TCO for SEPA: A Model

August 11, 2008


Milan, Italy 11 August 2008

The majority of European banks still strongly suspect that SEPA will negatively affect their revenue. This calls for a reference model that will identify and quantify the cost and revenue drivers of an institution across a five-year plan.

In a new report, , Celent examines the decision-making process of financial institutions regarding SEPA projects. Before looking at the macro figures of the economic impact of SEPA on the industry and financial markets, a financial institution must establish its level of interest and its economic rationale before embarking on a full-scale SEPA project.

There is general consensus that a real uptake to full-scale SEPA implementation will follow only after a clear definition of the migration deadlines from each of the 31 European Union countries involved. This responsibility falls on the shoulders of the EU regulators and local policymakers.

On the other side, banks and corporations will be better off by deciding on a strategy. If they want to reap the benefits of the incumbent payment schemes introduced by the SEPA rulebooks, they need to proactively approach the market with innovative products and services, the main targets being a larger share of business and new areas of influence.

"The value of the study consists in suggesting the foundation of a model that enables a single bank or corporation to assess and evaluate the cost/revenue profile of its own SEPA program," says Enrico Camerinelli, senior analyst with Celent's banking group and author of the report.

The report begins with an overview of the business background that justifies the need for such a model. It evaluates the current state and its limitations. The report goes on to describe a suggested end state. Finally, it highlights caveats and prescriptions.

The report is 60 pages long and contains 28 figures. A table of contents is available online.

Members of Celent's Corporate Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

Milan, Italy 11 August 2008

Executive Summary 3
The Business Case 5
Current State 11
What Does the End State Look Like? 13
SEPA TCO Cost Drivers 15
SEPA TCO Revenue Drivers 35
What Needs to Be Done? 40
Prescriptions/Caveats 49
Conclusions 51
Appendix 53
The EFTS Model 54


Sign in to download reports and access personalized information