• Over 50% of treasurers surveyed have not yet commenced their transition to the Single Euro Payments Area (SEPA)
• 40% of treasurers have not yet decided which tool they will choose to replace the French Etebac, which will be obsolete by the end of 2011
• 35% plan to change their Treasury Management System (TMS) within 2 years, with particular focus on better coverage of front & back office transactions and cash flow forecasts

London, 23nd July 2009 – The first edition of the bfinance Corporate Treasury Survey polled the treasury departments of 63 French multinational companies revealing a backward step regarding SEPA compliance projects.  Over 50% of respondents indicated that they had not yet commenced preparations for the transition to SEPA and 40% had not even decided which new banking connectivity standard they would adopt upon the withdrawal of Etebac.

French companies, like their European counterparts, must deal with a number of challenges facing treasury departments over the next couple of years.  These challenges are expected to have a large impact on their TMS and encompass the following components.

• The progressive migration to SEPA, likely to run until 2012 or 2013 which includes:
• the new payment means (Sepa Credit Transfer – SCT, and Sepa Direct Debit – SDD);
• the new formats (among them, BIC/IBAN bank account details which replaces the French bank ID format “RIB”, and XML ISO 20022 for payment messages); and
• the new Payment Services Directive (PSD, called also SEPA Directive) to be enforced from 1st November, 2009.

• The planned withdrawal of Etebac[1], the French bank connectivity standard for payment messages, by November 2011.

The French companies polled seem to favour an integrated approach to address these upcoming issues.  They intend to bundle together into one project the adoption of the new SCT and SDD, the replacement of Etebac, and the changes required for compliance of their TMS and ERP with SEPA formats and the new banking connectivity tool.

Fifty-two percent of the respondents have not yet initiated their transition to SEPA and 75% have not yet implemented the SCT (SCT was launched in January 2008). One quarter has converted their bank ID database to the BIC/IBAN format, but almost 40% have not yet started.  Forty-three percent of the respondents have planned the transition to SEPA by the end of 2011, the remainder plan to do so later or have not yet decided upon the timeframe.

Muriel Nahmias, Global Head of Editorial & Research commented, “Surprisingly, we are seeing a delay in the process for the transition to SEPA. In a previous poll conducted in December 2008, more than half the respondents were planning to discontinue using the French format bank transfer in 2009 or 2010.  We can now see that there is a change in attitude with respondents preferring to have more information about the services which will be offered by banks and software vendors to replace Etebac. These projects affect their Treasury Management Systems so treasury departments prefer to combine the changes into one project. Respondents also indicated that this approach may make it easier to obtain budget for the IT spend, especially considering the SEPA project is viewed by a large majority of treasurers and managing directors as having dubious return on investment. “

Only 17% of the respondents admit that their treasury system is fully compliant with the SEPA file formats. While almost six out of ten treasurers have already decided to change their bank connectivity system before the end of 2011 when Etebac is stopped, 40% have not yet decided the solution they intend to choose to replace it. For those who have decided, SwiftNet and the German standard Ebics are equally popular choices with respondents indicating their preference of 31% versus 30% respectively.  Currently only 8% of the treasurers who responded use the SwiftNet interface.

Consequently, the treasury software market is expected to be dynamic over the next few years. Indeed, 38% of the French companies polled declare that they will change their TMS over the next three years whereas 24% say that this is likely. So far, SAGE (who bought the French leader XRT two years ago), REUTERS and KYRIBA are the top three software vendors who have 40% to 80% of market share depending on the functionality required[2].  French groups currently tend to use a number of software packages to cover all the Treasury activities with bank account management and bank connectivity being the two main functions covered by the TMS.

According to respondents, the overhaul of the TMS has to firstly address front office activity (according to 29% of treasurers), cash flow forecasts (25%) and debt management (17%). Treasurers say that the existing system tools are not as effective as they might be and that they are keen to see improvements in the new system. .

Finally, when asked what their top priorities are for their Treasury department, the respondents firstly named a larger and more efficient cash concentration, then the standardisation of processes followed by cash flow visibility. Electronic Invoice Presentment and Payment (EIPP) ranks only fourth.

About the Survey

A representative panel of 63 large French companies participated in the Survey conducted in June 2009: 63% have a turnover of more that €1bn and 37% have a turnover between €500m and €1bn. The role of the respondents is either CFO or Group treasurer and all sectors are represented. The «bfinance Corporate Treasury Survey» will be extended to German and Italian companies in the second edition, planned for December 2009.