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SWIFT to develop business continuity service for Real Time Gross Settlement systems

email this aricle - SWIFT to develop business continuity service for Real Time Gross Settlement systems  - Brussels - 18 July 2011 print this article - SWIFT to develop business continuity service for Real Time Gross Settlement systems  - Brussels - 18 July 2011
The Market Infrastructure Resiliency Service, to be piloted by the Bank of England starting Q2 2013, will address market infrastructures’ need for a cost-effective, resilient, reliable and secure business continuity solution in case of a major outage.

SWIFT, the financial messaging provider for more than 9,700 financial institutions and corporations in 209 countries, today announced the development of its Market Infrastructure Resiliency Service (MIRS), a new service designed to keep key functions of Real Time Gross Settlement (RTGS) systems operating in the event of a major outage.

MIRS will strengthen the business continuity of RTGS systems’ payments operations by making use of SWIFT’s resiliency, security and availability to set up arrangements that will enable central banks and payment market infrastructures to continue their operations despite catastrophic circumstances such as a simultaneous loss of all sites.

SWIFT worked with several central bank operators of RTGS systems to determine how their arrangements could be improved to allow for business continuity even in the extreme scenario of the catastrophic loss of all production sites, at an acceptable cost. The conclusion of this work is that SWIFT can play a pivotal role in providing MIRS to support RTGS operators in their efforts to prepare themselves against a large-scale failure, providing a cost-efficient solution with minimum impact on the RTGS system’s participants.

The Bank of England will participate in the MIRS pilot with a view to subscribing to the service when it becomes available. The MIRS service specifications have been agreed in collaboration with a number of central banks and development is under way. The current plan is to complete development by the start of Q2 2013. Following a pilot testing phase with the Bank of England, general availability is scheduled for Q4 2013.

MIRS is a shared service. It is a separate generic payment settlement system hosted at SWIFT and featuring all of the strengths of SWIFT in terms of security, resiliency and availability. MIRS will be technically operated by SWIFT while the central bank or payment market infrastructure will handle the business management of the service from its Crisis Command Centre connected to SWIFT.

MIRS will:

° Establish accurate starting liquidity positions at the time of failure, including the outstanding unprocessed payments held in SWIFT message queues.
° Maintain the account structure and enable transfers across the books of the central bank.
° Settle inter-bank payments and net settlements initiated by banks or ancillary systems.
° Provide a user interface to give the RTGS operator and participating banks monitoring and control functionality.
° Provide the essential credit controls to prevent settlement banks going overdrawn at the central bank.

Explaining the Bank of England’s rationale for working with SWIFT on the development of MIRS, Toby Davies, Head of Market Services Division, Bank of England, says: “With twin operational sites, our current operation of RTGS – the UK’s inter-bank high value payment system - is highly resilient but we have been looking for a strong and cost effective contingency solution in the improbable event of catastrophic failure. This reflects the Bank’s commitment to the resilience of the UK financial infrastructure. In that unlikely scenario, MIRS would enable CHAPS and other payments activity to continue to settle in central bank money throughout the business day. We are pleased to be participating in the pilot.”

Alain Raes, chief executive, EMEA, SWIFT, says: “MIRS will make a vital contribution to the safety of critical payments market infrastructures, and SWIFT is perfectly positioned to help our customers benefit from highly resilient business continuity services at a reasonable cost, thanks to our existing footprint in the payments world. We are delighted to be working with the Bank of England to build a solution that caters for the interests of a whole community as we deliver on our key strategic thrust to expand our services for RTGS systems by leveraging our core competences.”

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