German financial regulator Bafin said banks must ensure their technology systems and customers are ready to implement the new payments standard being introduced from Feb. 1.
While banks themselves are ready for the Single Euro Payments Area, information technology has yet to be adapted, and financial institutions aren’t sufficiently aware of their clients’ ability to make the switch on time, Bonn-based Bafin said in an e-mailed statement today. The regulator outlined the conclusions of a study conducted in July to assess the situation.
“Customers can already rely on their banks to make SEPA-payments now,” Bafin said. Since 93 percent of financial-services companies depend on external providers to execute payments, the onus is on them to make sure the technology can cope with potential disruptions and backlogs, it said.
Electronic payment transfers in euro, including the direct-debit type favored in Germany, will follow the common technical standard under new rules adopted by the 28 countries in the European Union as well as Iceland, Liechtenstein, Norway, Monaco and Switzerland.
German banks estimate that only one-third of corporate customers are prepared for the new standards, with small organizations especially lacking information, according to Bafin’s report. Less than 1 percent of direct debit transactions used the new standards at the time of the study, Bafin said.
The regulator surveyed all 1,783 financial-service providers in Germany.
German companies risk clogging payment transactions if they don’t adapt to new transfer standards on time, Bundesbank board member Carl-Ludwig Thiele said in an Aug. 14 interview.