make and receive payments would cause great damage to the uk economy, so parliament and others rightly hold the bank and the wider bis central bankers ’ speeches financial community to the highest standards of stability. it is sometimes claimed that this relentless focus on stability makes central banks the enemies of innovation, and defenders of the status quo. i believe that is a fallacy. innovation and stability can go hand in hand, as some of the history of payment systems has shown. the innovation of meeting in the five bells every lunchtime reduced the risk that walk clerks would lose track of their notes and coins while trooping from one bank to another around the streets of the city of london. the move to a central ledger at the bank of england removed the need for notes and coins to be exchanged between banks at all. the advent of rtgs removed the risk that a bank would fail before it made a promised payment. more recent reforms have reduced liquidity risk in rtgs and extended access and hours of service. our challenge will be to navigate a path that redesigns rtgs in such a way that its resilience is further enhanced, while at the same time enabling innovation for the public good. thank you. figure 1 : customer account ledger from 1878, from the former bank of england cashier ’ s department drawing office, now held in the bank of england ’ s archive collection. references bank of england ( 1989 ), ‘ challenges facing the sterling wholesale payment systems ’, bank of england quarterly bulletin, august, pages 401 – 06. bank of england ( 1994 ), ‘ the development of a uk real - time gross settlement system ’. bank of england quarterly bulletin, may, pages 163 – 68. bis central bankers ’ speeches davey, n and gray, d ( 2014 ), ‘ how has the liquidity saving mechanism reduced banks ’ intraday liquidity costs in chaps? ’ bank of england quarterly bulletin, vol. 54, no. 2, pages 180 – 186, 2014 q2, available at http : / / www. bankofengland. co. uk / publications / documents / quarterlybulletin / 2014 / qb14q207. pdf. dent, a and dison, w ( 2012 ), ‘ the bank of england ’ s real - time gross settlement infrastructure ’, bank of england quarterly bulletin, vol. 52 no. 3, pages 234 – 244, 2012 q3, available at http : / / www. bankofengland. co.

fraud detection and product personalisation will increasingly rely on technology. many banks are already embracing these changes, but many non - bank players with ready - made access to a wide range of customers and their data are well positioned to compete. alongside the potential opportunities offered by changes in technology, there are also potential risks. for example, the demand for real - time retail payments can make it harder to implement effective defences against money laundering, terrorist financing, identity theft or other forms of fraud. more connected, it - intensive networks provide more channels for cyber attackers to target and greater risks of contagion. and rapid growth of non - bank payment providers could have profound implications for the business models of banks, challenging their revenue streams, altering the economics of credit provision and changing the risks to financial stability. the faster payments scheme launched in may 2008 and allows payments to be made 24 hours a day, seven days a week. further information on the one bank research initiative can be found here : http : / / www. bankofengland. co. uk / research / pages / onebank / agenda. aspx bis central bankers ’ speeches new payments technologies also pose practical challenges, such as ensuring they interface effectively with legacy it systems in banks and payments infrastructure. what does all of this mean for the future of rtgs? because of the changing context i have described, the bank of england has decided the scope of the blueprint should be broad. we need to understand these trends, whilst recognising that there is considerable room for debate about the impact of the current wave of technological innovation. we need to think about to whom we give access to the advantages of central bank money with its unique qualities of finality of settlement. trying to predict the future is a risky business, but when we make decisions about investment in systems that will last for a decade or more, they need to enable the kinds of changes that users will demand. so we need to make sure that we have “ optionality ” built in so that we can cope with different states of the world. we may conclude that the right way forward is a like - for - like replacement of the current rtgs using more modern technology. or we may decide that more radical change is needed to meet the needs of the uk ’ s future financial system. we genuinely do not have preconceptions on this question – and will want to consult closely with all of you, and a wide audience beyond this room, on the benefits, costs