On the night of 22–23 August 2026, Latvia was hit by one of the most devastating storms in its history. The damage was so extensive that, in some places, repairs to the electricity network continued until mid-September. Shortcomings were identified in a number of areas, prompting the responsible authorities to consider how to strengthen resilience to crises and improve society's preparedness for different situations. How did the financial sector weather the storm, and what lessons can we learn from it?
First, it should be stressed that this was a patchwork crisis – the damage and disruption varied across different parts of Latvia. In some regions, the only signs of a natural disaster were broken branches and the occasional fallen tree. In cities and smaller settlements elsewhere, however, power outages lasted for several days, significantly disrupting everyday life. As a result, on Sunday, 23 August, shops were operating in some places, with people able to pay by card and withdraw cash from ATMs. However, in some locations, a combination of factors made this impossible.
Overall, everyday banking services – such as money transfers, instant payments, and other services, which are normally available on Sundays – continued to operate as usual, at least in areas where electricity and communications were available and customers could access their online banking. During the storm, 183, or around one in five, of the 869 ATMs in Latvia experienced disruptions. This was mainly due to power outages.
Were critical financial services available in such a situation (namely, critical ATMs subject to enhanced requirements for ensuring their continued operation, and offline payments enabling non-cash transactions when communications are unavailable)?
Critical ATMs operate using alternative power sources (for example, a bank provides a diesel generator) and have additional connections to information systems, enabling them to communicate with the bank and dispense cash. Offline payments, meanwhile, work in a similar way to payments made during flights: the retailer must be operating and electricity is required, but a communications connection is not, and the funds are debited from the payer's account later, once communications have been restored.
During the August storm, electricity and communications were disrupted simultaneously, also affecting the operations of retailers and shopping centres. As a result, critical financial services infrastructure was able to provide support and perform its functions only to a limited extent. The most extensive damage occurred early in the night, and following disruptions to the electricity network, communications towers continued operating for only a few hours using autonomous power supply solutions. By morning, their power sources had been exhausted, leaving some areas without either electricity or communications.
This is the key lesson from the crisis at the national level: without electricity and communications, other solutions cannot function either. If retailers cannot operate, critical financial services are also unavailable. How can this be addressed? This requires a national-level solution, with priority potentially given to ensuring the operation of critical communications towers and retailers rather than critical ATMs.
What do the figures suggest about the operation of critical financial infrastructure during the crisis? Several hundred offline payments were made in shops. Most critical ATMs (77 out of 94) remained operational during the crisis, although they were mainly located in areas where no power outages occurred or where outages were resolved quickly. Only a few critical ATMs experienced an outage lasting longer than permitted under the applicable regulations. The main problems were identified with ATMs located in shopping centres, which could not be opened due to power outages and were therefore inaccessible to the public. Banks are assessing each such situation individually. At the same time, it is clear that action is needed to take the lessons from this storm into account.
Latvijas Banka has already drawn the attention of the responsible authorities to issues concerning ATM availability and proposed additional solutions. One such solution could involve essential services centres, where people could buy essential goods in one place, including by making offline card payments, as well as access cash. These centres could, for example, be set up at retail outlets or petrol stations.
They would operate alongside the resilience hubs proposed by the head of the Crisis Management Centre, where people would have access to information, first aid, communications, and other essential services. These hubs would be particularly important in situations where, for whatever reason, the nearest crisis shop would be inaccessible or people would be unable to reach it.
The lessons learned from the storm will help strengthen the country's overall resilience to crises in the coming months. At the same time, Latvijas Banka encourages everyone to continue to act sensibly and plan ahead, including by keeping some money in cash or building up savings specifically for crisis situations. Such an emergency cash reserve should be held in small-denomination banknotes and should be sufficient to cover a family's needs for one week.
It is also advisable to identify the ATMs closest to your home, including critical ATMs, in advance on the website of Latvijas Banka (the map is available here: www.bank.lv/en/services/map-of-atms-in-latvia). Information on offline payments, in turn, is available here: www.bank.lv/en/news-and-events/news-and-articles/news/17790-offline-card-purchases-have-been-introduced-by-10-retailers. It is important to bear in mind that this solution can only be used by physically inserting the payment card into a card terminal and entering the card's PIN.
For more information on critical financial services, see the website of Latvijas Banka: www.bank.lv/en/operational-areas/customer-protection/critical-financial-services.