SWIFT Launches New Backup Service for High-Value Payments
SWIFT has launched the Market Infrastructure Resiliency Service (MIRS), a backup service for real-time gross settlement (RTGS) systems. The Bank of England has become the first RTGS provider to go live with MIRS.
RTGS systems are electronic platforms used for the continuous settlement of high value and multi-currency cash payments between banks. Central banks and financial market infrastructures use them to ensure effective settlement of high-value payment transactions.
MIRS provides an extra line of support to RTGS operators experiencing problems with first and second line backup systems. Once active, the service provides the essential functions required to achieve final settlement in real-time on a transaction-by-transaction basis. RTGS operators remain in full control of the service while SWIFT manages the technical operations.
Juliette Kennel, head of market infrastructures for SWIFT noted that with the prominent role RTGS systems play in the world economy, safeguarding them against operational disruptions and managing related risks is critical. “MIRS provides market infrastructures with the necessary tools to maintain business as usual operations even in the very unlikely but high impact event that their first and second lines of defence were to fail,” she said.
Bank of England Adopts MIRS
SWIFT has been working with a group of central banks since 2011, identifying the necessary requirements to enable RTGS functions to operate normally in the case of disruptions at their existing sites. The Bank of England completed a pilot in late 2013 and successfully tested MIRS with the Clearing House Automated Payment System (CHAPS), a UK payments system that processes and settles both systemically important and time-dependent payments in sterling. On 24 February 2014, the Bank of England went live with MIRS, further increasing the resiliency of the Bank’s RTGS service, the UK’s High Value Payments System (HVPS). MIRS should allow the bank’s RTGS to continue to operate smoothly in the event of disruptions at its two existing sites.
“With two live operational sites, our current RTGS systems are highly resilient,” said Toby Davies, head of market services at the Bank of England. “However, we wanted to establish an additional contingency solution that was both robust and cost effective. MIRS will allow us to continue operating at full business volumes in the unlikely event of an outage affecting both our existing sites simultaneously.”
CHAPS worked in close collaboration with the Bank of England and SWIFT to support the delivery of MIRS. Phil Kenworthy, Managing Director, CHAPS Co. said he strongly believes that MIRS will deliver real benefits to all CHAPS users. “CHAPS will continue to work closely with the Bank of England to deliver further initiatives that mitigate operational risk to the country’s financial infrastructure and work in the interest of our current and future users,” he said.
MIRS is available to all HVPS market infrastructures, including those not currently on SWIFT.