The Bank of England’s £431m project to replace its core IT system achieved value for money and demonstrated good digital transformation practice, the National Audit Office (NAO) has said.
According to the spending watchdog, the overall cost increased 15% on the £375m budget set in 2020.
It said the project, which began eight years ago and was completed in April this year, also offers lessons for other government department projects.
The real-time gross settlement (RTGS) system settles payments made on systems including the clearing house automated payments system and bankers’ automated clearing services. It has been in use since 1996, and is essential in ensuring money flows in the economy.
Planning began in 2017, but when work really got moving on the RTGS replacement project in 2019, the bank said it would switch from the then 23-year-old system in a “Big Bang” migration in 2025.
Speaking to Computer Weekly in July 2025, after the project’s completion, Bank of England CIO and technology lead Nathan Monk described the project as “a hell of a journey”.
On the publication of the NAO report, Gareth Davies, head at the watchdog, said RTGS is part of critical national infrastructure. “The Bank placed a high priority on the RTGS renewal programme combined with a low tolerance for failure,” he said. “Its careful planning and well-managed delivery approach ensured value for money, and set an example of good practice and innovation for future digital change projects.”
In 2017, the bank came up with a blueprint that set out the main goals of the system to replace the legacy RTGS, and a year later, Monk was brought on board. “The Bank of England successfully navigated complex risks and interdependencies to deliver its RTGS renewal programme, incorporating innovation and best practice in managing this digital transformation,” said the NAO.
Programme staffing peaked at over 450 staff in 2022 and 2023.
The new system sees it move away from the traditional mainframe technologies that have prevailed among financial institutions, using “more modular, loosely coupled technologies”, according to Monk.
“It’s an ecosystem of products, off-the-shelf, best-of-breed type products, and then we built the code for the core ourselves, because there’s nothing off the shelf that met our requirements or needs,” he said. “It’s going from legacy technology, embracing new technologies, but then being built through off-the-shelf products with a bespoke core.”
It went live in April this year, when the new core settlement engine was completed. “That’s the ‘beating heart’ and where all of the logic about how all the payments are settled [sits],” said Monk.
Coordinating with the finance sector was critical. The bank had its work cut out to ensure the entire industry joined it on its modernisation journey, because, according to Monk: “It’s not just us changing something, we’re having to change with industry.”
In its latest report, the NAO recommends the Bank of England prioritises maintaining and enhancing the system to maximise long-term value.
