IBS Journal April 2015
Pan-European instant payments infrastructure mooted
Hence, the taskforce will deliver requirements and specifi- cations around the core elements of the infrastructure, with emphasis on a layered approach as outlined by the ECB’s pro- posals (with a ‘scheme’ layer for end-users, a clearing layer, and a settlement layer). There will be consideration for process- ing models and messaging formats (ISO 20022 is the preferred option here given it is already part of the SEPA infrastructure), and it will scope out the required protocol to execute instant payments, as well as defining the areas for collaborative solu- tions. This will also be backed up by a gap analysis and design phase which will identify possible building blocks for instant payment services already in existence; identify and recom- mend solutions for further consideration; and then provide a suggested roadmap for implementation within the 2016-18 window. Finally, EBA Clearing’s board will assess the implementa- tion options and determine a process for procuring a servic- es provider, engage in dialogue with similar initiatives around the globe, and address the legal, regulatory and governance aspects.
One of the main points of the ECB’s initial working paper is to prevent the fragmentation of the market and ensure a siloed
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structure does not emerge. The Nordic countries have been active on the instant payment front already, with Finland in advanced discussions around a solution partner to build a new instant payment service, and Denmark having recently gone live with a new platform operated by outsourcing provider, Nets. Norway is thought to be weighing up plans to follow suit, whilst the UK has a long-established national instant payments infrastructure. Hence, suggests Kulk, the time to develop a pan-European solution is sooner rather than later. ‘It is certainly an important goal of the ECB (endorsed by the ERPB) that frag- mentation should be avoided as much as possible,’ he states. Kulk feels that from a technical point of view, the under-
lying technology and capability required to operate such a system is available on the market. Where the challenge lies is implementing this in a cross-border model. Annick Moes, head of communications at EBA Clearing, emphasises that this is where EBA Clearing’s strength lies, having operated cross-bor- der payment infrastructures such as the Euro1 pan-European high-value payments system and the Step2 automated clear- ing house (ACH) for over 15 years. ‘We have a clear legacy and history of making infrastructure solutions work at a pan-Euro- pean level, and orchestrating the necessary buy-in and reach that will need to be achieved,’ she says.
Incore Bank and Sungard team up to offer ‘one stop shop’ for private banks
Switzerland-based Incore Bank has teamed up with Sungard and its private banking software business to launch a full business process outsourcing (BPO) ser- vice to banks in Switzerland and Lichten- stein. Whilst this is not a new type of ser- vice in the market (Avaloq, for instance, has been doing this for many years via its B-Source subsidiary), the latest offering is end-to-end, i.e. it includes front-end capabilities, such as tools for relationship management, says Daniel Bardini, COO of private banking at Sungard. Sungard pro- vides its software – Ambit Private Banking (formerly Apsys) – and expertise in hosted solutions. The vendor provides this service to around ten banks in Switzerland, which constitute a fifth of its total core bank- ing software client base in the country.
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Furthermore, Incore Bank is a transaction bank that deals only with other banks, and offers custodial and brokerage services, ‘which is a major advantage for a bank that can have just one contract with Incore and let it deal with all the relevant custodi- ans and other parties’, comments Bardini. Incore brings its ‘BPO transaction
expertise’ to the table, he adds, which is not Sungard’s strong area. ‘We decided to find it elsewhere rather than build up the expertise in-house,’ he explains. The bank currently has around seven banks as its BPO customers. Incore uses core banking software
from Sungard’s local rival, Finnova, which it signed for in 2011 and put into produc- tion at the start of 2012. There are no plans to replace the current solution with Ambit
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or move the existing users to the new plat- form, says Bardini. ‘This is a new service for new takers.’ The partnership between Sungard and Incore was finalised last year and the search for first takers is underway. Bardini indicates that a number of con- tract negotiations are now taking place. Although no target figures are being
disclosed, the vendor sees a lot of poten- tial in this partnership. Private banking in Switzerland is undergoing a massive change in the aftermath of the financial crisis and in light of upcoming new reg- ulations and tax regime changes, notes Bardini. Revenues are decreasing drasti- cally, in some cases by 50 per cent, so the banks have to adapt their operations and costs, which means opening up to BPO, he says.
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