EU Regulation 2560/2001 was introduced in July 2003 with the aim of bringing the cost of cross-border euro payments in line with that of domestic payments. In response, the European Payments Council's Inter-bank Convention on Payments (ICP) established a set of criteria stipulating how payments should be formatted for STP. Many banks have responded by imposing inter-bank charges, of varying amounts invoiced at variable times, which ultimately end up being claimed from customers for payments that do not meet these criteria.
John Watkins at ED&F Man, said, "As a result of changes in the European payments landscape, such as new International Bank Account Number requirements and the potential for SEPA non compliant fees to be levied, we have modified our systems and processes. We have also worked to create a more disciplined approach to payment formats and work very hard to analyze and correct any non-compliant payment formatting. JPMorgan's approach in providing advice on the financial and formatting impacts of these new regulations has helped us see real benefits in overall STP."
To help customers meet the demands of EU Regulation 2560/2001, JPMorgan developed a customised global communications programme, which provides tailored customer communications and dedicated customer service.
JPMorgan customers now have access to a wide range of information to help them maximise their compliant payments. This information includes formatting guides, reactive reporting which clearly outlines the reasons for payment non-compliance, and personalised advice on modifying processes and systems to mitigate charges.
Steve Groppi, business executive for JPMorgan Treasury Services in Europe, the Middle East, Africa and Asia, said, "Multiple standards make the European payments space highly complex. Our ability to help deliver improved STP rates to our clients is a reflection of the strength of our artificial intelligence technology, our global knowledge and our partnership approach with customers."
JPMorgan is the number-one non-indigenous provider of euro clearing to customers globally. Among the dynamic management processes that JPMorgan employs is artificial intelligence, which recognises formatting errors and automatically repairs to ensure that future similar payments will be processed with STP. In addition, JPMorgan continues to focus on working at an industry level to define a common set of standards for payments that do not fall within EU Regulation 2560/2001.