For the fifth year, the Financial Services Club ran a survey
of payments professionals worldwide to see how successfully regulations and technologies
are changing the European payments landscape, sponsored by CGI and EBA CLEARING.
The survey ran during the spring of 2013, and was completed
by 422 participants across over forty countries.
The survey began by looking at views on the future of the
European Union. Unlike the last two
years, where the sovereign debt crisis had caused major concerns about Europe’s
future, this year’s survey took place during a period when the news about
Europe was far more stable. Hence the
responses to the opening question on How
strong is the European Union? garnered a 59% positive response, compared
with a majority (52%) that were negative last year.
Furthermore, the decline in confidence in EMU is turning
around this year, as reflected by just 28% seeing a North-South Eurozone
divide, compared with 37% in 2012 and 30% in 2011.
The Progress of SEPA
In terms of SEPA, we asked When do you think the SEPA vision for “all Eurozone payments
transactions to be processed as though they were domestic” will be realised?
There was an expectation that most would answer 2014, as
this is when the end-dates are enforced, so it came as a surprise that almost a
third (31%) of respondents estimate SEPA’s delivery to be after 2017 or even
The second question looked at how ready banks’ customers are
for SEPA’s end-dates and found that only 20% are ready for SEPA implementation
whilst a staggering 57% are still in planning and a further 23% are either
unaware or not even planning for the change. This aligns with many other research reports that found the same.
The top three benefits from SEPA are:
- Increased competition in payments
- Lower cost of processing
- Revitalised and modernised infrastructures
However, when reading through the commentary on this
question, a popular refrain appears to be none of the above. In other words, a large number of
participants have seen no impact, benefits or changes yet from SEPA.
According to the majority of participants, the major focus
after SEPA will be a move towards real-time payments.
The march towards real-time payments certainly seems to be
developing as, just in the last year, Sweden and Poland have implemented
refreshed infrastructures supporting real-time payments processing, building
upon the UK’s Faster Payments Service launched in 2008. STEP2 offers same day settlement and intends
to move to real-time later in 2013. In
addition, EBA CLEARING launched MyBank in March 2013, a real-time authorisation
service for merchants and consumers supported by 28 banks across Europe at
This may be a key takeaway from this year’s report, as we
are seeing major moves to real-time payments processing and yet European
regulation has constrained this development if anything.
The Risk of Liquidity
In the third section of the survey, we discussed different
aspects of liquidity risk.
94% of banks are now focused upon some form of liquidity
management process compared to only 78% last year. That focus has increased thanks to the
regulatory push, with almost half the banks (49%) saying that it is due to
This has resulted in more focus upon liquidity management
and automation, with 78% of bank respondents saying that they would know their
future financial exposures in the case of a liquidity shock, compared to only
70% of banks last year.
Finally, in answer to the question: Can you quantify your intraday exposure to individual counterparties
during the day? and almost 9 out of 10 banks plan or already have a system
in place to do this (89%), compared with 8 out of 10 (79%) last year.
The Future of
The final section of the study reviewed the more general
opportunities for growth in the future of payments, and where to make the major
investments to gain revenues.
The majority (23%) of participants voted for mobile as a channel for service and
transacting as the major growth area.
This was closely followed by improving the efficiency of payments
Another impact area identified the growing impact of social
media – LinkedIn, Facebook, Twitter, etc – on bank-to-corporate and
Almost three-quarters of respondents have seen some form of change to
their business as a result of the rise of social media.
In particular, banks have seen more impact (80%) than
non-banks and non-financial firms (72%), with 56% of banks seeing increasing
impact on their business compared to just 45% of non-banks and non-financial
In conclusion, this year’s survey has found a number of key
- Respondents are more positive about the future
- SEPA is proceeding but still has to deliver,
with the majority of corporate clients unready
- Real-time payments is a trend that is developing
rapidly across core retail payments infrastructures
- Liquidity management is a critical area of focus
- Mobile financial services as a channel to
corporate and consumer is a big growth area today
In conclusion, Europe has taken a long time to deliver its
vision of a harmonised payments market and, in the process, may find the
opportunity that existed to modernise their infrastructures has been missed as
real-time clearing and settlement becomes the norm elsewhere.