Business & finance

Share the stress of SEPA migration

In the run-up to Europe-wide SEPA implementation, many banks and corporates are looking to outsource their payments processing. Rainer Schamberger, managing director at Navensis, explains how companies can benefit financially from a partner that is equipped and willing to bear the burden of regulatory change.

As Europe continues down the path towards SEPA migration, banks and corporates alike are feeling the heat. While SEPA is expected to save the European economy some €50-100 billion a year, it comes at a significant upfront cost to the investor. Businesses are required to upgrade their payment strategies, develop new products and ensure all their services are compliant – no small task if you are a sizeable multinational with existing systems you don’t wish to uproot.

With the finalisation of the regulation in sight, the issue is becoming ever more pressing. This is particularly the case for corporates with EU-based subsidiaries. Faced with a perplexing array of communication protocols, file formats and security standards, many of them are entering consolidation mode. As SEPA is rolled out across the business, their goal is to streamline processes and centralise operations in-house.

“Many customers are building their own payment factory or aggregated in-house system to control all of their subsidiaries,” says Rainer Schamberger, managing director at Navensis, “but they need a strong partner to help them process the transactions.”

End-to-end services

Navensis is one such partner. A subsidiary of BAWAG PSK, Austria’s fourth largest bank, the company offers a comprehensive range of services, from mandate management to archiving to media transformations, both for domestic and international clients across Europe.

Navensis scans and archives two million documents per month, during which time it also verifies and interprets four million paper-based slips, and processes 20 million payment transactions. It has therefore come to be known as one of the key Austrian players in its field.

“In principle we focus on the Austrian market because our headquarters are here,” says Schamberger. “But we serve the whole CEE region, along with other European customers, and co-operate with partners such as Deutsche Bank. In fact, that partnership won us an STP Excellence Award.”

With a keen eye for customers’ requirements, Navensis provides a dual-layer overlay structure. While many multinationals struggle to reconcile local and company-wide needs, Navensis uses both domestic partners and a higher level of networked banks to provide the best of both worlds: economies of scale and optimal cash concentration, without severing longstanding local ties.

Acting as a central point of contact for the client, Navensis provides full payment visibility, allowing them to monitor their transactions within a single bank interface. “We offer end-to-end services through paper and electronic channels,” explains Schamberger. “For instance, we recently signed a contract with RBS. They have outsourced their Austrian payment operations to us and in return we offer them full data capture.”

Flexible formats

Where clients use paper, Navensis offers central scanning of vouchers, electronic delivery of these vouchers, data enrichment and full data capture. Where an electronic approach is required, Navensis is equipped to deliver in all common payment formats through various media channels. Either way, authorisation is fully verified and the customer is contacted in case of discrepancies.

Navensis also provides transformations between formats. There are many reasons why a company might wish to make the transition from paper to electronic or vice versa – not least saving time and cutting costs.

The company’s paper-to-electronic and electronic-to-paper services are tailored towards these needs, eliminating the need for physical documents and supplying cost-efficient paper solutions respectively.

Perhaps most importantly in light of SEPA is Navensis’ electronic-to-electronic transformation service. With technical standards in flux, existing formats frequently must be upgraded and this service allows companies to escape the cost trap of ever-escalating IT investments. It translates idiosyncratic in-house formats into standard varieties such as XML, all the while retaining the capacity to change them back.

Global and homogenous, XML is fundamental to the SEPA project. At present it is mandatory only for the exchange of SEPA payments between banks, but it comes highly recommended for corporate customers too. It was certified in 2005 by ISO 20022 and, catering for both credit transfers and direct debits, has been implemented in numerous systems across Europe.

This is not to say that its takeover has been seamless. One difficulty thus far has been the fact that XML data carriers have different country-specific requirements – countries have their own IBAN and BIC, and particular headers. Navensis has gone some way towards remedying this problem with a recent addition to its portfolio: a conversion service between the XML German and Austrian standards.

At the core of Navensis’ SEPA involvement is its mandate management service, which facilitates the transition to the new direct debit scheme while minimising disruption for the client. Navensis’ service is comprehensive, encompassing acquisition, printing and dispatch, along with individually adaptable, legally compliant forms.

Secure support systems

One final offering, grounded firmly in customer demand, is a secure archiving service for client information. In keeping with its multimedia scope, Navensis can archive both physical and electronic documents cost-effectively.

Paper documents are stored in extensive physical archive rooms that meet all legal and fire protection specifications. These documents are indexed after receipt, and will be professionally destroyed when the time comes – a process that is particularly crucial in the case of sensitive information. Meanwhile, they can be converted into electronic data through scanning. The electronic archiving service comes courtesy of Navensis’ efficient technical infrastructure, which is continuously adapted according to the latest developments.

With the tagline ‘Fast, friendly, focused’, this a company that designs its business practices around clients’ specific needs. Its customer care centre functions as a central contact point for information services, as well as expert and technical customer support. Enquiries are processed rapidly, technology is state-of-the-art, and staff know-how is guaranteed.

So where next for Navensis? As payment processing evolves, Navensis is responding with the provision of yet more services. “We have just announced the BAWAG PSK Finance Cockpit, which is a liquidity or cash management system,” states Schamberger. “It allows corporate customers to better steer their liquidity and plan their cash management. This is a system that we will be focusing on over the next few years, as well as the transformation service, making us well prepared for SEPA migration.”

Easing the transition

In the meantime, Schamberger is keen to underline the importance of keeping pace with upcoming transitions. The advantages of SEPA are widely billed to extend both to banks and to corporates, with the latter standing to make savings on transaction fees and both benefiting from heightened interoperability. Whatever the ultimate ramifications, however, it seems clear that any business will gain from being prepared.

Whereas at the moment only around 10% of credit transfer payments are in SEPA format, this figure is set to expand and adjusting for such growth ought to be a key concern. “We need to ensure that operations are standardised,” says Schamberger, “focusing, for example, on the new paper-based SEPA slips.”

Schamberger thinks that a legal mandate will help co-ordinate the changes. “There are no definitive deadlines as yet for SEPA migration,” he points out. “From my perspective, there needs to be an end date on the current regulation so that customers, in collaboration with us, have the incentive to change. Without this end date, there will be a four-month mismatch between customers.”

With its rich history in cashless payments as part of BAWAG PSK, Navensis is particularly well placed to deal with SEPA developments. Reliable, innovative and forward-thinking, the company acts as a trusted partner for corporates and banks, helping them navigate an ever-changing regulatory landscape and easing their concerns along the way.

This company profile appears in the Winter 2011 edition of Future Banking

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