The Clearing House Automated Payment System (more commonly known as CHAPS) is celebrating its 30th birthday this year, but like so many other chaps’ big moments, the event has ended in embarrassment.
The payment system went down for around 10 hours on Monday, delaying thousands of house purchases and large interbank money transfers in what the Daily Telegraph described as “the biggest shutdown in its 30-year history”. It’s thought that the failure stemmed from weekend maintenance work to the Bank of England’s Real Time Gross Settlement (RTGS) system, during which the name of a bank on the system was changed.
Mark Carney has now launched an investigation into why one of the fundamental parts of the UK’s payments infrastructure went down for an entire working day. The “unsung hero” of the financial sector processes around 92% of all transactions between banks and according to statistics on the CHAPS company website, in September 2014 the system processed £3.2 million payments worth £5.8 trillion over 22 days. Although the backlog was cleared on Monday, for a system that is relied on for same-day payments and that handles such large volumes of high-value transactions to go down for 10 hours is clearly a severe incident.
The CHAPS system was set up 30 years ago, meaning first-hand knowledge and documentation may be hard to come by. When dealing with these older systems it is therefore vital to have a robust testing process to ensure proposed changes don’t have unforeseen – and potentially catastrophic – effects.
These days, even the shortest shutdown in payments systems can cause major issues for the organisations that run them – not to mention the problems for users of those systems. The CHAPS failure highlights once again the need for people with the project-specific knowledge and skills to resolve problems fast.