Beyond SEPA – Streamlining Banking using Analytics
SEPA has turned out to be one of the most badly timed initiatives the banking sector has ever seen. As if the global financial crisis and all that has gone with it has not been enough – loan arrears, loan losses, stress tests, and now there is BASEL III, EMIR, etc. The lesson for SEPA seems to be to just get on with it. Conversion services can seem convenient but only defer the inevitable. Post SEPA surely things can only get better!
SEPA gives multinational and pan European organisations significant opportunities to streamline their banking activities in the Eurozone. Progressive organisations that have put SEPA migration work behind them are now actively planning for the post SEPA era. This planning includes centralised Euro payments and collections, and the consolidation of operational banking for the Eurozone into discreet hubs. Legal, regulatory and taxation issues will remain but streamlined banking can be achieved with the right analysis of funds flow.
International companies are discovering that analytics can provide them with better information both to demonstrate the business case for investment in cash management and treasury systems, and then to actually plan the implementation.
Another challenge that analytics can help to overcome is evaluating proposals from different banking providers. The lack of standardisation of transaction types and pricing together with different cash pooling systems can make it difficult when evaluating proposals from multiple banks. However, using analytics and data visualisation, companies can test different banking models to see the impact on cash flows and more importantly the Profit and Loss account.
Innovative analytics providers can actually deliver strong price and benchmarking capability. This facilitates like for like comparisons and the accurate evaluation of proposals from multiple banks. It allows companies to optimise their banking activity by modelling different banking scenarios.
Take the example of a trading group that operates multiple businesses in ten Eurozone countries. It can now operate a single payments bank and a main collections bank in one country. Legacy collections can be facilitated using a small number of regional sub accounts linked to a master account within the main bank. The main bank acts as a payments factory for the group. The movement of funds becomes seamless and very easy to manage.
Embrace SEPA. It really will get much better.
