The Bank of England (BoE) has unveiled a blueprint for a renewed real-time gross settlement (RTGS) service in the UK, as part of its efforts to improve the payment infrastructure in the country.

Currently, the RTGS settles about £500bn between banks, which is equal to the quarter of the UK’s annual GDP.

BoE has designed new RTGS service to meet demands of the changing structure of the financial system, in addition to building capacity to interface with new payment technologies and face evolving threats such as cyber-attacks.

The new generation of RTGS includes various features, including maintaining continuity of service and integrity of data across a range of possible situations such as cyber-attacks.

The bank is planning to finalise its framework to expand RTGS eligibility to non-bank payment service providers, in a bid to enhance financial stability and face competition in the payment market.

BoE will also integrate the approval regimes for new direct members of RTGS, as well as allows third-party aggregators to offer technical connectivity for smaller firms.

The new service will also include tools to allow participants to streamline their back offices. It is designed to interface with distributed ledger technology in future.

The renewed RTGS will hold capacity to operate round the clock during business days from the outset, in addition to providing short settlement windows at weekends.

BoE will launch an external facing application programming interface (API) to facilitate better access to RTGS data for participants.

Apart from operating the RTGS infrastructure, the BoE will also serve as operator for the UK’s high value payment system (HVPS) scheme, which is currently operated by CHAPS.

BoE banking, payments and financial resilience executive director Andrew Hauser said: “RTGS affects everybody across the country, so it is vital that this critical piece of national infrastructure keeps pace with a fast-changing payments landscape.

“This blueprint sets out a vision of a renewed RTGS service that will safeguard financial stability whilst enabling innovation.”

Image: The Bank of England building, London, UK. Photo: courtesy of Diliff/Wikimedia Commons.