Jean-François Denis
Global head of electronic payments
Fortis
SEPA in practice - A BNP Paribas Fortis viewpoint
Jean-François Denis is responsible for the operations of domestic, SEPA and international payments in all geographies and is sponsor of the SEPA program. Before BNP Paribas acquired Fortis, we met with him to discuss the Fortis strategy for SEPA and the challenges faced by corporate clients.
VocaLink: We have seen banks demonstrating a variety of strategies towards SEPA, what is the Fortis approach?
J-FD: First of all, we want to ease the transition to SEPA for our clients, both in terms of delivering seamless SEPA payments and helping them identify the necessary internal changes that need to be made for compliance. We believe that SEPA is a perfect opportunity for companies to review their treasury and payment operations and to optimise working capital usage. Companies can use SEPA as a catalyst to transform their business processes from end to end. We have a full range of products and services as well as a presence in 19 European countries to support company financial supply chains at every level.
VocaLink: You mentioned SEPA being used as catalyst for transformation for corporates, what areas do you think banks most need to address for their corporate clients?
J-FD: We see complexity as the major challenge for corporates and our role is to reduce, or remove this for our clients. For instance, handling mixed payment files (SEPA and non-SEPA), providing migration services to the SEPA and working with clients to review and adapt their payments value chains. This helps organisations maximise the benefits from SEPA and is particularly important for companies operating internationally. Fortis has state-of-the art platforms and a pan-European presence to help clients optimise their financial supply chains to improve cash flow and profitability. At Fortis, adding value is not only addressing the execution of the payment, but also extends to the overall optimisation of the financial supply chain.
VocaLink: How can banks best support their corporate clients during the SEPA migration?
J-FD: Most corporate treasurers and financial managers have a good understanding of SEPA and its implications for corporations. However, it is not only a matter of performing a comprehensive review of the systems and processes. Banks need to take into account the specific nature of each corporate client's business in order to define the right business case. Then they need to review financial flows throughout the company and provide the right tools to redesign and fine tune as necessary. Fortis can support new SEPA instruments and existing local formats and can offer clients practical help to standardise.
VocaLink: The issue of how to drive SEPA adoption has been a key discussion point within the financial community, How do you feel that this issue can be best addressed?
J-FD: What still needs to be formalised throughout the SEPA is a commonly agreed, pragmatic migration plan. High-level plans do exist and they help define targets in terms of dates. But there is still a need for detail regarding practicalities: to define what clients need to do and by when. These details will become clearer in the coming months. The EPC has requested that each community develops solutions to convert accounts from BBAN to IBAN/BIC to facilitate migration. Early adopters are likely to enjoy commercial benefits and we expect public authorities to play an active role too. Multinational companies can also take advantage of early adoption, especially when the migration to SEPA is linked to a broader review of their financial supply chains.
VocaLink: SEPA credit transfers have now gone live. What lessons can the banking community take from the launch?
J-FD: The launch of SEPA credit transfers was smooth, because most banks prepared thoroughly. Several complementary initiatives launched by the banking community also supported this, including the SWIFT testing service and testing in conjunction with the clearing and settlement mechanisms. However, the first version of SEPA credit transfer is relatively pure and straightforward and it may become more complex to manage if local flavours appear. We need to promote pan-European standards at all times. To enable the migration of the local direct debit instruments, more additional enhancement may be needed to the core SEPA direct debit scheme in the future. It is important, to implement such enhancements on a pan-European basis to avoid local implementations. In this respect, overall release management of SEPA schemes still needs clarification.
VocaLink: Finally, there has been a lot of talk in terms of opportunities for collaboration created by SEPA, in what areas do you believe partnerships help service the payments market?
J-FD: If we look at specific areas of the payments process such as developments in payment acquisition, we can see an increase in the number of potential channels. This is a typical area where partnership makes sense since some actors may enjoy comparative advantage in terms of technology or application. Document management is likely to grow in importance and will include mandates, contracts and invoices. These are important components of the overall financial supply chain, and partnership is the logical way to connect different actors in this chain. It is clear that both competition and co-operation will coexist in the evolution of SEPA.