European Union banks said they were pleased with the 12-nation conversion to the new euro currency last week. But experts suggested that the real test remains ahead for accounting applications, databases, spreadsheets and other business systems.
The long-anticipated currency swap in 12 of the 15 member nations of the European Union began Jan. 1. Despite years of planning, the scale of the final switch to a single currency stressed the IT systems behind the conversion.
Europay International in Waterloo, Belgium, the leading European electronic-payments group, said automated teller machines and debit card withdrawals hit record levels in the first 24 hours after the euro’s release.
Electronic authorizations by Europay were up 30 per cent over the same period last year; two-thirds of those transactions were ATM withdrawals. Some ATM systems ran out of money. And in Austria, 2,600 ATMs shut down for an hour due to a system overload.
But, said Europay spokeswoman Cheryllyn Humphreys, “When you consider the scale of the changeover, this has gone remarkably well.”
Longer lines at cash registers due to slow and cumbersome point-of-sale conversion issues were just the first sign of IT hiccups in the retail sector.
Noel Hepworth, euro project director for the European Federation of Accountants, an industry trade group in Brussels, said almost one-third of euro-zone businesses have yet to modify accounting and payroll systems for the new currency.
“A euro-zone company has to be able to draw up their payroll in euros for the month of January,” said Hepworth. “If they’ve not converted their payroll systems, you must do it manually. Can you imagine doing your payroll manually?”
The true test of IT preparations will come in the next few months, according to Nick Allen, an analyst at AMR Research Inc.’s London office. He said software will be tested in the next three months as businesses begin making out financial reports.
“The biggest risk in information systems is data pollution. I think that a good proportion of companies will have some degree of data pollution because it’s so difficult to make sure everything you own has been converted correctly,” Allen said.
Sarwar A. Kashmeri, CEO of ebizChronicle.com Inc. in New York, said the complexity of the problem can change from country to country. For example, the euro is measured in decimal points, which is a cause for concern in some places.
“Spain has never had a decimal point or fractions or cents. All of a sudden, all their cash registers have to be reporting [to back-end systems] and printing decimal points in cents,” Kashmeri said.
The first counterfeit euro note was also found last week – a 50-euro note.