DNB strengthens resilience to geopolitical risks

DNB has frequently highlighted geopolitical risks and the need for financial institutions to deal with them. The geopolitical dynamics influencing the financial sector also have an impact on DNB. Therefore, a resilience programme was implemented to improve preparedness for incidents and escalations that could affect the performance of its core tasks, including supervision.

Various scenarios

Various scenarios were studied, ranging from hybrid threats such as cyber attacks and the disruption of logistics chains, to operational disruptions such as 72-hour power outages and economic and physical warfare. For each scenario, the impact on the economy, financial institutions and DNB's own organisation was assessed.

Several challenges in the supervision domain were identified, such as the sector's significant digital dependence on non-European IT providers, a concern DNB has raised repeatedly before. In addition, the sector is facing an increase in operational and financial risks, which could result in service disruptions and mounting credit risks. Finally, international consultation structures are under increasing pressure, potentially resulting in regulatory fragmentation and thus less effective supervision on a global scale. To address these issues, DNB is taking additional measures in supervision working in tandem with other (European) supervisory authorities.

"Geopolitical realities are changing rapidly. This affects the financial sector as well as our own organisation. We need to be prepared for unexpected escalations and be able to continue performing our core tasks even in extreme scenarios. As a supervisory authority, we expect financial institutions to take responsibility in this area as well." - Steven Maijoor, Chair of Supervision.

Change programme

In response to the current geopolitical environment, maintaining flexibility as a supervisory authority is essential. This is why DNB launched its DNB2030 change programme to enhance organisational agility and efficiency, while targeting a structural budget reduction of 10%. With respect to supervision, DNB's priorities include a more results-oriented approach, promoting a secure and innovative financial sector, and improving the effectiveness of its interactions with the sector.

Media representatives can contact Dorinde Meuzelaar by email at [email protected] or by telephone at +31 6 51 96 30 73.

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