On 22 November 2021, Victoria Cleland, Executive Director for Banking at the Bank of England (BoE) gave a speech at the Central Banks Payments Conference.
The speech discusses how central banks and the private sector will work together to improve cost, speed, transparency and access to cross-border payments. Mrs Cleland also explains how the BoE upgrade to its real–time gross settlement (RTGS) payments system will help.
Key points in the speech include:
- Many cross-border payments continue to suffer from long-standing challenges of high costs, low speed, limited access and insufficient transparency. These challenges can particularly impact remittances.
- The frictions underlying cross-border payments are multi-dimensional, meaning solutions must be developed holistically across the whole payments ecosystem, including issues such as data and messaging standards.
- A roadmap to enhance cross-border payments was published by the Financial Stability Board (FSB) in October 2020. But making the roadmap a reality will require concerted effort and shared expertise from the public and the private sector. The FSB published a report on 13 October 2021 setting out the actions undertaken so far.
- A crucial part of this year’s work has been the establishment in October, following a public consultation, of quantitative global targets to define the ambition of the roadmap and to gain focus and momentum. The targets have been endorsed by the G20 who reconfirmed their commitment to enhancing cross-border payments when they met last month.
- The BoE’s multi-year programme to renew its RTGS service will help to enhance cross-border payments.
- The first major milestone of the programme will be to move to ISO 20022 messaging on a like-for-like basis in June 2022, followed by enhanced ISO 20022 in February 2023.
- The launch of the new platform in late 2023 will be the beginning of the continuous evolution of the service. The BoE will consult industry in early 2022 on a range of proposals for enhanced functionality that will enable market participants to offer faster, cheaper and more efficient payment services.
- In April the BoE announced a new policy to enable payment systems to open omnibus accounts in RTGS. The BoE expects this to extend the benefits of settling in risk-free central bank money to a wider range of payment systems. This will allow the industry to develop innovative high-value payment services, whilst having the security of central bank money settlement.