TARGET Services: advanced market infrastructure for Europe

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1 Marc Bayle de Jessé Director General Market Infrastructure and Payments Mehdi Manaa Head of Market Infrastructure Development Sylvain Debeaumont Head of Market Infrastructure Management TARGET Services: advanced market infrastructure for Europe Sibos 2017 Toronto

2 Overview TARGET Services by Marc Bayle de Jessé TARGET Instant Payment Settlement by Mehdi Manaa New RTGS services by Sylvain Debeaumont 2

3 Overview TARGET Services by Marc Bayle de Jessé TARGET Instant Payment Settlement by Mehdi Manaa New RTGS services by Sylvain Debeaumont 3

4 T2S in full operation Migration to T2S completed 20 CSDs representing 20 European markets on board An average of 550,000 transactions to be settled daily Enhanced harmonisation of T2S markets 4

5 New activities in the pipeline Enhancing efficiency and improving integration of the payment landscape Instant Payment Settlement service New RTGS services Eurosystem Collateral Management System 5

6 Main objectives INNOVATION EFFICIENCY SAFETY RESILIENCE 6

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8 Overview TARGET Services by Marc Bayle de Jessé TARGET Instant Payment Settlement by Mehdi Manaa New RTGS Services by Sylvain Debeaumont 8

9 Why a pan-european instant payment solution? Global trend towards instant payments Single currency but not always single payment method Risk to re-introduce market fragmentation in Europe Eurosystem best suited to develop pan-european solution due to experience and wide reach 9

10 24/7/365 operating hours Support compliance with SCT Inst scheme Multi-currency technical capability Settlement in central bank money Processing time within 10 seconds Operated on full cost recovery 10

11 Integrated TARGET service 11

12 will enable citizens and businesses to transfer money between each other in real time, 24/7/365 2 Service validates and makes reservation 1 Sends transaction 3 Forwards transaction Instant payment originator Participant Service Accepts 6 TIPS confirms 4 transaction 5 Service settles 7 Service confirms Participant Instant payment beneficiary 12

13 Actors in TIPS Same participation rules applied in TARGET2 (i.e. eligibility for accessing Central Bank Money) Participant Reachable Party Holds one or many TIPS accounts to send/receive instant payments Settles instant payments on a participant s TIPS account Instructing Party Instructs on behalf of the Participant or the Reachable Party 13

14 Project challenges Low latency, high volumes, high availability and resilience, scalability. 24/7/365 operations (mostly unattended): need for re-thinking of ITSM processes. Time and technical dependencies with other projects (T2-T2S Consolidation). Tight plan (both for development and procurement): 511 days to go-live 14

15 Architectures and technologies INNOVATION Change management and operational processes Processing up to 25,000 transactions per second EFFICIENCY Response time per transaction below 5 seconds Targeting a zero-incident framework Settlement in Central Bank Money SAFETY Business continuity Deterministic status transition RESILIENCE Resilience through application redundancy Self-healing application and infrastructure 15

16 Pricing policy Principles Full cost recovery High Reachability Simplicity No entry fees No fixed fees No account management/ information fees Maximum price per instruction: 0.2 eurocent [first two years] 16

17 Timeline Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Investigation phase TIPS Realisation phase User Detailed Functional Specification (UDFS) User Handbook (UHB) Connectivity Guide (CG) Development of TIPS Application Eurosystem Acceptance Testing Pilot Testing Go-live User Training sessions Contact Group Meetings July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 17

18 Keys to success Banks readiness End-to-end service availability Network providers support User-friendly apps for initiation of instant payments 18

19 Collaboration with the market Step 1 Assessing the market needs Task force on the Settlement of Instant Payments Market consultation on the user requirements TIPS on Tour across Europe Step 2 Market involvement TIPS Contact Group with 40 industry representatives 19

20 Join our #TIPSapp Challenge! Develop a mobile app for initiating instant payments Send your proposal to TIPS@ecb.int by 1 December 2017 Get a chance to present your app at an ECB event

21 Overview TARGET Services by Marc Bayle de Jessé TARGET Instant Payment Settlement by Mehdi Manaa New RTGS services by Sylvain Debeaumont 21

22 Eurosystem s market infrastructure Securities Settlement Securities settlement HVP AS High-value payments Reference Data Billing Data Warehouse Gateway Reference Data Billing Data Warehouse Gateway 22

23 Towards consolidated services Central Liquidity Management T2S Securities settlement Securities Settlement RTGS Services High-value payments HVP AS TIPS Instant payments Reference Data Common Reference Reference Data Data Shared Billing Operational Services (Billing, Billing Scheduler, etc.) Data Warehouse Data Warehouse Data Warehouse Eurosystem Gateway Single Market Infrastructure Gateway Gateway 23

24 Central liquidity management 24

25 Central liquidity management Main Account Open market Standing facilities Cash operations Intraday credit Billing All operations with Central Banks Central Bank liquidity Adjustments Securities T2S RTGS TIPS Ancillary system High-value payments Instant payments Funds dedicated to specific businesses 25

26 Central liquidity management Main Account Main Account T2S RTGS TIPS RTGS 26

27 Data analytics INNOVATION Multi-currency settlement Central liquidity management EFFICIENCY Extended operating hours Migration to ISO SAFETY Enhanced cyber security RESILIENCE Multi-network service providers 27

28 Timeline Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Investigation phase Realisation phase December 16 April 17: Interaction with users May 17 June 17: Consultation with the market July 17: Review and integration of market feedback December 17: Decision by the ECB Governing Council 28

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