Social Media e le banche (presentazione)

Come promesso, ecco una nuova versione della presentazione Social Media per le PMI con alcuni esempi e numeri specifici per il mercato bancario.

The english version is here.

Monte Paschi Siena utilizza i Social Media

Al momento non sono molte le istituzioni finanziarie che utilizzano i Social Media.

E’ con piacere quindi segnalare i Video virali di Monte Paschi Siena.

Barron McCann names John Doyle Swift business manager

I am glad to post this news since I had the pleasure to work with John while we were both working in VocaLink.

Leading information security and IT services specialist Barron McCann has appointed former director of VocaLink and Swift, John Doyle, to lead a major new business drive into the Swift and corporate payments marketplace.

Read the news at Finextra.

ING Direct sets up bank fee comparison on Twitter stream

[Source: Finextra - 02 July 2009]

The application is a new addition to the fairfees.ca Web site launched last month by ING Direct, which invites Canadians to speak up about fair – and unfair – bank service charges and fees.

Peter Aceto, president & CEO of ING Direct Canada says the bank decided to launch the service after picking up a trend from Canadians’ feedback on Facebook and Twitter that they are not saving as much as they’d like to, especially in today’s economy.

He says: “To make it even more difficult, some financial institutions keep increasing and adding more fees, often wiping out any interest that might have been earned, making it even tougher for Canadians to save.”

The ‘fee twitter’ application is open to both existing Twitter users as well as non-users who may post a guest tweet and view the stream of comments posted by other users, thereby providing a single destination for savers to share and compare the bank fees they’ve been charged

“We are listening to Canadians’ concerns. That means, if they are talking on social media such as Twitter and Facebook, we want to be part of that conversation,” says Aceto. “As a leading online bank, it makes sense that we’d help Canadians talk about their savings in the same space.”

The danger that SEPA may not happen

In effetti non riguarda i temi web 2.0 ma non ho potuto resistere…è troppo divertente (per chi ha la “fortuna” di conoscere i temi SEPA).

Not exactly relevant with web 2.0 topics but couldn’t resist…too funny (for those “lucky” people who knows about SEPA).

[Source: Chris Skinner's blog]

The danger that SEPA may not happen

I was invited to a conference this week and given the title of the talk as: “Why there’s a very real danger that SEPA may not happen”.

As a good European who believes in the PSD and SEPA, I declined to discuss this and invited my long-time acquaintance Sir Jonathan Brit to speak on my behalf.

Sir Jonathan “Johnny” Brit is the eighth generation of Brit’s to Chair Fusty Bank UK plc, which recently appeared in this blog talking about mobile telephones.

He is one of the old guard, highly bigoted and patriotic, anti-European British people, normally referred to as an ‘old fart’ … although not normally to his face.

I wrote most of his speech down for readers of the Finanser to see what a typical British old fart thinks about SEPA.

However, before you read his speech, please note that the views he expresses are not my own.   For example, he seems to think that that it’s purely a political plot by the French and Germans to take over Europe’s financial infrastructures via the EBA and ECB respectively which is why no-one has any urgency to implement.  This is why nothing’s happened yet, after ten years, and that the lack of leadership, corporate inclusion, end-dates and more, means it is not working.

Not sure I agree with these views so, if you are interested in my views, the Financial Services Club is conducting research into bank, corporate and national readiness for the implementation of SEPA and the PSD during the summer for a publication to be released in September 2009.

If you are interested in participating or sponsoring this research, please contact admin@balatroltd.com.

Meantime, over to you, Sir Jonathan.

Biography: Sir Jonathan “Johnny” Brit is the eighth generation of Brit’s to Chair Fusty Bank UK plc since its founding in 1842, as a bank serving the colonial empire of Britain. Johnny entered the bank as a mailroom errand boy in 1972 and rose through the ranks to take over from his father, Sir James “Jimmy” Brit the Third in 1988. Now, Johnny has handed the reins of the bank to his son, Gerald “Gerry” Brit in order to take the Chairmanship role this year. Johnny is married to Jenny Brit, and has three boys, two German Shepherds, an estate in the country and several mansions overseas in the Windies and India.

Good afternoon.

My name is Johnny Brit, Chairman of Fusty Bank UK plc.

Of course, we’re not actually based in the UK for tax reasons, but it makes sense to have a registered office there as our people trust us more that way.

Now then, I’ve been asked here today to talk about this SEPA thing, which stands for Silly European Payments Agenda I believe.

I’ve got to be careful when I say that, as I ran this past our PR and legal folks and they’ve made sure that everything I’m going to say is politically correct.

That’s why I need to get some things out in the open before we start as I know that you all take this thing very seriously but I ask myself, after almost ten years of all your faffing about trying to work out what it is, whether you are really serious about this stuff.

I don’t think so.

Now we all know why, don’t we?

Yes, because it’s just a Stupid European Political Agenda isn’t it?

It’s politics

This SEPA thing and all that stuff about a Payment Services Directive was only dreamed up by the poor political eurocrats in Brussels because they couldn’t pay for their books and cups of tea without incurring cross-border charges.

That’s why this thing came about and that’s why it’s here.

It’s nothing to do with saving costs and increasing efficiencies, which is what the politico’s claim … but only because that sounds good. No.

It’s just to reduce their own unnecessary expenses of having to live in boring old Brussels whilst paying for a nice penthouse villa on the Riviera or chic bordello in Bermondsey.

That’s the truth of it.

I know it’s true, you know it’s true, and as a political agenda we can pretty much ignore it can’t we because, by the time they get around to realising we haven’t done it, they’ll no longer be MEPs and the new lot come in and we can mess them around too can’t we.

Now certainly that’s what we’ve been doing over here in Blighty – ignoring it that is – and I thought most of you European Johnny’s had been doing the same which is why nothing has happened.

But then I cannot believe how much of a dust-up there has been about this over the past ten years.

I mean you’ve had conferences, meetings, committees, working parties, conventions … you name it and you’ve had it. All about this silly euro thingy and these associated SEPA and PSD bits.

And for how long have you been doing this?

Ten years!

A decade of what?

Pwah! This all began ten years ago for god’s sake and what have you got?

Sure, there’s been the Regulation 2560 which banned razor blades and biro’s.

Sorry? Oh I didn’t realise. I thought you said “I ban BIC”, not IBAN BIC.

Well, either way, IBANs and BICs haven’t happened have they?

Certainly, most of the corporates we deal with haven’t implemented these … but that’s because we do it for them as it is a sure-fire way to keep our business customers locked into the bank.

In fact, I don’t want them to change their SAP and ledger systems to work with IBANs and BICs as they will then have portability of their bank account.

That may be what the eurocrats want, but I don’t want that so they can just go and stuff their standards up their rears, as I’m keeping my customers locked into Account Numbers and Sort Codes. We’ll handle the IBAN and Biccies.

I guess that is why, after ten years, less than 2% of all potential Eurozone credit transfer payments are migrated onto these new SEPA Credit Transfer (SCT) services, as there is no critical mass or need for this amongst the people we serve.

Funnily enough, fewer than 2% of all credit transfer volumes in 15 months would mean that to get to the total market space SEPA is meant to reach would take 100 years.

A century to achieve critical mass?

Sounds about right to me as that means SEPA won’t happen in my lifetime.

That’s also why in ten years, there’s no legal structure in place, no movement of other electronic payments, and just an inconsistent idea that there might be some sort of standardised direct debit thingy.

Ten years and I think that you, like me, have just been ignoring this thing hoping that those Brussely Eurocrats will go away and stop worrying about their travels around Europe and bank fees.

Trouble is, they haven’t gone away, have they?

That’s why we are all eagerly waiting the Payment Services Directive in November or, as we call it, the Psssttt or the Okey-Kokey Directive. Y’know, you put your left leg-in and your right leg-out, so no-one knows which leg is which and then we can charge lots for it.

November 2009

Now everyone thinks that we have all been waiting for the Psssttt, because then direct debits can come in on November 2nd and suddenly there will be lots and lots of volume.  That’s because all the businesses and authorities of Europe will place all their payments and transfers electronically through standardised systems and infrastructures.

Complete baloney of course, as most of our corporate customers haven’t been consulted about this. I mean, we did allow them in the room didn’t we, but only as long as they didn’t say anything or for as long as we could ignore them.

That’s why corporates had no representation on any of our committees and discussion groups, but we are here to serve them of course … just as long as we can keep them locked in to our bank and not someone else’s.

So now we have these deadlines, with 1st November 2009 looming large as the date when things really things start … but then things won’t finish as we have no end dates, do we?

We have no end dates because no-one can agree on this euro thing – who’s in and who’s out – and because we have no leadership.

No-one is forcing this through because the leadership has to come from the politicians, and the politicians don’t want to rock the boats in their home countries over something that’s not a domestic issue.

After all, how many cross-border payments do we make?  Less than 2%!

That’s why the politicians don’t want to upset their home countries and create a backlash.

It’s a French and German plot

The Germans may want SEPA as they have the European Central Bank but German banks don’t want it because they have no central infrastructures; the French want it because the EBA is based in Paris and offer a PEACH, but French banks don’t want it because it will damage their fee rates; the Italians are trying to work out what a Euro is; the Spanish are asleep and saying ‘manana’; and the rest of Europe are trying to work out what the hell the other guys are up to.

Meanwhile, the Dutch are leading the whole thing because they’re the only people who speak the main languages of Europe. It would have been the Swiss otherwise, but they’re not in Europe so they had to bow out by default.

Typical jolly European beanies.

And even with all of that, they can’t agree.

I mean, the PSD is meant to be a hard deadline date for implementation by 1st November 2009 and the Swedish, who will have the Presidency of the European Union by then, have already said they cannot implement it.  But at least the Swedish are honest, as the rest of the countries are just keeping quiet and pretending.

For example, look at the French.

They go and push for all this stuff and put all the infrastructure in Paris – yes, the EBA who run all this SEPA stuff, where are they based? Paris! – and then, after all that, what do the French go and do? They say “non” and totally ignore it all.

Oh yes, and just in case you missed it this was the announcement of France not bothering with SEPA Direct Debits until November 2010.

Typical francais I say, especially as they announce this the day after the European Payments Council agreed all the banks of Europe would have these direct debity thingies in place by November 2009.

Sacre Coeur, mon dieu and grande m*rde.

Anyways, the French SEPA Committee, made up of the Banque de France and the French Banking Federation, are probably following Monsieur Sarkozy’s lead and thought: “C*sse-toi“.  And at least I’ve read “La Princesse de Cleves”.

Anyways, this is normal French thinking and short of bunging a few tractors across the Channel Tunnel to block electronic payments moving across borders, the French can only stick to their guns and try to ignore this silly political agenda.

Which brings me to another thing.

What is SEPA for anyway?

All it does is create a nice large zone for the Germans and French, who don’t want it, to control the finances of the Spanish, Italians and rest, which is a good reason for not being in the euro isn’t it?

I mean this SEPA thing is only good for 2 countries isn’t it?

Sure, there are 16 countries in the Eurozone but, after the recent credit crisis, you’ve got the Germans controlling interest rates, the French controlling the infrastructure, and the Spanish, Italians and rest all suffering with crippling unemployment and stagnation with no hope of getting out of it.

That’s why there are no end dates because we all want to keep our national infrastructures in place just in case. Just in case we have to go back to French francs, Italian lira, Spanish pesetas and Deutsche marks.

And the British?

This is why we British are not in the Eurozone for very good reasons, the utmost of which is our right to retain our sovereignty. The Queen is very important to this island and represents our long heritage of ruling the world which is why everyone speaks English, even the French.

So, we need to retain our sovereignty and stay out of the euro for this reason.

In summary, after ten years we’ve got a little bit of something and a lot of nothing.

No end dates, no leadership and no mandate to make this change happen.

Ten years!

The Americans put a man on the moon in six years. Their moonshot was announced in 1963 and achieved in 1969.

In six years, Americans can put a man on the moon and in Europe in ten years we can’t even get an agreement on a direct debit.

That’s why we here in Fusty Bank UK plc are outsourcing all of our Eurozone payments to our trusted allies … NACHA.

Thank you and goodbye.

Please note once again that the views expressed in this blog entry are not my own but Johnny Brit’s.

If you are interested in what is happening with SEPA and the PSD, the Financial Services Club is conducting research into bank, corporate and national readiness for their implementation for a publication to be released in September 2009. If you are interested in participating or sponsoring this research, please contact admin@balatroltd.com.

Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking

[Source: bankwatch - 7 May 2009]

Interesting new report noted by Gartner.  I haven’t seen the report (hint hint) but the press release is appealing and fits with the general theme bankers need to get beyond their current problems, and look up for new directions and strategies.

Gartner make the point that fundamental shifts are occurring online, and while not specific to banking, except in pockets, the directions at play are too fundamental to ignore as being permanent.  Sounds like an interesting report.

Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking | Gartner

“Currently many traditional bankers tend to reject the concept of social banking as a fad while others refuse to recognize or accept any degree of threat posed by such new phenomena,” said Alistair Newton, research vice president at Gartner. “Although bankers may see current low usage by consumers as a permanent source of safety, this disregard for changing consumer behavior with social networking generally may mean that they miss the possibility of fast, viral uptake of social banking.”

Consumer interest in social networks and social banking does not mean that consumers expect or want their banks to be social networks like Facebook or MySpace. In a January 2009 survey of 3,988 consumers who use online banking (1,970 in the U.S. and 2,018 in the U.K.), the results showed only a small percentage of respondents (7 percent in the U.S. and 8 percent in the U.K.) said that they were interested in using an online social network on their bank’s Web site to talk to other customers. Out of this small percentage, most were interested in using social-network information about how their banks compare with others and to find information to simplify their financial and personal lives. Although these consumers are few currently, they provide clues about the desires for social banking and are likely to be the first adopters and therefore online trailblazers for social banking.

“What has become clear from the growth of social networking as a phenomenon has been both its speed of growth and the viral impact of such communities,” said Ms. Cohen. “Ideas are picked up, established and disseminated within short time scales, much too short to allow late entrants to the market to take advantage of the opportunities that will arise. Banks need to be positioned to take advantage of this shift to a new age of social banking.”

Exchanges, Banks and Brokerages Start Tweeting

[Source: Wallstreet & Technology - By Melanie Rodier maggio 01, 2009]

Exchanges, brokerages, banks and regulators are all jumping on the Twitter bandwagon and exploring new ways to reach out to their customers — and sometimes their foe.

Twitter has seen a surge in activity in the last couple of months. The site received a huge boost in popularity thanks to a host of high-profile celebrity endorsements — including from Demi Moore, Ashton Kutcher and Oprah Winfrey.

Twitter was also much hyped in the mainstream press after hostages in the Mumbai terrorist attacks tweeted to family members and friends about the action that was unfolding in front of their eyes, and when it became the first to break news about Captain Sully’s emergency landing on the Hudson river in January.

Most recently, reports have flooded the mainstream press about hundreds of thousands of people using the site to tweet about the swine flu.

The social networking site now counts around 14 million users. (These include Wall Street & Technology (wallstreettech) and its editors — Melanie Rodier (mrodier), Greg MacSweeney (gmacsweeney), Penny Crosman (pennycrosman) and Ivy Schmerken (ischmerken).

Corporate Insight, a New York-based market research and consulted firm, first studied financial firms’ use of Twitter last October.

“At the time, we thought it wasn’t clear how firms were going to use it, but a lot of them had registered a profile. But now there’s been a major uptake in activity,” says James McGovern, VP of consulting services at Corporate Insight.

“Twitter has become a lot more popular. Celebrities have embraced it. So it’s given incentives to financial firms to explore ways to use it,” he adds.

CME Group has emerged as one of Twitters’ leaders among the financial industry (twitter.com/CMEGroup) , counting 238,444 followers — impressive even by mainstream standards. (By way of comparison, both CNN and pop culture icon Ashton Kutcher recently counted 1 million).

The exchange was one of the financial industry’s earliest adopters of Twitter, and has been on the platform since September 2008 (It launched its profile during its high-profile global financial leadership conference in Naples, Fl).

“We are looking at it as another opportunity from a standpoint of reaching out and talking to customers, as well as a branding opportunity for us to talk about the things we feel are important for the exchange to talk about, from a regulatory standpoint as well as from a broader economy standpoint,” says Allan Schoenberg, Director, Corporate Communications at CME Group.

“What makes it a unique tool for us is that we cover every asset class. Because we’re so diverse, it’s a great opportunity for us to go over various news trends and issues, and talk to various customers,” he adds.

Overall, Schonenberg says he has found that Twitter can improve customer loyalty as well as foster advocacy for things that matter to the exchange. “We’re also leveraging it to cross-promote other things we’re doing in social media; we’ve got a Facebook fan page and a LinkedIn page.”

In recent months, Nasdaq and NYSE Euronext and other exchanges have also joined Twitter. The SEC is now also using the platform in a bid to revamp its image, most recently sorely damaged by the Madoff fraud scandal.

Twitter and other social networking sites are reshaping the way firms communicate with their customers, McGovern says. “It allows firms to listen to their customers, to monitor what people are saying, good and bad. And it allows them to address complaints they have. They can interact with their customers in a much more personal, proactive way.”

Corporate Insight says firms such as Wells Fargo, Wachovia, Bank of America and the brokerage Scottrade (twitter.com/scottrade) are using Twitter to comment on news stories about their own firm. They are also posting links to direct people’s attention to news items. Others are using it to promote their own products.

“But the most interesting use is to monitor what people are saying about a firm, and to respond,” he says, concurring with CME Group’s Schoenberg.

McGovern points out that among banks and brokerages, Wells Fargo and Bank of America stand out in their use of Twitter in this way, actively using it as a platform to answer consumer questions and address their complaints — even setting up calls with customer service to ensure the user’s issue is handled well,” he adds.

Both Wells Fargo (twitter.com/ask_wellsfargo) and Bank of America (twitter.com/BofA_help) only started using Twitter recently. They now count 1,092 followers and 1,810 followers respectively.

Wachovia, which has 3,292 followers (twitter.com/Wachovia) , also uses the platform to respond to comments from Twitter users. But it also used it to talk about its merger with Wells Fargo when it was announced. “It was doing its best to provide a positive take on the merger and talk about its benefits,” says McGovern.

Scottrade is also using the platform to respond to users’ questions and complaints. Some examples of recent posts include: @billybobseq47 – I am sorry to hear you aren’t happy. Is there something I can help you with? Please DM me your concerns. And: ” @ro_gupta – We don’t own a helicopter, it’s just part of our marketing campaign!

Overall, brokerages have been slower to adopt Twitter compared to other financial firms — mainly due to compliance challenges — although like others, they are gradually jumping into the fray.

“They are supposed to preserve all communications and are held to a certain legal standard,” McGovern explains.

“But Twitter is very hot right now, and it does provide a pretty low risk for firms to nip problems in the bud,” he says.

A whiter shade of profit

A whiter shade of profit
Heather McKenzie
1 April 2008
Banking Technology

Shrinking revenues are forcing banks to optimise operations in novel ways, including outsourcing non-core activities to rival banks while retaining their own customer relationships
Outsourcing used to be something of a dirty word in the financial services-industry. While other sectors grasped the opportunity to divest themselves of ‘non-core’ tasks, such as human relations and payroll, financial institutions held firm against the trend for many years. The business of banking was far too important to let any of it be handed over to a third party.
But economic reality has long since dawned and outsourcing is now a common approach, particularly for processing-intensive tasks in the back office. To sweeten the pill, a number of terms are used as alternatives to outsourcing – white labelling, private labelling, grey labelling, and joint ventures. They all, essentially, mean about the same thing – banks can hive off elements of their business that they can no longer afford to run to specialists or scale players who can achieve results at a much lower cost.
The latest drivers of outsourcing are the Single Euro Payments Area, the European banks’ initiative to harmonise payments across the euro zone, and the European Commission’s Payment Services Directive, which provides the legal foundation for the creation of an EU-wide single market for payments and must be transposed into national law across the Union by November 2009.
The two initiatives will transform the payments industry in Europe, treating cross-border payments as local ones within euro zone countries, leading to a decline in these revenues for European banks. The World Payments Report, a survey published by Capgemini, ABN Amro (now part of Royal Bank of Scotland) and the European Financial Management and Marketing Association in November last year, estimates that direct payments revenues for European banks will decline by between 38% and 62% in some parts of the market by 2012.
In the absence of this revenue, some banks may find it is not cost effective to stay in the payments processing game, particularly as they will face greater competition from new market entrants, such as the payment institutions created by the PSD. “The Payment Services Directive and some other changes in the payments business are providing a catalyst for banks to consider whether or not they want to be in the payments business,” says Alan Koenigsberg, core cash management product executive for EMEA and the Americas at JPMorgan. “I think in the euro zone, consolidation will lead to about five big banks dominating as payments service providers.
“Many banks are looking at component outsourcing, where they will hand over a component of the business, like clearing and settlement, while retaining the customer relationship. Banks are looking to outsource the parts of the business that they feel are not value-added, but they want to continue to face the market with their brand.”
The World Payments Report found that 58% of banks already outsource or plan to outsource part or all of their payments activities within five years and 68% plan to offshore the activity as well, whether back office, IT or support functions.
Said the report: “Banks are repositioning their business models (on a European scale), enhancing their service offerings (competitive model), and optimising their delivery models to sustain their strategic ambitions in the future payments marketplace. Banks are turning to delivery models that rely on open architectures to:
▪ Enhance product offerings: flexibly add white-label products to their portfolios quickly enough to satisfy clients;
▪ Outsource payments processing to third parties, or insource others’ corporate or financial institution payments; and
▪ Permanently optimise this model by offering clients the most competitive integrated services in the market.”
Successful banks, said the report, will convert their delivery models into open architectures, which will enhance their product offerings, support the needed flexibility to bring white label products quickly to market, outsource payments processing or insource processing from others, and permanently optimise this model by offering clients the most competitive integrated service products on the market.
White labelling, which has been long established in the FX world, is attractive because it enables the bank that is outsourcing its activities to retain its brand and customer relationship.
In a paper on SEPA and sourcing challenges published in December last year, UK legal firm Denton Wilde Sapte said larger SEPA players, aiming for ‘critical mass’ transaction volumes, are focused on creating an end-to-end SEPA offering, including white label and insourcing services for smaller SEPA players. These banks would also provide the additional optional services (AOS) that are a considered an integral part of SEPA, given that they will help banks to recoup their losses. AOS may include integrated treasury systems and financial supply chain tools.
“Whichever strategy is chosen, effective systems and sourcing will be a key component of a successful SEPA strategy,” said the Denton Wilde Sapte report. “SEPA will demand significant IT investment by banks and careful reviews of their organisational processes. As the SEPA schemes are independent of underlying payments infrastructures, banks can secure competitive advantage by developing leaner mid-and back office payments operations, more efficient customer fulfilment and data routing functions and greater product innovation.”
Among the banks that are aiming to be major players in the SEPA environment is Deutsche Bank, which offers financial institutions the chance to leverage its global branch network and domestic clearing memberships. Corporate clients open accounts with Deutsche Bank, which are embedded in a single customer service and relationship management interface through the financial institution. Deutsche Bank provides its full set of cash management services, including the option to white label db-direct internet, the German bank’s web-based electronic banking system and its liquidity management technology.
Colin Digby, director of wholesale solutions at Deutsche Bank, says a dozen banks are already using the whitelabel option and it is being rolled out in a “number of other banks” as well. The key advantage of a white label service, he says, is that it retains the same look and feel of the client’s bank.
The implementation of white labelling differs from bank to bank, says Digby. “In some cases, the bank will use only the front end system to receive transactions which they then execute on their own book. They will also provide reporting and data back to their clients in the same application,” he says. “Another category of user takes the front end and complements that with Deutsche Bank’s processing capabilities.”
Way back in May 2004, Deutsche Bank stole a march on its European rivals when it announced a strategic partnership with Barclays Bank that allowed the UK bank to provide its larger corporate customers with cash management services across Europe. The deal was hailed as a first in Europe, with Deutsche Bank offering its cash management franchise to another financial institution to serve its corporate clients.
The main drivers for white labelling or outsourcing, says Digby, are cost, time to market and the level of expertise required in-house. “If you intend to build or buy an electronic banking system, you need a supporting infrastructure around it, which needs to take into account IT, bug-fixing and future development plans. Regulatory requirements in the payments industry are becoming more stringent and the development piece is therefore more complex,” he says.
Digby says many more clients are happy to say “we know you are a global transaction bank and you have developed these systems yourself and we will buy that and will be able to go to market immediately and be future-proofed against further developments in the industry.”
Only stage one of SEPA – credit transfers – has been achieved to date. By November 2009 the PSD is scheduled to be in place as will be SEPA direct debits (which need the PSD to be in place). Until then, and perhaps for a couple of years afterwards, most observations about SEPA and its impact will be speculation.
In a speech at a conference organised by the Federal Reserve Bank of Kansas City in the US in May last year, Getrude Tumpel-Gugerell, member of the executive board of the European Central Bank and one of SEPA’s main cheerleaders, raised the issue of non-banks and their role in SEPA, something that has concerned Europe’s financial institution incumbents. She said: “Non-banks offer complementary services to banks, basing their success on economies of scale. It is also conceivable that a bank may establish its own ‘non-bank’ and confer upon it part of its payment functions. Thus, the questions raised are to what extent outsourcing could expand, and whether banks in the future would maintain commercial relations with their clients, as is the case in the IT business nowadays.”
JPMorgan’s Koenigsberg has a similar view. “White labelling, joint ventures and outsourcing have become plays in the SEPA environment. The Payment Services Directive creates payments institutions and there is no reason these cannot be created as subsidiaries of banks. The PSD will be a catalyst for banks in deciding whether or not to play in the payments space. Depending on the size of the institution, it could outsource its own payments to another provider, or could create a payments factory and insource, thus creating a truly private label business.”