The renewed RTGS service – key benefits

From June 2024, the renewed RTGS service will deliver benefits across a number of areas. We will continue to enhance the service beyond 2024 to make sure it meets the changing needs of the industry.
Published on 25 April 2023

The Real-Time Gross Settlement (RTGS) service sits at the heart of all UK payments. RTGS is currently being renewed, with industry and for industry, to respond to the changing payments landscape. From June 2024, the renewed RTGS service will deliver a more resilient, flexible and innovative sterling settlement system to support monetary and financial stability. It will deliver benefits for industry across four key areas: increased resilience, greater access, wider interoperability and improved user functionality.

Roadmap for RTGS beyond 2024

The new core settlement engine will also provide a strong foundation on which to build further functionality. Beyond 2024, we will benefit from this flexibility to continuously evolve the service to make sure it meets the changing needs of the industry, in responding to immediate issues and in making strategic enhancements. The Bank is working closely with industry to assess business cases before deciding which features to implement beyond 2024 and in what order. Progressing the priority features would help achieve the benefits set out below.

Annex: Benefits of ISO 20022 to the wider payments industry

The global ISO 20022 payment messaging standard enables richer, more structured enhanced data. This enables benefits throughout the payments chain: from market institutions, to intermediaries, to payment system operators and finally on to end users, the key clients of the payments industry.

Figure 1: The benefits ISO 20022 could deliver for payments

  • Improvement in Straight Through Processing (STP)
    • Structured addresses reduce processing time and transaction costs and enable more efficient screening in sanctions and anti-money laundering processes, mitigating financial crime.
    • The global migration to ISO 20022 is improving harmonisation and interoperability, improving STP, contingency arrangements and choice of payment paths for customers. ISO 20022 is a priority of the G20 work to improve cross-border payments.
  • Accurate view of cash processes – unique references track a payment throughout its journey, enabling improvements in cash forecasting, liquidity management, and payment profiles.
  • Identification of critical payments – purpose codes can be used to identify critical and priority payments: from housing transactions to vulnerable customers.
  • Automated, more deeply informed remittance processes – richer structured remittance data enable improved automation of invoice reconciliations, exceptions handling, and remittance information.
  • Fraud – Legal Entity Identifiers (LEIs) and cross-validation with other ISO 20022 fields can more accurately identify potentially fraudulent payments. As a global identifier, the LEI is beneficial as a further verification in cross-border payments. Purpose codes may also help flag payment types that are at a higher risk of authorised push payment fraud, such as building maintenance.
  • Compliance and regulation – pass through of richer information allows the inclusion of country-specific information in a standardised format without the need for proprietary processes.
  • Enabling innovation – richer contextual and market intelligence data (eg purpose codes), a global identifier, and the analysis and application of structured remittance data all provide opportunities for innovating and creating better financial products and services for users.