The ECB’s postponement of its migration to a new messaging standard in 2022 ended up costing the Bank of England £23 million, as the BoE had to adjust its own transition to a different settlement system to prevent heightened risks.
The Bank of England’s broader initiative to upgrade to a Real-Time Gross Settlement (RTGS) system, valued at about £431 million, was largely deemed a success by the National Audit Office (NAO) despite being re-planned four times and incurring an additional £56 million beyond the original contingency. The NAO noted that delays on an unrelated ECB project contributed to overspending on the BoE’s RTGS renewal, which began in 2016 and handles sterling settlements worth roughly £790 billion each day.
A second re-plan during the 2022–23 winter arose from an external, uncontrollable event. The NAO explained that the ECB shifted its migration date for the ISO 20022 messaging standard closer to the BoE’s own migration, creating an excessive change load for users to manage safely.
ISO 20022 is the global standard for financial electronic data interchange, offering a single, richer language for payments and replacing older formats like SWIFT MT. In October 2022, the ECB delayed its migration to June 2023, just four weeks before the BoE’s planned RTGS launch.
The NAO stated that consultations with RTGS users showed that having the two migrations so near in time produced an unsafe level of change for users to handle. Consequently, the BoE deferred both its migration and the RTGS launch. The 2020 business case had already flagged the possibility of such an external “shock” and the need for additional funding.
The NAO also commented that the total cost of the RTGS program exceeded initial expectations by about 15 percent, and surpassed the original 11 percent risk contingency. Nonetheless, the NAO concluded that this level of increase was reasonable given the program’s scale, complexity, and the uncertainties involved.
In 2020, the Bank contracted Accenture as its technical delivery partner. The prior RTGS system ran on mainframe technology, which was increasingly difficult to maintain due to specialized hardware requirements and a shortage of skilled personnel. The new platform remains internally hosted but utilizes cloud-native technologies, increasing flexibility.
And this is where the broader debate begins: should mega-scale modernization programs tolerate higher initial overspend to ward off bigger, long-term risks, or should projects constrain costs even when facing external shocks? What’s your take on balancing budget discipline with strategic resilience in critical financial infrastructure?
