Bank of England announces rebuild of RTGS

27 Sep 2016 09:49 AM

The Bank of England has outlined its plans for a more accessible, resilient and interoperable real time settlement system.

The Bank of England has published a consultation paper, inviting comments on proposals for a comprehensive update of the UK’s real time gross settlement system (RTGS).

The RTGS is the central platform which performs fund transfers from one bank to another in UK sterling. Its reserves are the vault which provides monetary and financial stability in the UK with a stock of £300 billion in ‘cash’ which exists purely electronically. The RTGS has existed in its current form since 1996 and, as the system’s 20th birthday approached, the Bank recognised that it was due for modernisation in the light of the rapid and fundamental change now occurring in the payments market.

The consultation paper acknowledges that the capacity of the current RTGS to respond to change is limited: its current operation could impede innovation and competition and increase the risk of service quality diminishing within the near future. The aim of the revamp, according to Andrew Hauser, Executive Director for Banking, Payments and Financial Resilience is to keep the UK payments infrastructure at the leading edge globally whilst underscoring our commitment to maintaining stability and confidence

The attributes of a new-look RTGS should be five-fold:

Work on the new system is to begin in 2017, with a view to completion in 2020. Responses to the Bank’s consultation should be submitted by 7 November 2016. The Bank will also be holding industry briefings on 4 and 11 October - see BofE website for details.

The BofE specifically notes that a key priority for its work will be coordination with the other initiatives on payments, PSDII and open banking APIs. These are all issues techUK is working on in its financial services programme. For further information, please contact ruthmilligan@techuk.org