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What new functionalities could a consolidated platform offer?
Consultation on the future of
RTGS services
Information session
22 March 2016, Frankfurt am Main
Sylvain Debeaumont
Head of Market Infrastructure
Management Division, ECB
Rubric
www.ecb.europa.eu ©
Overview
What new functionalities could a consolidated platform offer? 2
Consultation on the future of RTGS services
1
2
3
Opening hours
Multi-currency services
Remittance and payments data
4
5 Openness to new technologies
Account management
PUBLIC
Rubric
www.ecb.europa.eu ©
Future enhanced functionalities may arise from …
… reviewing today’s RTGS features;
“TARGET2: Principles and structure”, 14 July 2003
Go-live 1st wave: 19 Nov 2007
… bringing the two platforms together;
… understanding future needs of the market!
3
Consultation on the future of RTGS services PUBLIC
What new functionalities could a consolidated platform offer?
Rubric
www.ecb.europa.eu ©
Overview
What new functionalities could a consolidated platform offer? 4
Consultation on the future of RTGS services
1
2
3
Opening hours
Multi-currency services
Remittance and payments data
4
5 Openness to new technologies
Account management
PUBLIC
Rubric
www.ecb.europa.eu ©
Remittance and payments data
Background
– New opportunities brought by the migration to ISO20022 standards
– Exploiting the richness of new standards
– Going beyond the like-for-like
– Standardisation exercise
5 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Remittance and payments data
Options
6 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Unique Transaction Identifier
End-to-end identification
Remittance information
Intermediary bank
Instructing agent
Legal Entity Identifier
Extended reference field
Ultimate creditor
Instruction for next agent
Structured postal address
Extended character set
Supplementary data
Structured regulatory reporting
Tax information
Clearing channel
Creditor reference information
Tax iD
Rubric
www.ecb.europa.eu ©
Remittance and payments data
Expected benefits
– Better integration of participants’ internal (back-office) applications
– Optimisation of the end-to-end processing (e.g. corporate flows)
– Creating value
7 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
• Coexistence with correspondent banking flows
• Converging standards for high-value payment systems worldwide
• Dependence towards ISO standards
Rubric
www.ecb.europa.eu © What new functionalities could a consolidated platform offer? 8 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services
Rubric
www.ecb.europa.eu ©
What is most important in terms of
remittance and payments data?
Enriching payments data
Consultation on the future of RTGS services
1
2
3
Aligning with other high-
value systems worldwide
Maintaining backward
compatibility with legacy
standards
34.3
58.2
7.5
%
The results above present the vote of the participants at the information session.
Rubric
www.ecb.europa.eu ©
Overview
What new functionalities could a consolidated platform offer? 10
Consultation on the future of RTGS services
1
2
3
Opening hours
Multi-currency services
Remittance and payments data
4
5 Openness to new technologies
Account management
PUBLIC
Rubric
www.ecb.europa.eu ©
Opening hours
Background
– Expand existing cut-offs
– Globalisation of the economy
– Support to new initiatives
– Technological choice
11 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Opening hours
Options
24 / 7 / 365
12 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
TARGET closing days
Weekends
End-of-day / start-of-day phase + technical maintenance
– Level of service / reactivity?
– Which services available during the night?
– Differentiation between RTS / NTS?
Rubric
www.ecb.europa.eu ©
Opening hours
13 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Expected benefits
– Better support market needs
– Attract new business
– More evenly spread out volume / turnover
• Cost implications
• Organisational implications
• Liquidity management implications
Rubric
www.ecb.europa.eu ©
What should be the operating hours of
regular payments ?
The current ones
Consultation on the future of RTGS services
16.9
49.2
33.9
%
The current ones,
marginally expanded
24h/7
1
2
3
The results above present the vote of the participants at the information session.
Rubric
www.ecb.europa.eu ©
Overview
What new functionalities could a consolidated platform offer? 15
Consultation on the future of RTGS services
1
2
3
Opening hours
Multi-currency services
Remittance and payments data
4
5 Openness to new technologies
Account management
PUBLIC
Rubric
www.ecb.europa.eu ©
Multi-currency services
Background
– T2S as multi-currency platform
– Initial requirement vs later enhancement
– Example of multi-currency platforms
– Primarily a policy decision by Central Banks to join
– Confirmed interest by some markets / Central Banks
16 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Multi-currency services
Options
17 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Multi-currency services
Options
18 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Multi-currency services
Expected benefits
– Euro area banks active in joining countries
– Banks in joining countries active in the euro area
– Lower investments and running costs
– Eases joining EMU
– Possibility to settle individual PvP transactions ?
19 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
• Increasing level of interdependencies
• Governance aspects
• Crisis management
Rubric
www.ecb.europa.eu ©
Would you be interested in making use
of PvP services?
Consultation on the future of RTGS services
Yes
Perhaps
No
1
2
3
41.5
34.0
24.5
%
The results above present the vote of the participants at the information session.
Rubric
www.ecb.europa.eu ©
Overview
What new functionalities could a consolidated platform offer? 21
Consultation on the future of RTGS services
1
2
3
Opening hours
Multi-currency services
Remittance and payments data
4
5 Openness to new technologies
Account management
PUBLIC
Rubric
www.ecb.europa.eu ©
Account management
Background
– Consolidation of technical services vs consolidation of accounts
– Pooling of liquidity vs segregation of funds
– Role of the RTGS account in the management of liquidity
– Organisation of banking groups
22 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Account management
Options
23 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
DCA
sub
account
RTGS home
account
standing
facilities
Other CB
accounts
Securities settlement
Reserve fulfilment
Ancillary systems
Intragroup transactions
Other operations (e.g. cash) PHA
Marginal lending
Overnight deposit
Monetary policy
Intragroup transactions
Payments to third parties
Intraday credit
Ancillary systems
Reserve fulfilment
Other operations
Intraday credit H U
RTGS
H U
RTGS
H U
RTGS
H U
Rubric
www.ecb.europa.eu ©
Account management
Options
24 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
DCA
sub
account
RTGS home
account
standing
facilities
Other CB
accounts PHA
H U
RTGS
H U
RTGS
H U
RTGS
H U
Eurosystem platform
Rubric
www.ecb.europa.eu ©
Account management
Options
25 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
DCA
sub
account
RTGS home
account
standing
facilities
H U
RTGS
H U
RTGS
H U
RTGS
H U
Eurosystem platform
Rubric
www.ecb.europa.eu ©
Account management
Options
26 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
RTGS
RTGS
H U
RTGS
H U
RTGS
H U
RTGS RTGS RTGS
Eurosystem platform
Rubric
www.ecb.europa.eu ©
Account management
Options
27 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Eurosystem platform
RTGS
Rubric
www.ecb.europa.eu ©
Account management
28 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Expected benefits
– Limit the number of accounts
– Managing concurrent usage of liquidity
– Simplify banks’ liquidity management
• Heterogeneity of requirements
• Specificity of banking groups
• Strong link with liquidity management features
Rubric
www.ecb.europa.eu ©
What type of an account set up would
you prefer?
One account for all my payments
and settlement business
(“universal account” model)
Consultation on the future of RTGS services
1
2 Several dedicated accounts
combined with an RTGS account
as a pivot (“dedicated pot” model)
55.4
44.6
%
The results above present the vote of the participants at the information session.
Rubric
www.ecb.europa.eu ©
Overview
What new functionalities could a consolidated platform offer? 30
Consultation on the future of RTGS services
1
2
3
Opening hours
Multi-currency services
Remittance and payments data
4
5 Openness to new technologies
Account management
PUBLIC
Rubric
www.ecb.europa.eu ©
Openness to new technologies
Background
– Innovation opportunities brought by new technologies
– Centralised set-up of Financial Market Infrastructures
– Emerging demand from the market
– Growing interest from banks and central banks
31 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Rubric
www.ecb.europa.eu ©
Openness to new technologies
32 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
Options
– For the operation of the RTGS system itself ?
– For supporting the other financial market infrastructures ?
– For providing new services ?
Rubric
www.ecb.europa.eu ©
Openness to new technologies
Expected benefits
– Positive effect on resilience ?
– Positive effect on cyber security ?
– Positive effect on costs ?
– Positive effect on revenues ?
33 What new functionalities could a consolidated platform offer?
Consultation on the future of RTGS services PUBLIC
• Moving target
• Need to join the dots
• What’s behind the hype ?
Rubric
www.ecb.europa.eu ©
Blockchain and DLT in the payments
business are:
The future
Consultation on the future of RTGS services
An interesting
opportunity to consider
Only relevant for
specific niches
Just a hype
1
2
3
4
8.0
54.0
26.0
12.0
%
The results above present the vote of the participants at the information session.
Thank you for the attention!
www.ecb.europa.eu/paym
@T2SECB
#target2 #t2s
PUBLIC