What Happens to Commercial Banks When Money Moves 24/7?

The payments clock is becoming continuous. The harder transformation is making bank liquidity, risk controls and operations continuous as well.

Banking has always relied on the fiction that a day ends. Ledgers close, treasury desks square positions, settlement systems pause, technology teams use overnight change windows and a new value date begins. Customers increasingly live by a different clock. In a growing number of markets, bank money can be pushed in seconds at 02:00 on a Sunday, even while the institutions funding, screening and supporting those payments still organise themselves around business hours.

That mismatch is moving from edge case to core infrastructure. The European Central Bank’s TIPS platform settles instant payments in central bank money 24/7/365. The Federal Reserve’s FedNow Service is designed for uninterrupted 24/7/365 processing. India’s RTGS system has been available 24/7/365 since December 2020. At the wholesale end, the United States and United Kingdom are extending large-value settlement hours, while tokenisation projects are testing a world in which commercial-bank deposits and central-bank reserves can settle on programmable platforms around the clock.

The central question is therefore not whether payments can move 24/7. It is whether a commercial bank can fund, control, reconcile and survive them 24/7. Always-on money does not abolish liquidity risk, fraud, operational risk or the need for central-bank money. It removes many of the scheduled pauses banks historically used to manage those risks.

The customer clock has already changed

Europe shows how quickly a regulatory change can turn instant payment from a niche service into a default expectation. Under the EU Instant Payments Regulation timetable published by the ECB, euro-area payment service providers had to be able to receive instant euro payments by 9 January 2025 and send them by 9 October 2025. Charges for instant transfers cannot exceed those for corresponding standard transfers, and verification of payee became mandatory in the euro area from October 2025. In other words, speed is no longer simply a premium product that banks can choose to offer selectively.

The volume data show the operational consequence. According to the ECB’s TARGET Services Annual Report 2025, TIPS settled an average 2.735 million euro instant payments a day in 2025, with average daily value of €2.2 billion. Total euro value settled through TIPS reached €792.8 billion for the year, up 179.7% from 2024. The platform still handled mostly retail payments, but 445,961 transactions exceeded €100,000 after the scheme-level value cap was removed, a sign that corporate use is beginning to matter as well.

The United States is earlier in the adoption curve but moving quickly. Federal Reserve Financial Services data show FedNow settled 4,997,811 customer credit transfers in the second quarter of 2026, up 83.2% from the previous quarter, with total value of $274.7 billion. The average transfer was $54,957. The figures are still small relative to the full US payments system, but they demonstrate that a 24/7 service is becoming meaningful infrastructure rather than a laboratory.

The 24/7 shift at a glance

Liquidity becomes a round-the-clock inventory problem

The most important effect of 24/7 money is easy to miss because it happens behind the customer interface. A bank can promise an instant payment only if it has the right settlement asset, in the right account, at the right time. When payment rails remain open after wholesale money markets or other funding channels close, liquidity has to be pre-positioned, transferred automatically or held in larger buffers.

The euro-area experience provides unusually direct evidence. The ECB’s 2025 TARGET report says average liquidity left overnight in TIPS rose from €26.9 billion in January 2025 to €73.4 billion in October, when the instant-payments obligations were fully implemented, and reached €88.8 billion in December. Participants were effectively keeping more cash inside the always-on settlement environment so they could continue funding payments when the main T2 wholesale system was not open.

That can be prudent, but it has a price. Liquidity parked for resilience cannot simultaneously be deployed elsewhere. The trade-off is especially relevant for smaller institutions, which may have thinner buffers or depend on correspondent banks for settlement. A 24/7 payment service can therefore shift economics from transaction processing toward liquidity access: who can hold enough central-bank money, who can move it between accounts automatically and who has a correspondent willing to do the same?

Basel regulation already recognises that time matters. The Basel Committee’s intraday liquidity framework was created because the Liquidity Coverage Ratio does not capture intraday liquidity in its calibration. The Committee’s consolidated liquidity-risk principles require banks to understand key payment times, available collateral and expected flows, and to monitor intraday positions against available resources. In an always-on environment, “intraday” starts to look less like a business-day concept and more like a continuous one.

ANALYTICAL INFERENCE

As settlement hours expand, the strategic advantage in payments shifts from offering the fastest customer interface to managing liquidity most efficiently across rails, currencies and time zones. Speed becomes commoditised; liquidity orchestration becomes the harder capability.

The dangerous mismatch: instant outflows, scheduled funding

The same infrastructure that improves convenience can also compress the time available to respond to stress. Faster payments do not cause bank runs; confidence, solvency concerns and deposit concentration do. But once a run begins, digital banking lowers the mechanical friction involved in moving money.

The Financial Stability Board’s study of the March 2023 banking turmoil found that technological advances had made deposits easier and faster to transfer and that the three fastest recent runs in its sample saw outflows of roughly 20%–30% in a day. The FSB has separately highlighted the need for resolution authorities to be prepared for the increased speed of runs associated with mobile banking and 24/7 payments.

Always-on payments can make this a weekend problem. If customers can transfer balances continuously while a bank’s treasury desk, securities markets or emergency-funding workflow is operating on a narrower schedule, the institution may face a temporary but dangerous asymmetry: the liability can leave before new liquidity can arrive. The correct conclusion is not that banks should slow customer payments. It is that contingency funding, collateral mobilisation, supervisory escalation and central-bank access need to be designed for the same clock as the outflows.

There is an important counterargument. More continuous wholesale settlement can also reduce risk by allowing obligations to be discharged sooner instead of accumulating over a weekend. The Bank of England’s 2026 consultation on near-24x7 RTGS and CHAPS explicitly argues that longer hours can support more frequent net settlement, lower prefunding needs and reduce settlement risk. The policy challenge is therefore not simply “more hours equal more risk”. It is whether liquidity provision and risk management expand at the same pace as payment availability.

Treasury can no longer be a business-hours function

For commercial banks, this is an operating-model change before it is a technology change. A payment system can be technically available 24/7 while the bank’s internal treasury, fraud, sanctions, reconciliation, customer-service and incident-response teams remain organised around regional days and overnight batches. That gap is where hidden risk accumulates.

A genuinely always-on bank needs continuous visibility into settlement-account balances, automated liquidity thresholds, pre-positioned collateral, limits that can change in real time and clear escalation when flows deviate from expected patterns. Larger groups can use follow-the-sun treasury coverage across regions; smaller banks may rely more heavily on correspondents, service bureaus or pre-funded buffers. Either way, the operational promise to the customer has to be matched by a funding promise inside the institution.

The accounting clock becomes more complicated too. The Bank of England’s consultation notes that near-continuous settlement forces a decision about where one value date ends and the next begins, because interest calculations, end-of-day balances and same-day settlement conventions still require a temporal boundary. It also highlights staffing, change management and the availability of liquidity as key implementation questions. A bank may stop closing its payments channel, but it cannot stop needing controlled maintenance, valuation cut-offs and governance.

Fraud control has to move before the payment

Instant settlement also changes the economics of fraud. Finality is valuable because the receiving bank can use the funds immediately; it is dangerous because the window for recalling a mistaken or manipulated payment can be extremely short. The traditional model of detecting suspicious activity after a batch is processed is poorly suited to a payment that settles in seconds.

Regulators and infrastructure providers are responding by shifting controls earlier in the transaction. The EU Instant Payments Regulation requires verification of payee before both standard and instant euro transfers, while its sanctions-screening design requires payment service providers to check customers against targeted financial restrictive measures periodically and at least daily. In the United States, Federal Reserve Financial Services launched a FedNow network-intelligence API in 2026 that gives sending institutions receiver-account information observed over the network to support risk assessment before an instant payment is released.

The trade-off is familiar: stronger pre-transaction controls can reduce losses, but aggressive blocking can generate false positives, delay legitimate commerce and undermine the promise of instant payments. The winners will not be the banks that simply insert more manual checks. They will be the banks that can make high-quality risk decisions at machine speed and reserve human intervention for the small number of cases that genuinely require it.

Wholesale central-bank money is catching up — unevenly

Retail payment availability has moved faster than wholesale settlement in many advanced economies. That is beginning to change. The Federal Reserve announced in October 2025 that Fedwire Funds and the National Settlement Service will add Sundays and weekday holidays, no earlier than 2028. Fedwire will remain open 22 hours on each operating day, moving from a five-day to a six-day week. The Board has left open the possibility of a future seven-day expansion.

The United Kingdom is taking a staged route. Under the Bank of England’s current roadmap and 2026 consultation, CHAPS will open at 01:30 from September 2027 instead of 06:00. The Bank proposes adding a weekend settlement day and some bank holidays no earlier than 2029, moving to 22x6 no earlier than 2031, and ultimately considering 22x7 or 23.5x7. The consultation closed on 10 August 2026; final sequencing will depend on industry readiness and policy choices.

The euro area is also examining longer T2 hours. The Eurosystem’s 2026 payments strategy says it will continue investing in T2 and explore extending its operating hours, partly because 24/7 instant payments create liquidity challenges when the wholesale RTGS system is closed. India offers a useful contrast: the RBI’s RTGS has already operated 24/7/365 since 2020, demonstrating that large-value central-bank settlement does not inherently have to stop for nights and weekends.

The unevenness matters for cross-border payments. A bank can only deliver true around-the-clock cross-border finality when the relevant currencies, correspondents and settlement systems overlap. The BIS CPMI’s 2026 monitoring survey identifies extended operating hours and payment-system interoperability as foundational to improving cross-border payments. Until those clocks line up, banks will continue to bridge gaps with prefunding, correspondent balances and operational workarounds.

Tokenised deposits remove another closing time

The next step is not simply faster versions of today’s rails. Tokenisation could allow money and assets to move on common or synchronised programmable platforms, reducing the sequence of messages, reconciliations and manual interventions that make wholesale settlement slow.

The BIS and IIF’s Project Agorá report published in May 2026 demonstrated a prototype in which tokenised commercial-bank deposits and tokenised central-bank reserves can support atomic, multi-currency wholesale cross-border settlement. The BIS says such a system could operate around the clock if implemented. That is a different proposition from a retail instant-payment overlay: the bank’s own deposit liability and the settlement asset could exist on programmable infrastructure designed for continuous use.

Atomicity can reduce principal and settlement risk because linked legs complete together or not at all. It does not make liquidity free. Indeed, making settlement more immediate can increase the importance of having the right asset available at the precise moment the transaction executes. The BIS Annual Economic Report 2026 therefore stresses that tokenised rails still need robust resilience, interoperability, timely redeemability into central-bank money and elastic liquidity provision. The lesson is simple: programmable money changes the workflow, not the economic need to fund it.

Does 24/7 make banks safer or more fragile?

Both arguments have merit. The safer-system case is strong. Shorter settlement lags reduce the amount of time banks are exposed to one another. More frequent wholesale settlement can reduce obligations that accumulate overnight or through long weekends. Better real-time data can give treasurers a clearer picture of cash positions, while extended RTGS hours can reduce the amount of liquidity trapped in prefunded arrangements.

The fragility case is equally real. Continuous payment availability shortens the reaction time during a deposit run, increases the number of hours in which cyber or operational incidents can affect customers, and leaves less obvious downtime for system changes. An outage at a critical cloud, telecoms or payment provider at 03:00 on Sunday is still an outage, and the bank remains accountable for customer impact even if the relevant vendor is external.

That is why the Basel Committee’s operational-resilience framework treats critical operations, business continuity and third-party dependencies as core prudential issues. An always-on bank is not one that never experiences failure. It is one that can continue critical services, contain disruption and recover without turning an operational incident into a liquidity or confidence event.

The most accurate conclusion is that 24/7 payments can make individual transactions safer while making institutions less forgiving of weak operational design. Settlement risk may fall even as liquidity, cyber and execution risk become more time-sensitive. Banks have to manage both sides of that equation.

What this means for banks, fintechs, regulators and investors

For banks, the strategic mistake is to treat instant payments as a front-end product. The real investment is in continuous treasury, automated liquidity movement, resilient core processing, real-time fraud controls and 24/7 incident response. The institutions best positioned to benefit will be those that can make money available instantly without holding wastefully large buffers or relying on fragile manual processes.

For fintechs and payment companies, always-on access does not eliminate dependence on bank balance sheets and settlement assets. A fintech can create a superior interface, but someone still has to hold liquidity, access central-bank money directly or indirectly, manage returns and disputes, and absorb the cost of round-the-clock controls. As non-banks gain more direct access to payment systems in some jurisdictions, that boundary will blur, but the economic burden of safe settlement will not disappear.

For regulators and central banks, the clock of supervision and crisis management has to move closer to the clock of the market. That means better intraday and weekend liquidity visibility, operational readiness to mobilise collateral, resolution playbooks that work outside office hours and payment-system designs that preserve access to central-bank money as private rails become continuous. It may also require a fresh look at whether existing liquidity assumptions remain conservative enough when deposits can move faster than the frameworks were calibrated to expect.

For investors, 24/7 banking changes what operational quality looks like. Deposit concentration and uninsured funding still matter, but so do the mechanics: how quickly a bank can see outflows, move collateral, access settlement liquidity, control fraud and recover from an outage. Inference from the current infrastructure build-out suggests that the durable competitive moat may be less about owning a proprietary payment rail and more about combining a trusted deposit franchise with superior liquidity automation and operational resilience.

Conclusion: the bank never closes — but risk still needs a clock

Commercial banking is moving from a world of scheduled settlement windows toward one of continuous financial activity. The shift is already visible in Europe’s instant-payment rules and TIPS liquidity, in FedNow’s rising volumes, in India’s 24/7 RTGS, and in the United States and United Kingdom extending wholesale operating days and hours. Tokenisation is likely to push the boundary further by making commercial-bank money itself programmable and potentially always available for wholesale settlement.

The transformation will not make banking frictionless. It will relocate the friction. Instead of waiting for the payment rail to open, banks will have to manage liquidity continuously. Instead of detecting fraud after processing, they will have to decide before settlement. Instead of using the weekend as a recovery window, they will need resilience that works through the weekend.

The institutions that thrive will not simply be the ones that move money fastest. They will be the ones that can make financial decisions, liquidity and controls move at the same speed as the money.

References

1. European Central Bank — TIPS facts and figures

2. European Central Bank — TARGET Services Annual Report 2025

3. European Central Bank — Instant Payments Regulation

4. European Central Bank — The Eurosystem’s comprehensive payments strategy

5. Federal Reserve Board — FedNow Service

6. Federal Reserve Financial Services — FedNow Service volume and value statistics

7. Federal Reserve Financial Services — FedNow Network Intelligence API

8. Federal Reserve Board — Expanded operating days for Fedwire Funds Service and NSS

9. Bank of England — Extending RTGS and CHAPS settlement hours: next steps towards near 24x7 settlement

10. Reserve Bank of India — Real Time Gross Settlement System FAQs

11. Bank for International Settlements — Project Agorá: a shared programmable platform for wholesale cross-border payments

12. Bank for International Settlements — Annual Economic Report 2026

13. BIS Committee on Payments and Market Infrastructures — Enhancing cross-border payments step by step: insights from the 2025 monitoring survey

14. Basel Committee on Banking Supervision — Monitoring tools for intraday liquidity management

15. Basel Committee on Banking Supervision — Liquidity risk management and supervision

16. Basel Committee on Banking Supervision — Operational resilience

17. Financial Stability Board — Depositor behaviour and liquidity risk: lessons from the March 2023 banking turmoil