24/7 Money: The End of Business Hours for Commercial Banks
The way commercial banks operate is being disrupted by the increasing use of instant payments and continuous settlement systems. Banks are no longer able to rely on traditional business hours, as customers expect their money to move quickly and efficiently around the clock.
This shift has been driven in part by regulatory changes, such as the EU Instant Payments Regulation, which requires payment service providers to receive and send instant euro payments within certain timeframes. In the euro area, for example, an average of 2.735 million euro instant payments were settled per day in 2025, with a total value of €792.8 billion.
The European Central Bank's TIPS platform has been settling instant payments in central bank money 24/7/365 since its implementation. The Federal Reserve's FedNow Service is designed for uninterrupted 24/7/365 processing, and India's RTGS system has been available around the clock since December 2020.
The shift to continuous settlement presents challenges for commercial banks, particularly in terms of liquidity management. Banks must now hold larger buffers of central bank money to ensure they can fund and settle payments quickly enough. This can be a costly exercise, especially for smaller institutions that may not have the resources to maintain such large cash reserves.