It can help compliance and regulation, providing richer data that will make it easier for businesses to detect fraud and help target financial crime. It will improve resilience as it allows re-routing of messages which could reduce the impact of outages on users. It provides enriched data that will improve analytics, reconciliations and promote competition and innovation. It allows straight-through processing with less need for manual intervention. Realising these benefits relies on the quality of data submitted being sufficiently high and consistent. Therefore the Bank will mandate the sending of enhanced data in due course, starting with Purpose Codes and Legal Entity Identifiers (LEIs) within certain CHAPS messages from Spring 2024. We are also working closely with the industry in the development of best practice Market Guidance, unlocking the benefits arising from the implementation of ISO 20022 in specific use cases, through mapping existing industry conventions and identifying further opportunities where a standardised approach to submitting enhanced data can address specific pain points in the market. Collaboration to realise the Vision There is a collective endeavour to deliver the new RTGS service successfully. We need industry to be ready to transition safely to the new service and maximise the opportunities for innovation and transformation. As we now move into a phase of implementation it is important we turn industry voices into action to be ready for this transformational change. CHAPS Direct Participants (DPs)have a pivotal role in ensuring the success of both the transition to ISO 20022 and the wider RTGS Renewal programme.
Where innovation will flourish, changing customer demand will be supported and exceeded, and ultimately life-dreams enabled. It is up to each of us to help build the foundations that will allow this to take place. This transformation involves many new actors, alongside the traditional banks. There are growing numbers of challenger banks as well as innovative payments services, Payment Service Providers (PSPs), and increased interest from the world of FinTech. Indeed, payment businesses currently make up 17% of the UK’s c2500 FinTech companies. Global household ‘bigtech’ names such as Facebook and Amazon are also breaking into this market. These competitive pressures are pushing existing market participants to invest and think more intensively about what the future world of payments should look like. And due to the pivotal nature of payments, the public sector is actively involved too, seeking both to enhance and strengthen the existing infrastructure but also assessing whether there is a more fundamental approach to complement it. New forms of digital money could contribute to faster, cheaper, and more efficient payments and have financial inclusion as a prominent design consideration. As innovation develops further in this space, it will be important that regulation follows suit. Our Governor Andrew Bailey noted in his recent speech, that it is crucial the regulatory framework adapts to innovation in a way that fulfil the Bank’s core mission to promote the good of the people of the UK.