78th Report - The Bank of England’s Real-Time Gross Settlement Renewal Programme

The Bank developed strong business leadership for the RTGS transformation programme, drawing effectively on non-executive expertise. The programme’s initial governance was led by non-executive directors (NEDs) with a track record in digital payments and commercial expertise. Through the Bank’s board of directors (known as the ‘Court’), NEDs retained a clear view of the programme throughout, providing direction and support. The Senior Responsible Officer (SRO) for the programme had a background in payments operations, with specialist payment staff also brought on to the programme at an early stage. The SRO and the programme’s technical owner jointly held the final responsibility to decide when the new system was ready to go live. The mix of operational and technical leadership and skills on the programme meant that decisions were well informed. We also note the benefits of having stability of staff in senior roles, with the Bank also freeing up the SRO from some other responsibilities to ensure sufficient time to lead the programme.

The Bank invested time and effort up-front to identify clear scope and objectives for the new RTGS, engaging effectively with internal and external stakeholders. From 2016 to 2018, the Bank invested significant time and resources in planning, analysis and design, with a 2017 ‘blueprint’ setting out five key priorities for the new RTGS. The Bank drew on input from payments, technical and procurement specialists to set out clear requirements for the new system. It consulted with industry to identify priority areas for development, engaged with other central banks and commissioned independent external assessments. The Bank deliberately took time to ‘stop and think’ on the programme strategy and approach, for example, deciding early to build a new system rather than buy an ‘off-the- shelf’ product. This up-front effort helped ensure the time and effort for implementation could be calculated with a greater level of confidence.

The programme’s procurement approach allowed the Bank to access a breadth of technical expertise to refine the design for the new RTGS. Following market engagement, the Bank used a ‘competitive dialogue’ procurement process which allowed potential bidders to develop their proposed designs for the system in consultation with the Bank, prior to it awarding the contract to Accenture. The Bank felt its procurement approach helped it to develop as an ‘intelligent customer’. It was also able to draw on all the ideas proposed by bidders to set the design awarded in the contract. The process included a practical exercise—unusual for the 2 public sector—to design and build a simplified payment system, for which the two unsuccessful bidders were also paid. The Bank felt this reduced any risks that bidders would drop out of the procurement. The Bank did not feel that existing legislation had restricted its procurement approach. The programme had a dedicated procurement team which supported compliance and best practice. The up-front attention to requirements and design allowed the Bank to sign a fixed-price contract with Accenture, with the final system design closely matching the initial design.

The Bank took the strategic opportunity to move the RTGS to a new technology structure which better supports innovation, rather than patch up the existing legacy system. The Bank made an early strategic decision to move away from its old, existing (but not obsolete) legacy system to a more modern modular technology, one of the first central Banks to adopt this approach. It realised it needed a new technical solution to accommodate future capabilities and requirements, such as extended operating hours. By acting early, the Bank avoided a situation where the ageing legacy system became a ‘burning platform’ dictating the programme’s scope and timetable. The programme also included a major upgrade to payment messaging standards, improving interoperability through a consistent data structure, and enabling more detailed analysis. The Bank’s understanding that it could not indefinitely defer technology investment informed its early decision to replace the legacy system. It told us that lessons learned from the programme are now influencing how it approaches wider IT modernisation and its management of technology obsolescence.

The Bank adopted good practice programme management, adapting its approach for different stages and implementation challenges. To reduce delivery risk, implementation was organised as a sequence of ‘transition’ states, each capable of delivering benefits and operating independently in the longer term if required. As the programme moved into delivery, oversight shifted from the NED-led RTGS Renewal Committee to an executive-led Renewal Executive Board, which included the Chief Operating Officer to support commercial management. The programme underwent four ‘replans’ in response to internal and external circumstances, involving a review of programme scope, timelines and costs, and consultation with industry for each. The Bank used these replans to strengthen its focus on delivery. For example, during the first replan, the Bank revised the programme’s scope to focus on delivery of the core new system, moving some planned enhancements to after the launch for further industry consultation. The Bank assigned a high priority to the programme, recognising that it could affect its other work, and had to actively 3 manage dependencies throughout delivery. A mix of internal assurance from the programme and the Bank’s risk directorate, alongside external assurance, helped it to identify and manage risks and interdependencies.

The Bank created an open ‘no surprises’ culture within the programme, with strong collaboration between business, technology and external specialists. The Bank acknowledges that it is traditionally a hierarchical organisation. For the RTGS modernisation programme, it set a clear tone from the top to encourage an open ‘no surprises’ culture and foster a sense of team working. Staff were encouraged to raise concerns early and escalate issues through a range of mechanisms, including a ‘transparency channel’ that allowed them to share concerns anonymously. Senior leaders reinforced the team culture of everyone playing their part, for example, by attending weekend dress rehearsals for the launch of the new system. The programme also made a point of celebrating milestones to maintain morale and reinforce a shared sense of progress. The Bank recognised the importance of business and technology specialists working together and co- located them alongside Accenture staff to help break down potential silos. Partnership working with Accenture was further supported through the contract, which set out agreed ways of working, with key programme roles having both Bank and Accenture representation.

To secure the anticipated benefits from the new system, the Bank must make good on its plans for maintenance and further enhancement of the RTGS. Delivering long-term value from the new RTGS depends on the Bank’s ability to sustain and adapt the system as the payment landscape evolves. To maintain security, the Bank operates, maintains and updates the new RTGS in-house and also owns the intellectual property for the system design. It adopted a new target operating model, creating joint teams of payments and technical specialists, building internal technical expertise and establishing teams responsible for system oversight and managing change. As a result, estimated annual running costs have increased from £21 million to £41 million, with ongoing improvement built into business-as- usual funding. Since the new RTGS was launched in April 2025, the Bank has implemented more than 1,000 improvements, demonstrating the system’s flexibility. Knowledge and experience transfer formed an important part of the programme, with the last Accenture staff completing their work as planned shortly before we took evidence in March. The Bank is now working closely with industry to deliver three priority enhancements: extended operating hours; synchronisation (which enables coordination between the transfer of RTGS funds with the exchange of assets on other systems); and development of an alternative payment messaging network. 4 Recommendations

It is important that the Bank implements the recommendations in the C&AG’s Report to maximise potential benefits from the new RTGS. However, wider government has an opportunity to learn from the Bank’s successful implementation of this programme, and we therefore direct our own recommendations towards wider government as follows: a. recommendation Within three months DSIT should prepare a lessons-learned paper identifying how the Bank of England successfully overcame the challenges that we have previously reported on (and as set out in the State of digital government review) and what this means for government. This should specify planned actions and timing, and address the following areas: • ensuring digital leaders and non-executives with digital backgrounds are in the right governance roles on business-enabled digital change; • the importance of taking time to get the design right up front before embarking on the contract for actual delivery; • the importance of addressing problems with legacy systems before they become an unsustainable ‘burning platform’; • collaborative working between business operations, IT and supplier teams; and • ensuring skills transfer and creating internal expertise to maintain and enhance the technology continuously rather than in big once- in-a-generation projects. b. recommendation Drawing on the Bank’s experience, within six months, the Cabinet office should set out practical steps, and a timetable for action, on how it will improve the ability of senior business leaders in digital business management and transformation, and strengthen the role and influence of digital specialists. 5 c. recommendation Within six months NISTA should update its guidance and support materials to reflect the distinct challenges of digital programmes and the success factors that the RTGS modernisation demonstrated. d. recommendation Within six months the Digital Commercial Centre of Expertise and Government Commercial Agency should update guidance to the commercial function to ensure that time is taken before contracts are let to properly understand the business and technical complexity and requirements for digital programmes with full engagement from technical specialists so that delivery time can be realistically planned and costed. e. recommendation To provide sufficient expertise, capacity and focus in supporting digital transformation across government, DSIT should reinstate the Government Chief Digital Officer role immediately with the aim of recruiting a candidate with proven experience, skills and knowledge in digital business management and transformation within the next year. 6 1 Leadership and planning Introduction

The Deputy Governor noted that he had limited prior experience in technology projects, so it was essential to create “a team of people who knew what they were doing”.17 One early decision on the programme was to work in partnership with an external supplier, as the Bank did not have the in-house expertise to modernise the RTGS itself.18 The NAO report notes that programme governance included representation from payments, technology and the Bank’s central services staff, to support key decision- making, with the RRC and REB willing to act on specialist advice to respond to major changes that the programme required.19 We also saw the benefits from the continuity of senior leadership of the programme with the Deputy Governor having responsibility from 2017 through to 2025, and the senior owner and chief technology officer being involved throughout its course.20 Early planning of scope and requirements

The Bank invested significant planning time and effort upfront to set out the detailed requirements for the new system before moving to design and implementation, which helped it avoid issues that we have seen cause problems in other public sector digital change projects. Between 2016 and 11 Q 1; C&AG’s Report, para 1.23 12 Q 23 13 C&AG’s Report, para 2.13 14 Q 1 15 Q 28 16 C&AG’s Report, paras 2.12-2.13 17 Q 3 18 Q 12 19 C&AG’s Report, paras 1.22-2.13 20 Introductory remarks from witnesses prior to questioning 9 2018, it ran an internal process drawing on payment system, technical and procurement specialists to understand what services the new RTGS needed to deliver. The Bank also consulted with industry, other central banks and critical national infrastructure projects and used independent external assessments. This early planning informed key strategic decisions including: to move away from a mainframe technology; to appoint an external partner to build the system rather than buy one off-the-shelf; and ultimately to maintain and operate the new system itself.21

The Bank emphasised the importance of clarity of its vision from the outset, identifying resilience, competition and innovation as core early objectives. Following industry consultation, the Bank published a blueprint for the new RTGS in 2017, setting out five priority areas: higher resilience, broader access, wider interoperability, improved user functionality and strengthened end-to-end risk management of CHAPS. The Bank told us that the five blueprint priority areas provided a “golden thread” through the programme, shaping requirements and design decisions, with an end goal of “not just going live, but staying live”.22 The Bank said it identified nearly 2,000 functional and non-functional requirements for the new system which acted as a “north star” to help guide it through the process.23

The Bank felt that getting the requirements was key to the programme, although spending several months on this stage at times seemed “a little daunting”.24 The Bank told us that this up-front investment enabled it to start procurement with “a clear sight of what we wanted and [ … ] the technical requirements”.25 Procurement

Following market engagement to identify sufficient suitable providers, the Bank chose a ‘competitive dialogue’ procurement process, where potential bidders developed their design proposals in consultation with the Bank. The Bank saw the procurement as a “foundational phase” that allowed it to test capacity and capability and enter the delivery phase as an “intelligent customer”.26 The Bank’s procurement strategy included a practical “competed design” exercise—not often seen in the public sector—in which the final three bidders designed and built a simplified payment system. This helped test bidders’ technical approach and their 21 C&AG’s Report, paras 1.14-1.16 22 Q 3 23 Q 9 24 Q 3 25 Qq 4 and 53 26 Q 4 10 responsiveness to customer needs.27 The Bank recognised the exercise would be a “big effort”. To incentivise all bidders and reduce any barriers to continuing with the procurement, it decided to pay towards the cost of the exercise, with the two unsuccessful bidders each receiving £125,000.28

The Bank did not find that current procurement legislation and rules constrained its approach. The programme had a dedicated procurement team that helped ensure a compliant and fair process. To help manage security considerations, the Bank also worked with the National Cyber Security Centre to identify all potential issues. For example, it told us it provided clear guidance to bidders on security requirements for their facilities, and the need for accreditation. The Bank told us that it deliberately took its time with the procurement process, extending it by five months, which provided more time for designs to be refined and helped ensure it had asked all the right questions before awarding a contract.29

Following procurement, the Bank awarded a fixed-price contract to Accenture. This covered both the design, build and testing of the core RTGS settlement and ledger components, and oversight of the end-to- end systems integration (that is, ensuring the core components worked as intended with the many other components of the RTGS).30 We recognise that awarding a fixed-price contract is very unusual for a digital transformation programme. The Bank highlighted to us how this had been made possible by its early work on specifying requirements and refining designs through the procurement process.31 The Bank told us it drew on the “best of breed – the best of all the designs” and ideas from all the bids in finalising the system design.32 The NAO report noted that the system design when the contract was let was close to that of the new RTGS when it was launched, supporting the Bank’s choice of approach.33 Modernising the RTGS and moving away from legacy

The Bank made an early strategic decision to move away from its legacy system for the RTGS and use a new technology approach, one of the first central banks to do so.34 The Bank explained that although the legacy system was reliable and remained operational, it had limited flexibility 27 C&AG’s Report, para 1.18 28 Q 7; C&AG’s Report, para 1.18 29 Qq 5-6; C&AG’s Report, para 1.18 30 C&AG’s Report, para 1.19 31 Qq 8-9 32 Qq 4 and 7 33 C&AG’s Report, para 1.20 34 C&AG’s Report, paras 2.23-2.25 11 and was difficult to update, making it hard to adapt to new requirements. It wanted to switch to a more modern, modular platform that could better respond to current and future developments in the payments infrastructure, such as the demand for longer operating hours. By taking the decision early to modernise the technology, the Bank reduced the risk that the performance of the legacy system would constrain future choices or dictate the scope and timetable of the modernisation programme.35

The modernisation programme incorporated a major upgrade and move to new payment messaging standards for CHAPS and the RTGS, the so-called ISO 20022 standards.36 The Bank explained that moving to the new messaging standards improves interoperability with other national and international payment systems, one of the five priorities set out in the 2017 blueprint. It also supports the use of more structured and detailed data, enabling RTGS users and the Bank to better understand and process payment information. In moving to the new standards, the Bank added that it had to engage closely with industry and coordinate the move with other migration programmes happening outside the UK, for example, the European Central Bank.37

The Bank told us that the RTGS programme reinforced the importance of investing in new technology at the right time and that it could not “keep pushing the investment to the right” without increasing the risk of obsolescence or making future change more difficult.38 The Bank said that its experience with the RTGS is now shaping how it approaches its wider IT modernisation, including decisions about when to upgrade systems and how to manage ageing technology. It told us that prioritising investment in a strategic way was a key lesson from the programme and is trying to apply this across the Bank’s other major change programmes, for example, its upgrade of its record management system.39 35 Qq 3, 5, 31 and 40 36 C&AG’s Report, para 1.7. The ISO 20022 messaging standard is an international standard that facilitates the sending of enhanced payments data. 37 Qq 18 and 38-39 38 Q 31 39 Qq 30-31 12 2 Programme delivery and future enhancements Programme management

To identify and manage risks, the programme team and the Bank’s risk directorate provided internal assurance and audit while external specialists offered additional challenge on project management and technical aspects of the programme. As the programme was high-priority, the Bank had to actively manage interdependencies with, and impacts on, its other work, for example, because of constraints on staffing or the amount of change the Bank could absorb.40 We also heard many examples of how the Bank managed specific programme delivery risks, which were heightened for the introduction of a new technology design for the RTGS. One early mitigation that the Bank used was to organise the programme into a series of ‘transition’ states. These were designed so that each step delivered benefits and could operate independently for longer if necessary, in the event of delays.41

We asked about the Bank’s decision to adapt the programme governance arrangements as it moved from planning into delivery, which the Bank explained was driven by “learning by doing”.42 Initial programme oversight was through the NED-led RTGS Renewal Committee (RRC), which drew on NEDs’ commercial and procurement experience. For delivery, the Bank replaced the RRC with an executive-led Renewal Executive Board (REB), which it felt would have closer sight of the programme to make necessary strategic and operational decisions. The REB included the Chief Operating Officer, who provided support for commercial negotiations and managing dependencies with other parts of the Bank, and it was also attended by Accenture. The Bank told us that the REB met more frequently as delivery intensified, weekly during the final stages, to maintain close oversight of progress.43 40 C&AG’s Report, Paras 23 and 2.2; Qq 33-34 41 C&AG’s Report, para 2.25 42 Q 22 43 Qq 15, 17-18 and 22-23; C&AG’s Report, para 2.21 13

The Bank explained more about the four major ‘replans’ of the programme, which each involved a review of programme scope, timelines and costs, noting that “doing a replan can be a brave decision”.44 Each came in response to very different internal and external circumstances. We were interested to hear how the Bank used the replans to strengthen the focus on delivery. For example, in the first replan, it rescoped the programme to prioritise delivery of the fundamental new system and focus resources on activities critical to the system launch. It moved some planned additional enhancements to after launch so they could be developed further with industry input. The Bank explained that it engaged with industry during each replan to test assumptions and understand impacts.45 Culture and ways of working

The Bank acknowledged that it is traditionally a hierarchical organisation. For the programme, it was keen to encourage an open ‘no-surprises’ culture.46 It put in place a number of mechanisms to support such a culture, including a behaviour manifesto setting out expectations, a ‘transparency channel’ that allowed people to share concerns anonymously and various staff groups and events that provided regular opportunities for staff to engage with senior leaders.47 The Bank emphasised the importance of leaders buying into a ‘no-surprises’ culture, for example, in how they treat red flags in a risk report: “red means that we can go and ask for help. Red does not mean that you should be hiding it”.48

The Bank explained how programme culture “started from the very top” with senior leaders modelling the behaviours they expected from the programme team.49 For example, despite not having a direct operational role, leaders attended weekend dress rehearsals ahead of the new system’s launch, which it felt helped reinforce a shared sense of ownership for the new system. It told us how leaders made efforts to include staff based in different locations; for example, regularly visiting part of the Accenture team based in Newcastle, and convening all-staff town halls and large online planning meetings. The Bank added that it celebrated the achievement of key milestones to sustain morale and reinforce a shared sense of progress.50 44 Q 19 45 Qq 17-21; C&AG’s Report, para 2.5 46 Qq 21, 25-26 and 29 47 Q 25; C&AG’s Report, para 2.15 48 Qq 25 and 29 49 Q 24 50 Qq 24-26 14

The Bank emphasised that “the one-team approach was absolutely key [ … ] with Accenture and technology, but also [ … ] the [RTGS] operators”. It saw co-locating business and technology specialists with Accenture staff as vital to break down potential silos and support joint delivery: “enabling the technical specialists to see what the live operators were doing on a day-to- day basis”.51 Collaborative working was supported through the contract, which set out agreed ways of working, and through arrangements where both the Bank and Accenture were represented in key programme roles to support joint decision making.52 Securing benefits from the programme

The Bank took an early decision that, to support system security and long-term resilience, it would run, maintain and update the new RTGS itself, once live. It also owns the intellectual property for the new system. The Bank highlighted that knowledge transfer was an important part of the programme, which was designed so that the Bank would take full responsibility for the RTGS once the Accenture contract ended. For example, it described how it embedded its own staff alongside Accenture teams from an early stage so they could acquire the skills needed to operate and improve the new RTGS.53 The Bank said that Accenture’s involvement concluded as planned shortly before our session in March.54 It also noted how it can benefit from wider ‘experience transfer’ as Bank staff from the programme move to other roles within the organisation.55

The new RTGS provides a foundation for future development, but the NAO report has stressed how the Bank’s focus must now be on maintaining and enhancing the system to maximise benefits going forward.56 The Bank told us that the new system is more flexible than the legacy platform, with over 1,000 improvements made since its launch in April 2025.57 The Bank has adopted a new target operating model, bringing together payments and technology specialists, building technology support expertise and building in provision for continuous improvement.58 The Bank told us that as a result, estimated annual running costs have increased from £21 million to £40 million, reflecting the need for greater in-house technical capability to support RTGS operations, fix incidents and enhance the 51 Q 28 52 C&AG’s Report, para 2.21 53 Qq 43, 45 and 50; C&AG’s Report paras 1.14 and 1.20 54 Q 43 55 Q 31 56 C&AG’s Report, paras 23-24 57 Q 40 58 Q35; C&AG’s Report paras 3.2 and 3.8 15 system in the future.59 The Bank’s “evergreening” means that the technology function is enhanced on a continuous basis rather than “once-in-generation projects”60

The Bank is working with industry to deliver a set of priority enhancements including extended operating hours, synchronisation (a functionality that allows payment systems to coordinate the movement of funds with the exchange of assets on other systems), and the development of an alternative payment messaging network.61 In February 2026, the Bank published proposals to open RTGS at 1:30am (previously 6am) from September 2027 reflecting industry demand and the need to support activity in international markets.62 It is also testing the synchronisation functionality through a laboratory involving 18 participant organisations, which will develop potential applications, for example, to real estate and foreign exchange transactions.63 Written evidence also drew our attention to the value of developing an alternative messaging network to reduce reliance on a single provider.64

The Bank told us that it will continue adapting RTGS to respond to developments in the wider payments landscape, to provide both the infrastructure and the technological platform to support innovation. It explained that payment technologies and settlement models are evolving, including emerging distributed ledger technologies, new approaches to cross-border settlement and the potential future use of digital currencies.65 Written evidence we received also emphasised that future settlement models may require so-called ‘atomic settlement’—which the Bank told us was a form of synchronisation—and that RTGS will need to be interoperable with emerging technologies to support such developments.66 The Bank told us that it is monitoring these developments and considering how RTGS can interoperate with different technologies and forms of payment.67 59 Qq 35, 43 and 45 60 Q35 61 C&AG’s Report, para 3.11 62 BOE, Extending RTGS and CHAPS settlement hours – early morning extension, 24 February 2026 63 Qq 30 and 37-38; BOE, Synchronisation Lab, updated 23 February 2026. 64 Hleb Buziuk (BOE0001) 65 Qq 36 and 51 66 Professor Daniel Broby (BOE0002) 67 Qq 36-40 16