BoE outage rocks payment systems

The Bank of England has successfully addressed a technical problem that resulted in the temporary shutdown of a crucial system responsible for processing approximately £1 trillion in daily transactions.

The central bank confirmed that the issue has been resolved and that settlement operations will resume shortly. The incident impacted the real-time gross settlement (RTGS) service, utilised to finalise transactions between financial institutions and banks, as well as the automated Chaps payments system, which handles high-value transactions like property sales.

The RTGS service is fundamental to the UK’s banking infrastructure and plays a crucial role in maintaining financial stability. It facilitates over £750 billion in transactions on average each working day, with peak volumes exceeding £1 trillion in previous autumn periods.

Chaps, responsible for processing approximately £350 billion in daily transactions, is used by banks for significant interbank payments. Individuals can also utilise Chaps to conduct high-value payments, such as those associated with home purchases and vehicle acquisitions.

Following the roughly six-hour outage, the Bank is anticipated to address the backlog of payment settlements. The Bank did not provide specific details regarding the root cause of the system failure.

The Chaps disruption could potentially have affected individuals across the UK attempting to complete property transactions on schedule. Meanwhile, the RTGS service’s temporary halt might lead to delays for banks that maintain settlement accounts with the system.

August is identified as a peak month for home relocations, according to data from the comparison site reallymoving. Any delays in money transfers could impact individuals aiming to finalise their residential moves.

Although these systems are typically reliable, a Chaps outage of 10 hours occurred in 2014 due to issues related to routine maintenance of the RTGS. This incident prompted an apology from the former Bank governor Mark Carney and led to an official investigation.