There have been many articles published about IBAN conversion lately, including Accuity's views and solutions featured on our Web site and in our Web seminars. The bottom line is that euro land is moving toward a Single Euro Payments Area (SEPA) and payments that cross national borders within this region will require an IBAN and a connected BIC. Corporates and banks alike need to start embracing it and getting ready.

So what's a corporation that has hundreds, thousands or even millions of records containing national bank routing data on its Bank Master to do? Pick up the phone and ask all these contacts for their IBAN details? Even if that number were just a few thousand, the time and expense to do so is far too great, especially when taking into account the chance for human error when manually entering these payment details into the system. To make the process more efficient and manageable, the first port of call is usually the partner bank.

A few of the leading banks in Europe have brought on third-party solutions, which convert national bank routing data and account numbers (i.e. BBANs) into IBANs, with some success. Banks are going this route because the process is complex; it involves gathering algorithms for conversion, maintaining large volumes of up-to-date data for validating that the converted IBAN is indeed correct and developing a software application to manage the whole process. There are also free conversion tools available on the Internet (though they are limited in functionality and accuracy and the costs one might incur to repair a badly-converted IBAN doesn't really get one that much further ahead...).

The take up by the corporations to convert to IBAN has been slow, mainly for two reasons — they either simply do not know about these conversion solutions or they have not been approached by their bank to begin the process.

But the need for BBAN-to-IBAN conversion does exist and it's not just treasury operations departments that see the value. Consider the HR department of a large corporation that has 50,000 or more employees all over Europe. Then think about the size of the internal marketing campaign that would be necessary to get all of those individuals to send in their correct IBANs and connected BICs. When one considers that routing these payments onto its partner bank's SEPA platform could save such an organization 30% on its transaction costs, the appeal of mass conversion becomes apparent.

To further advance the process, some banks are offering reduced fees for payment processing on their SEPA platforms. This is encouraging to see and should help to drive the market.