As part of the rollout of the sector wide initiative to introduce a new payments infrastructure across the Nordics, Sweden was chosen as the first country in scope to send payments via the new P27 payments platform. In order to prepare for the go-live, banks will need to migrate their customers from existing Bankgiro services to their own offerings.
Whilst Swedish bank’s personal customers will experience a very limited impact initially, their corporate customers will be impacted by the roll-out of the P27 service for classic batch payments in SEK (processing multiple payments from one bank account at the same time) which has a sector wide P27 target of Q3 2023.
At Nordea, the process of helping companies migrate from Bankgirot to Nordea’s own services is already taking place and will continue throughout 2022. Nordea’s goal for completing the migration is set for the end of Q1 2023. This involves replacing current Bankgiro services such as Leverantörsbetalningar (Supplier payments), BG Lön (Salary payments) and BG Inbetalningar (Incoming domestic payments) with Nordea’s P27 compliant Corporate Access service for corporates and Nordea’s Corporate Access Lite for SMEs, providing XML based corporate services for companies and organisations of all sizes.
Once P27 is up and running in Sweden and all companies have migrated from Bankgirot, the services currently offered via Bankgirot will no longer continue.
Tomas L Jonsson, Payments Product Management at Nordea, says: “Nordea’s aim is to prepare companies in good time to be ready before P27 goes live with the SEK Batch payments. We are no longer offering our customers Bankgiro services. Instead we are connecting them to our new future proof services. Last year we began migrating selected companies and this year we are moving into a larger scale and ramping up the service upgrades.”
Camilla Bäck, Senior Business Developer at Nordea, adds: “Our strategy is to make sure our customers are prepared well in advance before the actual Swedish sectoral transformation plan kicks in. By moving slightly ahead of the sectoral transformation plan we are hoping to bring the benefits of our future proof services to our customers now as well as create more time for the implementation phases ahead. We have agreed in the sector that Bankgirot will be closed in a few years’ time and we are replacing it with a new infrastructure. This means that all banks will need to offer their own services to their customers as the Bankgiro services will be decommissioned.”
The process for migrating companies and organisations to new services is largely dependent on the size and complexity of their operations. Once companies are contacted by their bank, they are guided through the services that best meet their needs. New agreements are created or existing ones updated, followed by a testing procedure dependent on the services used to make sure that everything works according to plan.
Rita Mustonen, P27 Project Management at Nordea, says: “Our ambition is to contact each and every customer that is in scope of the migration. We discuss P27 and its implications and tell them about our offerings. There are a variety of options depending on, for example, the size of the customer. Often they have to go back to their ERP vendor to find out if the ERP system they are using is ready. For larger customers, we make a joint migration plan. We can have a mother company and multiple subsidiaries with different service portfolios, so the migration journey can be quite complex and time consuming.”
Camilla adds: “Once we verify that everything is up and running, we close the Bankgiro service for the company in question. For smaller companies, enrolment to new services takes place via a digital procedure using a web form. In the majority of cases, customers will need to make a new agreement. This is not like a standard technical migration where changes take place in the background and the customer doesn’t notice anything. They need to be involved in the process.”
Tomas says: “Many companies need to know that they need to upgrade the services they use and take the needed actions on their side. In Nordea today we have quite a lot of customers that are already using Nordea services instead of Bankgirot. So if our customers are already running Nordea’s future proofed services (compliant with the new infrastructure), they are not impacted by this process.”
We have agreed in the sector that Bankgirot will be closed in a few years’ time and we are replacing it with a new infrastructure. This means that all banks will need to offer their own services to their customers as the Bankgiro services will be decommissioned.
Keeping ERP vendors informed
For many companies migrating from Bankgirot, their ERP vendors play an important role in making sure they are ready to make the switch to the new payments services.
Daniel Lindström, Liquidity Mgt & Corporate Channels at Nordea, says: “An interesting aspect we are seeing with P27 is the sectoral collaboration amongst the banks. We are making a very concerted effort in approaching the ERP market in Sweden collaboratively with the other banks. There is an acknowledgment amongst the banks of the ERP vendors importance for our customers and subsequently as banks we are coming with a common message out to the ERP market. We are trying to align and offer ERP vendors solutions that are very similar and that can bring these benefits to their customers together. This has sometimes been a very fragmented process before but now this is something that all of the banks are approaching together.”
“ERP vendors are definitely key players in this process. The ERP system is the place where companies begin their payment and reconciliation processes and we need to support that in the way we are doing now,” adds Daniel.
Many benefits to come
Companies moving to Nordea’s services during 2022, will already experience some benefits of using the bank’s modern standardised services. The full range of benefits from moving to the P27 platform will begin to be felt in a step wise process from the end of 2023 onwards as more elements of the new payments infrastructure begin to go live.
Daniel says: “One result of our current efforts will be to bring our advanced services, formerly only targeting large customers, to a wider range of customer segments. This means that more companies will be able to benefit from these future proof competent services that we will then offer customers instead of the local Swedish products and payment services that have been used before. This can be especially beneficial for companies operating in several countries.”
Camilla adds: “In general Nordea’s services have some advantages over the existing Bankgirot services so companies will notice some benefits right away. Customers will experience further benefits once we connect to P27 later on. It’s a kind of two-step approach. First, we need to migrate customers to the service Nordea offers and when Nordea connects and sends all the payments to P27, we will then bring even more value to these customers. P27 will bring new cut-off times and faster payments between the banks, including hourly cycles for batch payments. Depending on the particular bank’s offering, payments could end up on the beneficiary account already within an hour during business days.”
Daniel continues: “This will streamline the company’s accounts payables and accounts receivables processes. Thereby freeing up time for companies to actually spend on the important things for them.”
Christian Pehrson, Senior Cash Management Consultant at Nordea, says: “As we move into a new infrastructure for payments that is harmonised with the rest of Europe and based on a common set of standards than we are having locally in the Nordics today, things will be easier for companies thanks to the standardisation of payment types.”
As we move into a new infrastructure for payments that is harmonised with the rest of Europe and based on a common set of standards than we are having locally in the Nordics today, things will be easier for companies thanks to the standardisation of payment types.
For now, the implementation of P27 is beginning to gather speed across the Nordics. As the first country selected for the roll out, Sweden is undergoing a huge transformation. The sectoral plan is to finalise this migration to P27 in Sweden before repeating the process in the other countries.
Tomas says: “The full implementation of P27 is guided by a common bank transformation plan. This involves a quite extensive delivery plan around how banks can be connected to the new infrastructure, a full testing phase and finally a staged go-live where payments can be sent. Following that we have a transformation plan that says how banks are allowed to start sending payments as we will not all be sending payments on day one.”
Camilla adds: “If we have successfully navigated the migration of our customers to Nordea’s services this year, then they won’t have to do anything extra to gain the full benefits of P27 later.”
Christian concludes: “We were already moving into the new world towards our customers before P27 with the introduction of ISO standards and initiatives to implement more aligned processes. In the future, we won’t have so many payment types and we will benefit by moving away from a fragmented localised set up. Later on, once when we begin to use the new P27 infrastructure for more than one currency, this will bring quite some benefits for both companies and consumers, particularly in relation to cross-border payments. Bank customers will experience a much more efficient process for sending, receiving and reconciling payments. We are working hard to make sure that tomorrow the Nordics will have a smoother standardised infrastructure for payments than we have today.”
For more information on P27 at Nordea please write to Rita at rita.mustonen [at] nordea.com.