As part of its efforts to strengthen the resilience of the Latvian financial system, the Council of Latvijas Banka has adopted the Regulation on the Management of Critical Financial Services that will come into force on 1 November 2023, with a longer transition period set for certain measures.
Following the merger with the Financial and Capital Market Commission, Latvijas Banka played an increasingly important role in coordinating the availability of critical financial services, bringing together the expertise each institution had developed in this matter by the end of 2022.
The management framework for critical financial services has been updated to facilitate the availability of financial services to the people in case of a threat to national security. Additionally, it is necessary to improve the requirements and procedure for ensuring critical financial services regulated at the level of Latvijas Banka's regulations, inter alia, taking into account the recent developments:
- geopolitical changes due to Russia's military aggression against Ukraine as well as the conclusions drawn from the analysis of Ukraine's situation;
- relevant scenarios in case of a threat to national security agreed with the service providers and the competent public authorities;
- experience gained in the provision of critical financial services, including when preparing and testing the solutions for the continuity of operation.
The Regulation establishes:
- the criteria for identifying the credit institutions registered in Latvia or in any other Member State of the European Union developing a plan for the continuity of operation to ensure the availability of critical financial services and ensuring the availability of critical financial services in case of a threat to national security;
- the volume of critical financial services in case of a threat to national security;
- the requirements for developing the plans for the continuity of operation of credit institutions;
- the procedure for coordinating the provision of critical financial services in case of a threat to national security.
Critical financial services are as follows: internet banking and mobile app payments, payment card payments and ATM cash withdrawals. Swedbank AS, AS SEB banka, AS Citadele banka and the Latvian branch of Luminor Bank AS currently meet the criteria for identifying the providers of critical financial services in Latvia
Compared to the previous framework, several additional solutions to ensure the availability of critical financial services have been established:
- a requirement that obliges a service provider to ensure credit transfers not only with other service providers but also with other participants of Latvijas Banka's Electronic Clearing System registered in Latvia (all other credit institutions and the Treasury);
- additional requirements for the critical ATMs to ensure their availability in case of a disrupted power supply and unavailable data transmission services (for the introduction of this requirement, a transition period has been set until 1 January 2025);
- a new requirement related to the acceptance of payment cards, namely, the use of an offline solution for the purchase of basic goods such as food, fuel and medicinal products for a maximum total of 200 euro per customer (for the introduction of this requirement, a transition period has been set until 1 January 2025).
The Regulation on the Management of Critical Financial Services has been issued in line with the delegation established in the National Security Law.