GovernanceRegulationPSD2: the death of MT940s?

PSD2: the death of MT940s?

APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.

The end of European treasurers submitting daily MT940s may be near with the dawn of the revised Payment Services Directive (PSD2), due to be implemented next year.

Under PSD2 regulation, banks will be obligated to allow third parties to collect bank account data on behalf of treasurers (with permission), which is expected to be done via APIs.

“No one is offering [this service for free] today because the banks have effectively got a monopoly over this information,” James Higgins, product director at AccessPay, told GTNews at an AccessPay roundtable titled, ‘PSD2 and Open Banking. Big threat or big opportunity?’

“The banks are the only ones with the information, so they are able to charge for MT940 submissions. There was previously no incentive to break with that model.

“This should drive down costs for the corporate,” he explains.

Karen Fagan, ITV treasury operations manager, says she struggles to get the information required for MT940s from ITV’s German subsidiary as data protection laws are tighter in Germany than in the UK.

“Our German subsidiary can’t send us a MT940 because it includes personal data on their employees and vendors,” says Fagan.

“The banks can’t send us anything else. They can’t send us a MT941 either.

“Perhaps the solution is an API so that they can give us the account balances and nothing else,” she adds

The reason why this hasn’t been done so far is purely due to regulatory barriers, says Anish Kapoor, CEO of AccessPay.

However, it is likely that third-parties collecting MT940 data will not be delivered succinctly when the regulation first becomes effective in 2018, warns Higgins.

“We will see different information provided through different channels at first. It will be delivered in batch processes. I expect it will be a little bit mix and match for quite a while until [PSD2 regulation] settles down,” he says.

An MT940 is an end of day statement that corporates are required to send to their banks detailing all business bank accounts.

Related Articles

Infosys Finacle to power Santander UK’s international cash management system

More News Infosys Finacle to power Santander UK’s international cash management system

6m The Global Treasurer
Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

9m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

10m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

10m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

10m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

10m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

10m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

11m Tasja Botha