For this reason, they are demanding a broader range of products and services at more competitive prices through more efficient and convenient channels. Corporate customers have also become more performance-oriented and are demanding both competitively priced credit facilities and world-class financial advisory services. In this environment, the challenge is for banking institutions to anticipate and respond quickly to the differentiated demands and expectations of customers to sustain their competitive advantage. With growing customer expectations for continuous availability of services, the ability to continue to provide critical banking services at all times will also be crucial in the pursuit of building and maintaining their competitive edge. In conjunction with this, banking institutions must be able to quickly recover mission critical functions and assets during a major interruption to ensure efficient and reliable services to their customers. Technological advancement, which has increased the complexity of banking business and which has led to the emergence of increasingly innovative products and distribution channels, also presents opportunities for the banking sector. With ICT, financial services are being delivered to places and markets without requiring physical branch networks through a growing array of alternative delivery channels, including Internet, ATMs, and even mobile phones. The challenge to banking institutions is to effectively leverage on the opportunities offered by technology to innovate products and services aimed at attaining greater efficiency, reliability and competitiveness. While the efficiency of electronic means of doing banking is acknowledged, banking institutions should recognise the need for them to meet customer expectations for more personalised and quality services.

On several occasions, the Eurosystem has voiced its expectations regarding SEPA for cards. In particular, the card schemes should offer consumer choice, operate in competitive markets  2  “The economic impact of the Single Euro Payments Area”, by Heiko Schmiedel, ECB Occasional Paper No 71, August 2007. 3  Payment and securities settlement systems in the European Union, Blue Book, fourth edition. 4  “The Costs of Paying – Private and Social Costs of Cash and Card Payments”, Mats Bergman, Gabriela Guibourg and Björn Segendorf, Working Paper No 212, Sveriges Riksbank (September 2007). BIS Review 134/2007  3  and avoid geographical segmentation. In doing so, the Eurosystem expects that the SEPA for cards offers high efficiency and low prices derived from current best practices. In my view, a clear long term strategy of a SEPA for cards is not yet developed. The Eurosystem expects at least one new European card scheme which can compete with the international schemes in the SEPA environment. I’ll address this issue more in depth in the following panel. What I would like to stress, however, is that the Eurosystem welcomes the progress that has been made towards standardisation for cards, which, when implemented, will lead to the creation of a European market for terminals and for cards acquiring. The Eurosystem also welcomes the efforts of the international card schemes in preparing for SEPA and the SEPA changes they have already announced.