Bank of England Seeks Vendor to Migrate Core Transaction Settlement System
The Bank of England is making a big bet on modernisation, by announcing plans to replace the 23-year-old system it uses to settle payments between banks with a one-off migration by the end of 2025.
The BoE is planning to migrate its Real Time Gross Settlement (RTGS) system, which settles payments made on payment systems including the Clearing House Automated Payments System (CHAPS) and Bankers’ Automated Clearing Services (BACs). It has been in use since 1996 and is crucial in ensuring money flows in the economy. On average, the system settles £600billion worth of transactions daily.
This month, the bank published a contract notice in the Official Journal of the European Union inviting potential providers to express their interest. A Technology Delivery Partner will be announced in May 2020, and the contract is currently for a maximum cost of £150m and includes technology and support.
The project will be executed over the next six years and will culminate in a massive migration between systems. The goal, beyond purely modernising the system, is allowing access to it for more financial entities and making it available 24 hours a day.
The RTGS system has been receiving incremental upgrades over the years, but with this switchover, the Bank of England hopes to achieve broader access, wider interoperability, improved user functionality and strengthened end-to-end risk management, all in one project.
In the wake of PSD2 and the rise of open banking in the UK, the new settlement system will be accessible to non-bank companies, following a policy change made by the BoE in May 2017.
broader access, wider interoperability, improved user functionality and strengthened end-to-end risk management.