The Bank of England has published its Real Time Gross Settlement (RTGS) system and Clearing House Automated Payment System (CHAPS) annual report, which shows that the central bank's payments systems have remained resilient despite the depredations of COVID-19.
Although the payment systems have operated smoothly during the pandemic, the central bank has continued to see COVID-19 cause changes in the use of the RTGS and CHAPS services, the report shows.
RTGS payments are fund transfers allowing for instantaneous settlements between banks. Meanwhile, CHAPS is a sterling, same-day system that firms use to settle high-value wholesale payments, as well as time-critical, lower-value payments — for example, the purchase of a property or the payment of a deposit on one.
RTGS settles more than £700bn on an average day, with a new RTGS peak value day of £943bn set on September 14, 2020, according to the report.
Meanwhile, CHAPS saw a record value of £485bn on November 30, 2020.
However, the report shows that as values have continued to increase, owing largely to conditions in the financial market, volumes have been lower.
Volumes between March 2020 and February 2021 were around 10 percent lower than at that time in the previous year as a result of the knock-on effects of the pandemic.
Since then, however, these volumes have largely recovered. The report concludes that this is due primarily to the continuing economic recovery, as well as the use of CHAPS in the busy property market.
The central bank has also moved to the delivery phase of its RTGS Renewal Programme, the report notes.
This includes setting targets for ISO 20022 like-for-like for CHAPS payment messages in June 2022; ISO 20022 enhanced in February 2023; as well as a new core ledger for RTGS that is set to be introduced in Autumn 2023.
The bank’s major focus, looking ahead, is continuing to prepare for RTGS Renewal and to realise the benefits of increased resilience, widened access, greater innovation, increased interoperability and improved user functions for the financial system as a whole, the report summarises.
The Bank of England's RTGS system has spurred excitement in 2021 due to the adding of a new omnibus account, announced in April.
The introduction of omnibus accounts is expected to serve as a launchpad for the development of virtual currencies as a feasible alternative payment method.
However, the decision to open the omnibus account has also raised eyebrows on the continent. A senior official at Germany's Bundesbank said in May this year that the Eurosystem should proceed with caution if it is to use a similar model.