The Reserve Bank has launched a new payment settlement system, replacing New Zealand’s inter-bank settlement system and central securities depository.
The new platform, which is nearly two years later than originally planned, replaces a 20-year-old system with two separate systems, ESAS 2.0 and NZClear 2.0.
The new platform , originally budgeted at $28 million, comprises the Real Time Gross Settlement (RTGS) and Central Security Depository (CSD) applications supplied by SIA - a European technology and banking infrastructure leader and its wholly owned subsidiary Perago.
Infrastructure support services are supplied by Datacom.
The extent of change is significant, said assistant governor and chief financial officer Mike Wolyncewicz.
“Every day, transactions with a value of more than $30 billion are settled, so there has been a focus on getting this right, and not rushing out a replacement until we were confident that it was ready," he said.
“The buy-in from the industry had been "fantastic".
The bank originally planned to sell NZClear, but failed to attract compelling bidders, forcing the bank to take on that upgrade as well.
The scope of the project was extended in late 2016, to include implementation of the NZClear system and this added a further two years to the expected timeframe, RBNZ reported to Parliament.
"The capitalised build costs will come in on budget, but the total project costs will be $1 million to $2 million more, mainly due to extended support costs of operating the new system in a pre-go live state while testing was completed."
Reseller News understands that cost has come in at $29 million.
Separately, RBNZ took a write-down, now put at $7 million, on a failed trade valuation system replacement. That project write-off was the subject of questions in Parliament's finance and expenditure committee last week (see video: questions start at 16.24).
This week’s changeover was the result of months of rigorous testing and RBNZ appreciated the cooperation of the system’s key users, Wolyncewicz said.
The Reserve Bank’s payment settlement system is used by 57 member organisations including banks, custodians, registries and brokers. This equates to around 600 users of the system, from New Zealand, Australia and Asia.
The systems replacement follows a strategic review of the incumbent payment and settlement systems operated by the Reserve Bank, completed in 2014 in anticipation of the need to align with today’s operational and technological standards.