsibility Providing SEPA information and knowledge to customers is the key to make customers concerned Any costumer consultation by the PSP should lead to claer arrangements/ agreements to go foward with the migration A migration plan or scenario would help to define the next steps and avoids to lose time Information campaigns by government and public authorities are required to explain the political backgrund of the SEPA project Roland Flommer 22 June 2012 Finanzgruppe Deutscher Sparkassen- und Giroverband Seite 19

20 Thank you for your attention!