10 December 2021

Icelandic Banks' Data Centre shifts focus to financial market infrastructure

Central Bank of Iceland

The shareholders of the Icelandic Banks' Data Centre (RB) have reached an agreement to change the focus of the company’s operations, with the objective of strengthening security and promoting greater efficacy and efficiency in the operation of financial market infrastructure in Iceland. The changes entail explicitly defining RB activities to include joint operation of systems of importance to the financial market, operation of payment intermediation systems, and operation of related infrastructure. The company will discontinue other operations by year-end 2026. As before, RB will ensure that its operations are fully in compliance with the competition law. Its profits shall be kept modest and its pricing transparent. The company’s objective is not to pay dividends to shareholders but to allocate its profits towards developing and strengthening financial market infrastructure.

In order to achieve greater synergy in the operation of joint financial market infrastructure, RB has purchased the ARK system and the SWIFT services of Central Bank subsidiary Greiðsluveitan ehf., as well as acquiring the operations of JCC ehf., the systemically important banks’ banknote vault.

In the future, RB will be solely owned by deposit-taking financial institutions and Greiðsluveitan, which administers the Central Bank of Iceland’s holding. The owners will now be direct members of the RB Board of Directors, which comprises one representative from each of the systemically important banks, one representative from Greiðsluveitan, and one independent member. Members of the Board are as follows: Central Bank Deputy Governor Gunnar Jakobsson, chair; Anna Bjarney Sigurðardóttir, Director of Operations, Finance, and Technology at the Icelandic National Broadcasting Service (RÚV); Halldóra G. Steindórsdóttir, Software Development Team Leader at Landsbankinn; Riaan Dreyer, Director of IT at Íslandsbanki; and Styrmir Sigurjónsson, Director of IT at Arion Bank.

The planned changes foster more effective policy formation and improved follow-up on development and operation of domestic financial market infrastructure, as well as more economical infrastructure development. Experience gained in recent years from the implementation of large projects in the financial system has revealed the need for such changes. Implementing change has proven overly time-consuming and costly, and Iceland is falling behind neighbouring countries in the development of certain infrastructure elements.

Alongside the structural changes at RB, the Central Bank of Iceland will establish the Forum for the Future, a forum dedicated to future policy formation for financial market infrastructure in Iceland. Deposit-taking financial institutions and the Ministry of Finance and Economic Affairs will be invited to appoint representatives to the Forum. The Forum for the Future is intended to shape the vision and priorities for optimum development of financial market infrastructure in Iceland. The Forum will conduct a baseline assessment of ideas and proposals for new cooperative projects in the area of financial market infrastructure, including an assessment of whether they entail favourable development of domestic infrastructure and whether they satisfy the requirements of competition law.

With the planned changes, the Icelandic financial system will grow stronger and domestic financial institutions will grow more competitive, both in Iceland and internationally, for the benefit of the company’s customers and consumers as a whole. The changes are in line with the priorities specified in the White Paper on a Future Vision for the Financial System, issued by the Ministry of Finance and Economic Affairs in 2018.

Press release no. 29/2021
10 December 2021