EU Banks Not Ready for Faster-Payments Law
The cost of complying with the EU Payments Services Directive (PSD) could amount to €6bn over the next 18 months for 30 of the biggest international banks in Europe.
The EU PSD, approved in December 2007 and due to come into force in November 2009, is designed to simplify and clarify payments transactions and open them up to new market entrants across the Euro zone. One of the effects will be to speed up payments in the same way as the Faster Payments regulations already in force in the UK.
According to a report from analysts at PSE Consulting, from the responses of 30 leading international banking organisations, more than 50 per cent of the sample believe the cost to them of complying with PSD may reach €10m each. Just under one in 10 said it could exceed €100m.
Half of the banks surveyed said they had completed impact assessments on PSD but 85 per cent said no budget has yet been allocated for compliance costs. Just under a third are worried about their own organisation's IT systems' abilities to cope with the changes demanded by the directive. Two-thirds said they had not broached the subject with their IT suppliers.
In a statement, a spokesman for legal firm Sidley Austin said: "Implementation of the PSD is only 18 months away. Medium and smaller banks and non-banks must begin assessing its impact or many may not be ready by the deadline."