Pioneering SEPA Migration at EDF
by Gilbert Labbe, President of the SEPA Commission, AFTE, and Head of the Treasury and Subsidiaries Financing Department, EDF, and Willem Dokkum, Global Head of Sales Payments & Cash Management, ING
Electricité de France (EDF) was an early adopter of SEPA Credit Transfers (SCT), having made the decision to migrate in 2008. This article explores EDF’s migration experiences, project outcomes and gives advice to corporates that are planning their migration.
The decision to migrate
The decision to migrate was not a difficult one for us at EDF, as we recognised the value of harmonisation and standardisation, and by reducing costs and streamlining processes, we could become more competitive. Furthermore, as President of the SEPA commission of the AFTE (French Association of Corporate Treasurers), I wanted EDF to be a pioneer for SEPA in France and set a good example.
Having explored the project in detail, we discovered that introducing SCT would not require substantial modifications to our business organisation or processes, and the costs of migration would be limited. In this respect we were fortunate, as our payments factory had been built to comply with SEPA. The payments factory had integrated SWIFT’s IBAN and BIC directory, so we could leverage this to convert RIB or BBAN data into IBAN and BIC in real time, and generate the XML file.
Without SEPA-compliant systems already in place, a company would need to upgrade its ERP or other internal systems to take advantage of new developments. It would also need to approach its bank for BIC and IBAN conversion, integrate the SWIFT IBAN and BIC directory, or work with an external vendor providing conversion services. However, even if the workload is greater than it was for us, the value can be immediate and substantial: for example, in our case, using SCT, 10,000 cross-border euro transfers each year now have the same conditions as for domestic transfers, with a major cost implication.
We took a phased approach to implementation, with all three phases now complete. We started with supplier and other third-party payments; secondly, we focused on employee payments, which are made through one bank, and director payments that are made through another; thirdly, we migrated expenses reimbursements. In total, this involved migrating 16 million credit transfers each year, with five different banks.