Single European Payments Area (Sepa) "fatigue" is starting to emerge across the financial services community, says a report from analyst IDC.
This is leading to the increasing risk of "procrastination" when it comes to financial firms' Sepa compliance efforts, said the analyst.
In the report, sponsored by Informatica and Atos Origin, banks are warned that "unless they are innovative and seek to provide value-added services to customers that use the Sepa infrastructure, they will fail to generate a return on their investment".
The first stage of Sepa went live this January, but European banks must still comply with the Payment Services Directive and Sepa Direct Debits (SDDs).
One of the biggest challenges faced is dealing with a complex system of "disparate parts" across multiple formats, which is not scalable as the industry becomes increasingly globalised, said IDC.
Banks, therefore, need to strike a balance between spending less on processes but at the same time enhancing them. A key enabler to achieving this objective is the effective management of the data that sits across these platforms, says the report.
Rachel Hunt, an analyst at IDC, said, "With all the regulation that banks have had to comply with over the past ten years it is not surprising that we are seeing the emergence of Sepa fatigue, especially among the middle tier banks which have fewer resources available to adapt their systems to the required changes".
She said, "It is imperative that the harmonisation of payment systems across Europe is seen as a long-term investment that can be used as a platform to generate future revenue.
"For example, centralising payment flows will result in more transparency into customer transactions, which in turn will enable new opportunities to be identified. In order to make this a reality banks must effectively address data challenges. If they cannot, then their Sepa compliance efforts will be akin to building a two-legged stool".
The European Commission is currently working on standards for mobile banking as well as the common European Electronic Invoicing (EEI) framework, offering banks a long-term strategy for generating return on investment.
It will be those banks that establish best practices for data integration and data quality across multiple sources that will be best placed to take commercial advantage of these developments, says the report.