The Bank of England mishandled the breakdown of its electronic payments system in October, an independent report has said.
Accountancy firm Deloitte has criticised the central bank in a report commissioned by the Bank’s governing court to evaluate its performance during the breakdown on October 20th last year. The report concluded that the Bank of England’s administration failed to notify bosses quickly enough that house purchase transactions were being held up by the failure of its payments infrastructure.
The incident disrupted a “significant” number of house purchases transactions and created “considerable inconvenience” for ordinary households and companies, Deloitte’s report said. Since the incident, the Law Society has estimated that about half of the housing transactions being dealt with that day were delayed by several hours, and some not completed at all.
The report also said that the Bank had failed to communicate the severity of the problem, and that the first press release sent out relating to the incident was “open to misinterpretation”. The release suggested housing transactions were being processed manually by the bank’s staff.
However, the Deloitte report did back the Bank’s staff’s decision to attempt to fix the problem rather than switch to a back-up system, but added that switching to a tested back-up would have “helped to mitigate the immediate impact on the ‘real economy’”
The Bank is in need of a better contingency plan to deal with future system problems, the report concluded.
The nine hour RTGS outage was caused by a technical configuration change from the previous weekend, which triggered an undetected design defect. This pointed to a “weaknesses in the [Bank’s] testing regime” of the UK payments system, Deloitte said.
The Bank is acting on Deloitte’s recommendations, a spokesperson said.
Barclays has signed contracts with six of the fintech startups that just graduated from its second New York accelerator programme.
Company card killer Pleo has raised $3m in new funding as it prepares for public launch in the UK and Denmark.
Cheques are become less and less common in the UK according to new research from global market research firm Mintel which claims contactless card use has overtaken cheque payments in the UK for the first time.
Payments for digital and physical goods made mobile operating system-based payments platforms like Apple Pay and Android Pay are expected to boom in the next few years according to new analysis from Juniper.