It’s not quite so fashionable to talk about SEPA these days. After all – aren’t we all wishing the rules and solutions were are all defined and implemented? But there’s still a fundamental challenge that banks (and corporate treasuries) face: integration among both legacy formats and legacy systems. Payments hubs are still often discussed as a solution, but the stark reality is that even after several years of industry discussion, few banks have implemented a payments hub to address SEPA.
Don’t get me wrong, I still believe in the value of a hub. The centralization of processing to ‘break down the silos’ is still a major issue as banks strive for efficiency and cost savings. However, the effort involved to implement a hub strategy is considerable and can make these projects very daunting (especially if no application is replaced). One approach that is gaining more traction is the payments framework as a means of managing the flow of SEPA transactions between new and legacy components. This enables banks to start on a technology renewal path in a phased approach, with or without a hub. A big-bang replacement of payment processing is no longer required as flows can be migrated in phases by reconfiguring the integrated workflows as new systems and payment schemes become available.
Fundtech, one of the top payments technology companies in the world is one of Microsoft’s key partners. Some of you may remember that the companies jointly announced a new payments integration suite at SWIFT Sibos in 2009. This solution provides not just XML-based integration for payment schemes, but also facilitates payments management and monitoring with a dynamic dashboard for business operations. This is actually a payments-vendor implementation of what Microsoft calls the Payments Services Factory. The benefit of an approach like this? Banks can embark on the technology renewal program yet also retain the flexibility to adapt to future rule changes mandated by SEPA and the PSD. I encourage you to download a video of the Fundtech solution and see for yourself.