XMLdation: keys to success in SEPA – Juha Keski-Nisula

Earlier this year, the European Parliament passed a regulation to create a legally binding deadline for banks to migrate credit transfers and direct debits to the Single Euro Payment Area (SEPA) framework. Having signed up back in 2008, Europe's banks now have a deadline of February 2014 to become fully SEPA-compliant.

The deadline may seem a long way off, but a great deal of change must happen before then, and one of the key changes is that payment data must be provided in XML format, which is a big change from the legacy systems that are widely used. The shift is expected to help pan-European organisations make significant savings, but they must first put in place the infrastructure to hand SEPA formats, including IBAN account identifiers and the ISO 20022 open standards for payments messaging.

"Straight-through processing is possible through XML technology," says Juha Keski-Nisula, CEO of XMLdation. "I have been in this business area for 15 years and I've learnt that on the one hand it is a simple thing, on the other it is complex. We are seeing a lot more interest from banks in developing their processes and providing better quality, faster customer services."

User-friendly validation to migration

XMLdation Service is focused on the validation and simulation of SEPA and ISO 20022 XML payment-related files. XMLdation provides web-based, real-time services that speed up ISO 20022 XML migration projects. Its XML Validator and Simulator are part of its close cooperation with banks and integrators to create a user-friendly validation service to support migration projects.

"XMLdation can help to speed up XML testing processes by 90%."

"Our mission is to support the ongoing XML revolution between corporates and banks, and to support SEPA payments," says Keski-Nisula. "Our bank simulator can generate XML account statements and payment status reports. XMLdation can help to speed up XML testing processes by 90%.

"Take validation - most banks do manual checking, but we can speed up that process dramatically. One validation that might have taken two hours to produce the test result can be done in a second, in real time, with XMLdation Service. It will reduce the workload of banks' customer support, and the upcoming regulations are going to really push demand for the kind of services we offer."

XML - the time is now

Given the kind of simulation services available, it is perhaps surprising that banks have taken so long to embrace the shift to XML that will soon be forced on them.

"Banks are not taking advantage of the technology and solutions around XML," explains Keski-Nisula. "It can be compared to the Xbox 360. At first, people didn't know how to take advantage of all the capability it offered, but now the games use that capability to the maximum. XML is an end-to-end process that could support many innovative services from banks, but they are very much at the beginning of the learning and implementation process.

"Among corporates, the first movers are investing heavily in the implementation of XML because they see the benefits."

"Banks are always interested in reducing the cost of payments and they can make huge savings through using XML standards and gain a competitive edge. Last year, we saw the first European corporates getting the benefit of XML and banks could learn from them and start generating new services. Using one standard is much cheaper."

The move of corporates to XML makes it easier for them to add banks to their networks, so competition among banks will increase - there are signs that this is already happening.

"Banks have to move first," says Keski-Nisula. "We have the SEPA end date and every bank in Europe knows it. Among corporates, the first movers are investing heavily in the implementation of XML because they see the benefits. If banks don't move to XML they won't exist in the payments space.

"XML is a big issue, as is IBAN. For payments validation, banks and corporates need real automated tools. As new services like e-invoicing evolve, the situation becomes even more complex as there are more stakeholders and counterparties. Banks and corporates must start looking at XML and its implications right now."

Juha Keski-Nisula is CEO of XMLdation.