Calling for the digital dependence of banks

Digital dependence has emerged as a significant concern for the banking sector across Europe, marking a shift in the primary risks faced by financial institutions. What once centered around the threat of bank bankruptcies now revolves around vulnerabilities within the digital infrastructure underpinning the continent's financial systems. This transformation highlights how reliance on technology—particularly cloud services and payment platforms—has introduced new layers of complexity and potential failure points into the financial ecosystem.

In 2025, the European financial landscape witnessed a substantial rise in incidents linked to digital operations. According to data compiled by the three European supervisory authorities, there were 3,383 serious incidents involving the technological and digital infrastructures of financial institutions throughout the year. This equates to approximately 282 incidents each month, underscoring the frequency and severity of these disruptions. These figures represent the first comprehensive pan-European assessment of such issues, conducted under the framework of the Digital Operational Resilience Act (DORA). DORA aims to establish a unified regulatory approach to ensure the digital operational resilience of the financial sector across Europe.

The focus of these incidents lies primarily in the technological infrastructure rather than external threats such as hacking attempts. While cyber-attacks remain a persistent issue, regulators have noted that financial institutions are increasingly encountering challenges stemming from internal technical malfunctions, system failures, and operational issues. The root cause of many of these incidents appears to be the complex interdependencies among various digital components used by banks, including third-party service providers and cloud computing platforms. When one element fails, it can trigger cascading effects that impact multiple institutions simultaneously.

The implications of this trend extend beyond individual banks, raising concerns about systemic risk within the broader financial system. A major disruption in a critical digital infrastructure—such as a cloud provider experiencing downtime or a central payment processing platform malfunctioning—could potentially affect numerous banks across Europe. This interconnectedness means that a single point of failure could ripple through the financial network, leading to widespread instability and economic repercussions.

Regulatory bodies are now tasked with addressing these emerging challenges. Under DORA, they are working to implement measures that enhance the resilience of financial institutions against digital risks. This includes requiring banks to conduct thorough assessments of their dependencies on third-party technologies and to develop robust contingency plans. Additionally, there is a growing emphasis on fostering collaboration between financial institutions and technology providers to improve overall system reliability and response capabilities during crises.

Looking ahead, experts anticipate continued scrutiny of digital infrastructure vulnerabilities as part of ongoing regulatory efforts. Financial institutions are being encouraged to invest in advanced monitoring tools and redundancy mechanisms to mitigate the likelihood and impact of system failures. As the reliance on digital platforms deepens, ensuring the stability and security of these systems will become even more crucial for maintaining trust and functionality within the banking sector.