The UK’s payment systems (including retail payment systems such as Faster Payments and Bacs, and the high value system – CHAPS) connect payment service providers (PSPs) together, as a means of moving money between them. It is therefore vital that the organisations that manage the payment systems dedicate a lot of time to enhancing operational resilience and cyber security. And innovations, including instant payments, will also benefit from a resilient foundation. The Bank’s operation of RTGS, and more recently CHAPS, makes a vital contribution to our overarching mission of maintaining monetary and financial stability. CHAPS is the UK’s high value payment system and settles an average of £ billion each working day, representing 93% of non-cash payments in the UK by 1  https://www.assetnews.com/fintech/europe-trumps-asia-fintech-funding-q2-2019 https://www.ukfinance.org.uk/sites/default/files/uploads/pdf/UK-Finance-UK-Payment-Markets-Report-2019-SUMMARY.pdf https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/payments-a-platform-for-innovation-speech-by-victoriacleland.pdf?la=en&hash=5841227A82F5C75B75FFE32027EEF5EDA61D2C70 4 https://www.bankofengland.co.uk/report/2019/future-of-finance 5 https://www.fca.org.uk/publication/research/technology-cyber-resilience-questionnaire-cross-sector-report.pdf 6 https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/discussion-paper/2018/dp118.pdf 2 3  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  value. RTGS is the infrastructure where the key UK payments systems – including CHAPS – ultimately settle, supporting stability across the broader financial system. The area of the Bank that I lead (Banking, Payments and Innovation) has provided real-time settlement through our RTGS infrastructure since 1996. In 2017, as part of our vision to enhance stability, we took the step of bringing the management and operation of CHAPS into the Bank (until then the CHAPS payment scheme was operated by a private sector company – CHAPS Co). The Bank understood and mitigated the risks within RTGS, and CHAPS Co looked at risks in its participants.

We are also focused on how as operator of CHAPS the Bank can support UK-wide efforts to tackle economic crime. The recently published UK Economic Crime Plan12 noted the role that the Bank can play in this regard, including by enabling enhanced payment data through the development of interoperable message standards and by promoting wider adoption of Legal Entity Identifiers. These initiatives will help to promote greater transparency in ownership of legal entities and support detection of financial crime. Minimising impact of incidents  Resilience is key to payments, and we need to be ready to respond to the unexpected. That is why we have not stopped at prevention. We are also proactively thinking about how to respond when incidents occur; how to reduce the impact and any spill-overs to the wider ecosystem; and of course how we can recover quickly (for FMIs this means within two hours under most scenarios as set out in CPMI guidance). Furthermore, like other systemically important systems, we are preparing to meet the Bank’s forthcoming operational resilience policy that will apply equally to the Bank as the operator of CHAPS as it does to payment systems recognised for statutory supervision. Our mandate for promoting the stability of the UK’s financial system means we are not only interested in the resilience of CHAPS, but also the settlement of all payments critical to the economy. In an increasingly fastmoving financial system, being able to guarantee that critical payments settle on the same day is crucial.