Anjar Priandoyo’s Reviews > The Future of Finance after SEPA > Status Update

The prehistory of SEPA stems back to the early 1970’s. In 1971, the Bretton Woods Accord began to collapse. The Accord was the basis for fixing the relationship between foreign exchange rates and the price of gold. This collapse created the basis for today’s foreign exchange and money markets.

Money Laundering:
1. Placement: physically placing bulk cash proceeds;
2. Layering: separating the proceeds from their criminal origins through layers of complex financial transactions; and
3. Integration: providing an apparently legitimate explanation for the illicit proceeds.

ABN Amro cost of compliance is $40b/year

Good explanation, whether payment is cost centre or revenue generator

The need of controversial topics:
Who will be winners in the post-SEPA world? The banks that provide outsourced payments processing services, or the banks that use those services?

Interesting that Nordic get higher rate of technology adoption due to geographical (think Nokia Ericsson Mobile GSM)

SEPA and the Single Payments Area make absolute sense when you realise that Europe spends around EUR 160 billion a year on payments, and inefficiencies in the process costs anything up to 2% of our GDP

At least 24% of banking revenues and 34% of the banking cost and 9% of the profits are related to payments McKinsey 2005 also clarified that there are structural differences in the revenue models and for the instrument mix in the euro area.

Finally, SEPA does have major implications on bank technologies covering: the changes to accommodate IBAN and BIC;
1. changes to interfaces with all bank infrastructures as they move from national to pan- European schemes;
2. the implementation of new standards, such as ISO20022; and
3. the rethinking of products as they move from national operations with national legal processes, to European operations processes.

‘Money transmissions is the heart and core of banking’
'a payment is a payment is a payment, it’s a commodity'