The gtnews Global Corporate Treasury Awards topped the evening on the second day of Sibos in Toronto.
The evening was kicked off with cocktails, hosted by SWIFT, in the Austin Gallery, which in earlier days comprised the executive offices of the bank, before moving to the Grand Banking Hall.
The high calibre of entrants to the awards was impressive. To read all about the winners, please click here.
SEPA Panel DiscussionAt the beginning of the second day of Sibos, I participated in the European Payments Council (EPC) panel discussion entitled ‘Shortcut to the Single Euro Payments Area (SEPA)’. The panel included: Gerard Hartsink, EPC chair; Kevin Brown, head of global product management, RBS GTS; Ineke Bussemaker, chair of the EPC E-commerce Payments Working Group and director, payments and savings, Rabobank Nederland; Dag-Inge Flatraaker, chair of the EPC M-channel Working Group, DnB NOR Bank; and Javier Santamaria, assistant general manager; SEPA Payment Schemes Working Group chair, EPC, Banco Santander. Over 130 people attended the session, which shows that issues surrounding the implementation of SEPA still persist.
The panel discussed:
- Meeting customer needs: an update on the evolution of the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) payment schemes and other EPC deliverables.
- The expected EU SEPA regulation: deadlines for mandatory migration to SEPA and other aspects relevant to the market.
- The global perspective: impact of SEPA beyond Europe.
I presented results from the gtnews 2010 Payments Survey, which showed that corporate treasurers still have many questions about SEPA and what it will mean for their business and operations. The main findings of the 2010 survey were:
- Seventy percent of organisations have not implemented SEPA products - in western Europe this was still quite a high percentage at 60%.
- Of the respondents who do not currently invest in SEPA products, 46% do not plan to invest in SEPA products in the future.
- The most popular reason given by 66% of organisations for not investing is that SEPA is that it is not applicable to their company.
- Nineteen percent of responding organisations indicate they were “not convinced of the opportunities and benefits for me/my company”.
- Another 19% indicated that they “need more insight on the impact of implementing SEPA in my company” as a reason for not investing in SEPA products.
- Surprisingly 67% of organisations in western Europe cite “not applicable to my company” as a reason for not investing in SEPA products, followed by “not convinced of the opportunities and benefits for me/my company” with 33% of respondents.
In an attempt to update the picture, particularly after the developments outlined by the other panellists, I took a straw poll of the European Treasurers Council in September - this resulted in more positive trends, yet the main issue surrounding the end dates for legacy payment instruments remained top of mind for corporates.
In the straw poll, 71% believe that SEPA regulations will affect their business, yet there is still much uncertainty around what that really means - and almost three in 10 corporates think that their business won’t be affected.
Better communication is needed and the responsibility for that is laid at the feet of the banks. In the straw poll, only 63% said that their bank had talked to them about migrating to SCTs and SDDs, so there is a gap there to be filled by the banks.
The main conclusion to be drawn from a corporate perspective is that there may not be a shortcut to SEPA. A Finnish bank respresentative in the audience confirmed that hypothesis, as Finland has set a strict deadline of next month to switch over the SEPA instruments. She advised that banks need to sit down with their corporate customers and go through the change on a face-to-face basis.
Basel III and Trade FinanceThe thorny issue of how Basel III will affect trade finance was addressed by Howard Bascom, board member and past chairman of the board, BAFT-IFSA; Steven Beck, head of trade finance, Asian Development Bank (ADB); Adnan Ghani, head of global transaction services (GTS) Trade, RBS; and Kah Chye Tan, global trade finance and working capital, Barclays Corporate. The session was moderated by Rebecca Spong, editor, Global Trade Review.
All four panellists agreed that, as it stands, Basel III will increase the price of trade finance products - a cost that will be passed down to the corporate client. It was this type of ‘unintended consequence’ that was the main subject of the session.
Ghani argued that the “devil was in the detail”, in the sense that although the purpose of the regulations were to protect and strengthen the global financial system, while in actual fact the rules as they stand would “drive banks to put money in more riskier portfolios” because they do not distinguish between low risk/low margin products, such as trade finance, and high risk/high margin products.
Tan argued that there is now a good dialogue between the banking industry and the EU/Basel Committee to address the outstanding issues. Although the pace is a bit slow in terms of his expectations, he is confident that the industry will end up at the right place. He added that any bank that “gets” the Basel rules will have a competitive advantage.
Ghani made a plea from the banking side that corporates and small and medium-sized enterprises (SMEs) had to speak up and join this discussion. It is the SMEs that attract the most attention from regulatory bodies to ensure they are not detrimentally affected.
First published on www.gtnews.com