A glitch hit the Bank of England (BOE) last month, throwing its payments system flat and hobbling thousands of housing market transactions. Deloitte has been appointed as independent investigator for the originating cause.
On the 20th of October two of the BOE’s payment systems developed a problem. The Real Time Gross Settlement system, used daily to transfer £575 billion of payments between banks, left many home buyers and sellers unable to complete transactions. In addition, its Clearing House Automated Payment System (CHAPS), which processed £277 billion transactions a day last year, also fell out.
The outage lasted 10 hours, with large inter-bank payments being given priority following the disorder, with the clearance of private house payments were pushed back. Its 142,759 payments were all settled before its extended deadline was reached, with many transactions completed manually.
To get to the bottom of the payment system problem the UK central bank has hired accounting- and consulting firm Deloitte. It is believed to have been caused by a bank being added to the payment system and another bank being removed. When payments were made toward the bank that had been removed, the alarms were triggered. Deloitte will also investigate the wider policies and procedures surrounding the delay and how it was concretely handled by Bank of England staff. The findings of the investigation are expected to be published early next year.
It is not the first time the BOE brings in the expertise of Deloitte. Last year the Big 4 firm supported the bank with a large operational transformation, which included redefining its target operating model and business processes in several back office areas of the bank. Also McKinsey & Company recently served the BOE – the US strategy consultancy helped governor Mark Carney with drafting the bank’s long term strategy and roadmap, internally known as ‘One Bank’.