Banks in Europe are preparing for planned blackouts and energy rationing as Russia cuts off mainline gas supplies to the region.
Power outages pose a huge risk to the complex systems banking and other industries rely upon, including the data centres they use to store vast amounts of essential data.
“The banking system is part of other systems,” Gianluca Pescaroli, professor in operational continuity and disaster resilience at University College London, told Reuters. “My main concern is the cascading effects on society of failures to ATMs or cashless transactions. Similarly, the dependencies banks have on other services such as the internet.”
A source at JPMorgan has confirmed that the bank will be stress testing power cut scenarios, including the use of generators to ensure the ATM network remains functional for customers.
Deutsche Bank is implementing energy-saving measures across its network of 1,400 buildings in Germany, including limiting the use of hot water and ensuring all lighting is switched off overnight.
Unicredit, based in Italy, has also confirmed it has reassessed its operational resilience plans over the summer, highlighting its reliance on data centres which are supplied by two independent power stations.
The energy crisis has highlighted the need for regular stress testing, says RiskBusiness CEO, Mike Finlay. “Western nations are not as used to power outages as some less-economically developed regions and so the full potential impact on banking systems may not have been fully considered.”
“The risks posed by energy shortages in Europe and elsewhere are now very real and contingencies must be considered as part of the wider operational resilience plan. Do you have access to enough generators? Are you able to log transactions if the system goes offline? How long will these contingency measures last? All of these questions and more need to be considered. It’s also possible that outages could last considerably longer than what has been stress tested before, so banks need to take a fresh and detailed look at this scenario.”