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“I am Sepacus”

Last minute last week, I was asked to join a panel as one of the panellists had been unable to make it due to snow.

The panel comprised Tony Richter from HSBC; Bob Lyddon from IBOS; and Ruth Wandhofer of Citibank; with the theme: “what should banks be doing to be competitive after SEPA?”

It was an interesting theme, and one that occurs regularly in dialogue with banks and solutions firms.

Tony began be listing six points that he thought came to top of mind, which inspired me to make a list of six things too. As I was a last minute appointment to the panel, I thought I better write something useful down.

The second panellist was Bob Lyddon, who diagnosed the state of banks and SEPA with forensic skill, even quoting Russell Crowe and other luminaries in his analysis.

Quite unusual for a SEPA debate, and such intellectual prowess is rarely seen in conferencing circles.

For example, Bob’s crowning glory was making a pun based upon the old Bible quote from the Book of Luke: “physician, heal thyself” with “Physician, heal they SMED”.

To be honest, I wondered what he was talking about and thought it was some sort of disease, and a nasty one too.

But then Ruth explained that SMED is the SEPA Migration End-Date, or its Six Sigma Lean Management for Single-Minute Exchange or Die.

Hmmm, maybe it is a disease!

Anyways, after all that from Tony and Bob, Ruth turned to me for my opening remarks.

Completely at a loss of what to say for a change, especially after Bob’s quotes and biblical references, I could only think of talking about how does a bank make themselves look different after SEPA, when they all seem the same.

So I began with my own quote: “I am Spartacus”.

The quote comes from that lovely scene in the classic film where the Emperor is trying to track down which rebel slave dog is Spartacus to punish him.

Being the most popular slave dog, all the other gladiators stand up and shout: “I am Spartacus”, so that the offender cannot be identified:

This is like the banks of Europe, who all stand up and shout: “I am Sepacus!”

They are all SEPA-enabled and can all do the same things … if so, then how do they compete and appear different, when they all look the same?

Well, here’s my list of what a bank should do to be competitive after the implementation of SEPA.

First, relevance.

The bank needs to assess how relevant SEPA and cross-border euro payments are to their own operations. Is this heavy volume or light volume; are they euro mainly or non-euro; do their customers need such payments processing or not; and so on. These questions will then determine whether the bank should transform their back office, or just outsource the service and deal with this on an exceptions basis.

Second, focus.

This is probably the singular most important point: focus upon the customer.

Simple, but often overlooked or forgotten.

If SEPA’s capabilities are critical to the bank’s customers or could differentiate the bank to its customers, then it’s essential for the bank to leverage SEPA capabilities. Equally, if SEPA is completely irrelevant to the bank’s key customers, then it’s irrelevant to the bank.

This latter point was brought home to me by a Eurozone bank who said they surveyed their Top Thirty direct debit customers. These were utilities, public authorities, mobile phone firms and related corporates.

The question: “do you have a need for cross-border direct debits” came back with zero response.

No interest at all.


As a result, the bank has kept their old processing platforms and is handling SEPA payments on an exceptions basis only.

This may not be a good long-term plan but, whilst nothing is enforced, it is fine for now.

Third, protect.

Talking about customers, the bank should analyse which customers could be tempted to consolidate bank partners and payments processing as a result of SEPA and ensure that they are aware of the banks capabilities and differentiators, where they exist.

This struck me as a threat as I recently heard the story of one corporate invoicing customers in France, and collected payments through direct debits in Germany because the borders are close and the processing costs are cheaper through their German bank compared to their French bank.

All banks should look for and assess these areas of vulnerability and make sure they’ve got a strategy to keep the customer.

Fourth, leverage.

Banks should look for the things that SEPA enables as innovation and leverage these where they are easy to incorporate. For example, mobile and online developments.

As the European Payments Council (EPC) is working to provide some leadership here, banks should leverage this differentiation to show themselves as being innovative, even though it’s just leveraging things being done anyway.

The same could be said of einvoicing and real-time information services.

Where there are easy innovations, seize them and make out they’re your own.

Fifth, communicate.

Banks aren’t doing a great job at communicating why SEPA is relevant or irrelevant. The only communication I’ve ever seen about these changes for example, is a note from my bank saying I have to quote full IBAN and BIC details in future transactions.

No explanation of why this is worth doing, the benefits or reasons. Just that it’s a mandatory thing the bank’s customers must now do.


Finally, keep in simple.

Simplicity is the key and it’s simplicity that makes customers move.

The ATM’s convenience is why there are so many out there today.

PayPal’s simplicity is what made their business work.

The ease of self-service over the internet is why online banking, and now mobile banking works.

Therefore, the more the bank can look at SEPA instruments and search for ways to make things simpler, more convenient and easier for the customers, and tell the customer they’ve done this of course (see point five), then the more business they will gain and retain.

So there’s my list of points and, for banks that do the above, then they are truly competitive and not just Sepacus.


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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