Irish banks consider new business model for Synch payments app to avoid Central Bank approval process

WizardDr said:
I wonder why the banks would want to avoid a Central Bank approval process?
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For the reason mentioned in the article perhaps?
It is believed that the decision to explore different options was down to the onerous process that would be involved in securing Central Bank authorisation.
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WizardDr said:
I wonder why the banks would want to avoid a Central Bank approval process?

www.irishtimes.com

Banks behind Synch payments app looking at ways to avoid Central Bank authorisation process

Synch is backed by AIB, Bank of Ireland and Permanent TSB and was being designed as a mobile payments app to rival Revolut
www.irishtimes.com www.irishtimes.com
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Time to approve is one of the key reasons as is the effort required to go through this process end to end for all of the banks and to "sync"(no pun intended) their response between all of them. Potentially the background discussions with the CBI have also not filled the banks with confidence that they'd get approval
 
Beginning to sound like this crazy project may be in real trouble. Two and a half years down the line and nothing to show for their efforts. All published deadlines missed. And now having to say that the three remaining stakeholders "have issued letters of comfort that they will continue to fund the company and it will be in a position to continue to meet its obligations as they fall due for the period of at least 12 months from signing the financial statements.” and “Despite this fundamental change to the original business operating model, the directors consider the use of the going concern basis of accounting in the preparation of the financial statements as being appropriate” doesn't inspire a lot of confidence.

This was a daft idea at the outset, a fig leaf to cover the gross incompetence of the Irish Retail banks IT capabilities in the context of SEPA instant. Implementing SEPA instant would have made far more sense for the banks customers.
 
@Freelance I would agree with you on most of what you said. It isn't their IT capabilities so much as no compelling reason. It explains why the phenomenon of Revolut is an Irish thing and not a phenomena in most of Europe. Revolut went insane when they heard of Synch with a big objection to CCPC.

With the Central Bank of Ireland no-one in a financial institution will put the head above the parapet and be critical. 2 banks leaving and others not proceeding with approvals would be enough for an inquiry but here nobody says a word.
 
Freelance said:
Beginning to sound like this crazy project may be in real trouble. Two and a half years down the line and nothing to show for their efforts. All published deadlines missed. And now having to say that the three remaining stakeholders "have issued letters of comfort that they will continue to fund the company and it will be in a position to continue to meet its obligations as they fall due for the period of at least 12 months from signing the financial statements.” and “Despite this fundamental change to the original business operating model, the directors consider the use of the going concern basis of accounting in the preparation of the financial statements as being appropriate” doesn't inspire a lot of confidence.

This was a daft idea at the outset, a fig leaf to cover the gross incompetence of the Irish Retail banks IT capabilities in the context of SEPA instant. Implementing SEPA instant would have made far more sense for the banks customers.
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At this point it looks like implementing sepa instant would make more sense for the banks too.
 
ClubMan said:
But the horse is still stuck in the stable?
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Unfortunately for the banks in question the horse has well & truly bolted several years ago in the form of Revolut, N26, Wise etc.

Whatever they bring to market now is already several years late & probably several dollars short (I predict).
 
Freelance said:
Beginning to sound like this crazy project may be in real trouble. Two and a half years down the line and nothing to show for their efforts. All published deadlines missed. And now having to say that the three remaining stakeholders "have issued letters of comfort that they will continue to fund the company and it will be in a position to continue to meet its obligations as they fall due for the period of at least 12 months from signing the financial statements.” and “Despite this fundamental change to the original business operating model, the directors consider the use of the going concern basis of accounting in the preparation of the financial statements as being appropriate” doesn't inspire a lot of confidence.

This was a daft idea at the outset, a fig leaf to cover the gross incompetence of the Irish Retail banks IT capabilities in the context of SEPA instant. Implementing SEPA instant would have made far more sense for the banks customers.
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I don't think SEPA instant solves the Revolut problem for them. The big advantage of Revolut is not having to know someone's IBAN to send them money. I know all of my friend's numbers but I don't know their IBAN. If I owe them a few quid for something I can just Revolut it on to them. We had this a few years ago. I was on a stag and there was about 20 of us so we kept breaking into smaller groups for food and one person of the smaller groups would pay and the others would Revolut him what they owed... apart from the one guy who didn't have Revolut. He had to go to ATM machines or get the person's IBAN every time. Or I would pay for him and he would send it to me because he already had my IBAN. It was a complete pain for him. Anyways, a few days after we got back from the stag he set up a Revolut account. SEPA instant wouldn't have done anything for him there.

The problem they have and had is people started using Revolut for cheap exchange rates (especially here with us using UK internet retailers a lot) then people started using it for money transfers to friends. Then they started using it more and more and some started using it for their day to day banking. As Revolut start offering more services, it will start eating in to the legacy banks business here.

If they had made their apps decent, improved their IT infrastructure and brought in SEPA instant years ago, then they probably wouldn't be in this position. If they had reduced their exchange fees to compete with Revolut earlier on, then Revolut might not have even taken off here at all outside of people signing up to get the free referral money and never using it again.

I agree the app is stupid. We don't know much about it but if it is just for money transfers then what is the point. Why would any one download and use this new app when they could just use Revolut which everyone and their dog already uses.
 
Connard said:
I don't think SEPA instant solves the Revolut problem for them.
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It doesn't. And the converse would also appear to the true. Based on the information in the public domain, Synch does not look like it will resolve the SEPA Instant problem for them either.
 
I wonder are they avoiding sepa instant to not make it easy to transfer money to revolut?
 
The banks are working on SEPA instant but it is a huge undertaking. Its not like Irish banks are alone. Take up across Europe is still only around 50% with a lot of larger banks not offering if because it is a huge effort to integrate with legacy infrastructure.
This app is not meant to be a replacement for SEPA instant and SEPA instant is not a replacement for this type of app.
To be fair to the banks, they are trying to compete and took a brave step to work together and bring it outside their traditional infrastructure.
Also, have it on good authority that revolut are looking to get in on this App. If it ever happens.......
 
Hungary has an instant payments system called AFR with thirty-five (!) banks participating that allows for payments within five seconds. It works 24/7/365.

You don’t need even need to know someone’s IBAN as it can be linked to email address or phone number.
 
Sunny said:
The banks are working on SEPA instant but it is a huge undertaking. Its not like Irish banks are alone. Take up across Europe is still only around 50% with a lot of larger banks not offering if because it is a huge effort to integrate with legacy infrastructure.
This app is not meant to be a replacement for SEPA instant and SEPA instant is not a replacement for this type of app.
To be fair to the banks, they are trying to compete and took a brave step to work together and bring it outside their traditional infrastructure.
Also, have it on good authority that revolut are looking to get in on this App. If it ever happens.......
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I suppose we are talking about a country where IBAN usage causes loads of problems.....
 
I'm amazed that shareholders at each of the three banks haven't tackled the board members at the three Banks, over this...

Talk about a waste of shareholders precious resources...
 
MrEarl said:
I'm amazed that shareholders at each of the three banks haven't tackled the board members at the three Banks, over this...

Talk about a waste of shareholders precious resources...
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Why? Banks cant compete against revolut and other fintech using their usual channels and infrastructure. Simply not possible. They get criticised for that. They then set up their own version of a fintech company to fully embrace open banking and they get criticised for that. This isn't unique to Ireland. Other countries have done this.....
 
Sunny said:
Why? Banks cant compete against revolut and other fintech using their usual channels and infrastructure. Simply not possible. They get criticised for that. They then set up their own version of a fintech company to fully embrace open banking and they get criticised for that. This isn't unique to Ireland. Other countries have done this.....
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Why?

Because they are wasting millions trying to develop a bespoke system, that will restrict competition, given the three balls re restricting who can join the system, and initially only be available to retail customers.

SEPA Instant is already available, and the defacto European stand system, with well over a hundred European banks and financial services firms already using it. It could be delivered to the customers of the three Irish Banks faster, cheaper, and offer more capability than initially proposed by the Irish version.

That's why :)
 
Just thinking,

On the back of my post above...

Does the Irish Central Bank see the Irish proposition as anti-competitive, given they'll be restricting to it, and is that why it hasn't been CB approved?
 
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