The introduction of the SEPA Direct Debit Schemes (SDD) in November 2009 will create for the first time a common payment instrument for both domestic and cross-border collections in Euro across 27 EU member states as well as Iceland, Norway, Liechtenstein and Switzerland. With a direct impact on customers in areas such as public sector, telecom, utilities and insurance, SDD will usher in consolidation and centralization resulting in operational efficiencies and financial benefits for customers.
SEPA direct debit poses the following business and technological challenges to banks :
- Managing the transition from legacy schemes
- Managing new data elements in ISO20022 formats
- Providing true STP taking risk and compliance needs into account
A sophisticated and integrated IT system is a strategic requirement as it facilitates a single STP platform that can support legacy schemes during transition. Further, it ensures compliance with current core and B2B SDD schemes and helps future proof the bank with evolving additional optional services (AOS) around the schemes. In addition, a comprehensive solution needs to have the ability to manage mandates, provide flexible routing rules and automated exception (R-Transaction) management.
A strategic SDD platform should address the following properties in a focussed manner :
- Compliance to schemes/regulations as they evolve
- Innovative value added services
- Flexible routing using multiple PE-ACHs and support for bilateral clearing
Banks and their corporate customers may choose to adopt individual strategies to implement SDD. However, the common need for a best practice-based infrastructure and secure processes cannot be denied.
To know more about how TCS BaNCS can help you with your SEPA Direct Debit implementation, email us at firstname.lastname@example.org.