© Experian Limited All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Limited. Other product and company names mentioned herein may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian Limited. SEPA - What the New Regulations Mean for You Jonathan Williams Director of Communications and Product Strategy

© Experian Limited All rights reserved. SEPA’s drivers and beneficiaries Who is SEPA for ? 1.Consumers 2.Businesses 3.European Commission/ECB 4.Banks/EPC Who has defined SEPA ? 1.Banks/EPC 2.European Commission/ECB 3.Businesses 4.Consumers

© Experian Limited All rights reserved. SEPA isn’t really about payments “An economic pillar preparing the ground for the transition to a competitive, dynamic, knowledge-based economy” Lisbon Agenda “Create the most effective and integrated financial services market in the world” Financial Services Action Plan (FSAP) “Objective 5: to create more competition between service providers, especially those active in retail markets” EU Financial Services Policy 2005–10

© Experian Limited All rights reserved. SEPA Regulations and Rules  CREDEURO/ICP  EC Regulation 2560/2001  EPC Resolution on use of BIC and IBAN  Payment Services Directive  SEPA schemes  SEPA Credit Transfer  SEPA Direct Debit  SEPA Cards framework

© Experian Limited All rights reserved. International Bank Account Numbers GB 12 NWBK Country code Check digit Bank Bank Code and Account number International framework (ISO 13616) - Country of origin - Integrity check Standard format Goal of increased efficiency through consistency

© Experian Limited All rights reserved. Bank Identifier Codes (BICs) DEUTDEFF500 Deutsche Bank Germany Frankfurt Branch Used to route payments Issued by SWIFT - Not every branch has its own BIC - Not every BIC is linked to the SWIFT network - Linked to National ID codes BIC directories required for bank look up

© Experian Limited All rights reserved. The problem with IBANs Take an IBAN DE IBAN passes integrity check -Meets rules for German IBANs … convert to German domestic account: Bank is valid – ABN Amro in Köln -Modulus check has failed -Invalid account number

© Experian Limited All rights reserved. Validation Requirements Need to separate good records from the bad records - Bank account number Rules and Logic - Modulus Rules - Account Transposition Rules - Built in Intelligence - Bank and branch data - BIC look up - BIC return against BBAN or IBAN

© Experian Limited All rights reserved. Differing views of the Payment Services Directive Banks Source: SAP, Finextra SEPA Survey Corporates Source: Bank of America Survey Have you studied the impact of the PSD on your business?

© Experian Limited All rights reserved. Treasury Management International Bank Survey – benefits of SEPA for corporates

© Experian Limited All rights reserved. Treasury Management International Bank Survey – potential disadvantages of SEPA for corporates

© Experian Limited All rights reserved. Treasury Management International Bank Survey – corporate readiness for SEPA

© Experian Limited All rights reserved. UK: Bringing Up The Rear? There are two ticks in some boxes because there are two services. The chart shows services, not systems – i.e. some systems may offer multiple services, both fast and “normal” or there may be 2 “competing” systems. 1 – dependent on time of submission Standalone RTGS Low Value Real timeSame daySame day or next day 1 Next dayLonger than next day Belgium  Denmark Finland France Germany Greece Italy Netherlands  Portugal Spain Sweden Switzerland UK Source: TowerGroup

© Experian Limited All rights reserved. Corporate Banks Typical treasury and accounts set up TMS Supplier Payments Bank Software Customer Billing International Payments Bank Bank Software Bank Dial-up Fixed Extranet Internet Manual

© Experian Limited All rights reserved. Banks SWIFT for the masses Corporate Single Payments Gateway SWIFTNet Bank specific link Bacs SWIFT Bureau Automated Bank TMS Supplier Payments Customer Billing International Payments

© Experian Limited All rights reserved. Conclusion  IBAN and BIC conversion and validation are essential for European payments  The Payment Services Directive applies to UK companies and affects sterling payments from 1 November 2009  Corporates have increased choice around who provides their payment services and how they are regulated  Organisations need to look at their banking relationships to see whether they have too many or too few banking partners.

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