ECB SEPA Study Suggests New Revenue Sources for Banks
The European Central Bank’s (ECB’s) SEPA impact study has had its findings presented by Heiko Schmiedel, DG Payment Systems and Market Infrastructure at the ECB. Based on the quantitative and qualitative expectations of major pan-European banks, the study finds that the overall financial impact for the banking industry varies according to different scenarios of the SEPA project. From the study it emerges that in the short run, i.e. during the coexistence of ‘old’ schemes and SEPA, the banking industry expects SEPA to lead to initial investment costs and a relatively limited impact on the revenue side. In the long term, when national schemes have been fully replaced by SEPA, the costs for banks are expected to decrease because they could potentially also be affected by increased cross-border competition and by new market entrants. The findings of the study support the view that a dual SEPA implementation phase should be as short as possible. In fact, a longer migration period would give rise to higher costs than a shorter period. It seems that the impact on costs and revenues will be determined by the approach chosen by the banks. New and innovative products, new markets and new relationships could bring new sources of revenue for banks.