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RTGS.global unveils industry payments resilience solution

RTGS.global unveils industry payments resilience solution

RTGS.global has revealed a new resilience solution, RTGS.global ARK, at the Central Banks Payments Conference in Athens, boasting early interest from a handful of central banks.

As a global next-gen Financial Market Infrastructure (FMI), the firm describes RTGS.global ARK as a contingency settlement service for domestic high-value payment systems, which are largely operated by central banks.

RTGS.global also operates a settlement network that enables banks to safely exchange liquidity in two currencies ‘payment vs payment’ (PvP), which helps in eliminating FX settlement risk. Dave Sissens, CEO of RTGS.global, explains that RTGS.global ARK is a contingency solution that can enable Payment System Operators to ensure resilience for their local RTGS systems to keep running in situations where there is some disruption to the RTGS system being able to process payments between its participants.

Why FMIs need RTGS.global ARK

RTGS.global ARK offers a fully standalone contingency solution through enabling RTGS operators a “third site - it is so independent, it is essentially what is known as a non-similar facility (NSF),” Sissens adds.

This involves “having a third site for your payment system which is fundamentally different to your primary operating site. This means if there are any problems tied to code, system logic, data, or network components for instance, your third site will be different enough to get you through your business day.”

Whilst enabling risk mitigation, tertiary sites can be prohibitively expensive. High-profile outages in payment systems have been occurring frequently in recent years, demonstrating how connected components between operating centres can fail.

Problems with primary sites could therefore also seep through to secondary sites. Central Banks are therefore looking to bolster their RTGS systems with a stronger layer of resilience.

While FMIs typically opt for a separate physical data centre in another location to create “technological lifeboats”, Sissens adds, RTGS.global ARK can be rolled out globally, presenting significant cost efficiencies.

This global reach is a result of RTGS.global’s partnership with Microsoft - possessing all the benefits of a cloud-native solution. RTGS.global ARK is not reliant on SWIFT, allowing it to provide new communication protocols and take feeds from any input.

“There is no need for new infrastructure for payment systems, or for banks themselves to connect to payment systems directly. Essentially, RTGS.global ARK could make the failover between SWIFT or a live data centre completely seamless. This is the true benefit: being able to have a seamless failover.”

Speaking about the significance of RTGS.global ARK in the industry at present, Sissens underscores the growing number of cyber-attacks on financial services: “Recent trends have shown that cyber-attacks are targeting the heart of the financial system, which is the FMIs themselves. FMIs’ interconnectivity means significant problems may arise if critical market infrastructures are penetrated. Protecting market infrastructures and developing high-resilience in their functioning is becoming increasingly important.”

Sissens flags their connection to Microsoft as a differentiator for RTGS.global ARK. “All of a sudden, what was thought to be out of reach - a true NSF where everything is separate - is no longer unattainable. What was thought to be impossible is now actually achievable and efficient.”

Opening doors to payment system operators

Sissens states that RTGS.global is currently in talks with three G20 central banks which have expressed interest in RTGS.global ARK.

“We are also working with a number of central banks which are considering a domestic resilience solution for regional benefit. That is, if a group of central banks in a region adopts RTGS.global ARK, they can realise the benefits of it as well as the cross-border benefits we bring through our PvP liquidity settlement solution. Therefore, they make one investment into a new connection and obtain a stronger security posture as well as cross-border currency exchange as a result.”

Given expressions of interest in RTGS.global ARK have been healthy, and operational resilience high on the list of concerns of financial regulators and banks globally, Sissens shares his excitement for RTGS.global ARK into the future: “If we look at the world of market infrastructures, you've got payment systems, clearing houses, and security depositories, totalling circa 500 market infrastructures. These are all exposed to risk of failure and/or attack, which can have systemic risk implications given the vital role key FMIs play in the smooth running of the financial markets and global payments."

In explaining the benefits of RTGS.global ARK, given its payment system focus, RTGS.global is initially talking to RTGS Payment System Operators – be they central banks themselves, or external operators.

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