Improving Processes through SEPA Direct Debit Migration
by Nevenka Šubelj, Financial Director, Petrol d.d.
As one of the largest billers in Slovenia, SEPA migration was a particularly significant project for Petrol d.d. due to the risk of damage to cash flow and customer relationships in the event of migration issues. A large proportion of incoming cash flows are through direct debits and it was therefore particularly important to ensure that the migration to SEPA Direct Debits (SDD) took place smoothly. In this article, Nevenka Šubelj, financial director, discusses the successful SEPA migration, but also emphasises how treasury has leveraged the opportunity that SEPA migration presents to improve process efficiency and enhance customer service.
An efficient approach to direct debits
Before the introduction of SEPA, we had an efficient process for managing around 40,000 direct debits each month via Bankart, Slovenia’s clearing system. This direct debit solution was particularly convenient for customers as they could manage all their direct debits (such as those for electricity, gas, water etc.) centrally through their banking provider. From Petrol’s perspective, however, there were some limitations to this solution, specifically around the process of requesting direct debits. As customers could set up direct debit mandates with their banks, we received a large number of requests from banks to set up new direct debits. As the banks did not necessarily have an automated process for setting up the direct debit mandate and submitting it to Petrol, the number of duplicate and incorrect requests was high, creating a significant administrative overhead and potentially damaging customer relationships.
Some time before migrating to SEPA direct debits (SDD) therefore, we changed the direct debit set-up process so that customers no longer set up new mandates with their bank. Instead, they do so at Petrol points of sale. This has simplified and accelerated the process of setting up a new direct debit, reduced errors and duplications, and enabled us to provide customers with a higher quality of service to customers. Furthermore, this was an important pre-requisite to migrating to SDD as we already had a consistent process for setting up customer mandates and a central, reliable repository for customer information.
Embarking on SEPA migration
We started our SEPA migration in August 2012. While this was later than some organisations, we had to balance the need to migrate to SEPA with other business and IT priorities. We take a rigorously disciplined approach to appointing resources and managing projects professionally which allows us to conduct even large, complex projects quickly and efficiently. Consequently, we were able to complete the project in a timely manner and comply with the SDD migration deadlines. One of the first decisions was to appoint a partner bank to support SDD. We had an existing relationship with UniCredit that had given us a high degree of confidence in the bank. Furthermore, having compared UniCredit’s SDD offering with other contenders, we found it to be the most compelling and competitive proposition. In addition, we have appointed a Slovenian bank as our SDD partner for one of our smaller Petrol subsidiaries as it is important for us strategically that we do not rely exclusively on any single provider.
Addressing challenges, creating opportunities
With the central database already complete and up to date, and a best-practice approach to project delivery, the migration from legacy direct debits to SDD was relatively straightforward at Petrol. In this, we were greatly assisted by UniCredit who offered significant technical assistance and business advice.
We experienced two primary challenges as part of the migration. Firstly, with a very large number of direct debit mandates in place, it would have been challenging for many banks to manage the volume of transactions that Petrol requires. Consequently, it was essential that UniCredit had the processing capacity and technical resilience to deal with these volumes.