Emil Radziszewski, Managing Director of the Banking Supervision Division, UKNF

Geopolitical tensions – especially those linked to Russia’s aggression against Ukraine, hybrid actions comprising, for example, cyber-attacks and disinformation, or incidents related to drones violating Poland’s airspace – raise questions about mechanisms securing uninterrupted access to cash for bank customers in the case of so-called crisis situations.

Giving money for safekeeping (in deposit) to a bank safeguards against the risk of losing the money due to theft or destruction, and allows greater ease in money management through cashless payments or quick transfers of even large sums at (almost any) distance. Most of the funds entrusted to banks go there immediately in a non-cash form, as a result of credit transfers on account of remuneration, invoices or cash loans. However, entrusting money to a bank always entails a certain degree of inconvenience related to, in particular, the right of physical access to cash. 

As a rule, a bank must return entrusted funds, including in cash form, whenever requested by the depositor. Such a return of cash, though, cannot be effected immediately in all circumstances. In order to withdraw cash, one must have, in particular, either a payment instrument and access to an ATM or a cashback service, or one must go to a bank outlet which offers cash services during its opening hours. In addition, significant amounts of cash can usually be withdrawn only at a bank outlet after prior arrangement with the outlet because, for security reasons, cash is stored in bank outlets in a limited amount. 

The question of ATM network and ATM availability is directly linked to ATM profitability. ATM devices are expensive both at the stage of production and operation, and the profitability of use depends directly on the number of transactions executed. An ATM is not a legally required channel of access to funds deposited in a bank, and the UKNF cannot issue binding guidelines for banks to ensure universal and easy access to ATMs. ATMs serve as a convenient alternative which is added to banks’ services. In general, ATMs are used by holders of payment instruments to withdraw relatively small amounts of cash. An ATM cannot be used to withdraw large sums or funds from an account without an assigned payment instrument or, for example, to close an active term deposit. Neither is an ATM the only channel of access to small amounts of cash for payment instrument holders, and the lack of an ATM in the immediate vicinity does not always mean difficult access to cash. Alternative solutions include cashback services offered at Poczta Polska (Polish postal services) outlets, gas stations or popular chain stores. 

At the moment, the UKNF is not identifying real serious threats related to the provision of access to funds deposited in banks. We consider the Polish banking sector and, more broadly, the payments sector to be secure, technologically advanced, very well performing in terms of fund transfer services, and at the same time properly secured, both technologically and operationally, to face crises. Regardless of their participation in advanced electronic payment systems, the vast majority of retail banks have a network of outlets providing cash services, and the UKNF requires that such services be provided at least to a minimum extent. If, however, it is particularly important for someone to have quick and direct physical access to the funds they had entrusted to a bank, they should carefully analyse the diverse offers provided by banks in this regard.

Intense and sudden extreme situations, such as blackout, extensive ICT failures (including those caused by cyber-attacks) or widespread panic caused by a sense of fear, for obvious reasons and with a high probability may hinder access to the funds entrusted to banks. This does not affect the security of those funds but the ease in which depositors can manage them. The most effective way to prevent the excessive force of the impact of such situations is to properly prepare oneself for them. In accordance with legal requirements, including those under the EU’s Digital Operational Resilience Act (DORA), banks are required to implement an ICT business continuity policy and to have documented plans, procedures and mechanisms in place, which are to ensure the timely restoration of critical functions and must be regularly reviewed, tested and audited. On the part of depositors, the most reasonable course of action in such situations is to remain calm and avoid hasty, emotionally dictated and not always rational decisions, for example to convert a safe deposit into significant amounts of cash.

In the area of ensuring continuity of access to cash, banks have learned important lessons from practical experiences related to the onset of the COVID-19 pandemic or the first days of Russia’s invasion of Ukraine and the materially increased demand among bank customers for cash withdrawals. In those extraordinary situations, the UKNF, which as part of its mandate is responsible for the safe and stable functioning of the financial market, coordinated the activities of public institutions (including members of the financial security network) and financial market representatives in various ‘thematic streams’, including the stream regarding cash supply to banks.

The topic of cash circulation security is particularly relevant for Poland’s financial security, which has been reflected by the appointment of the Cash Circulation Council, an advisory body to the Management Board of the NBP; representatives of the UKNF were included as members of the Council. The Council’s tasks include, for example, developing recommendations to minimise systemic risk in cash circulation and to enhance the security of cash circulation. The Council has developed the National Strategy for Cash Circulation Security.

As regards potential threats related to cash transactions and, more broadly, financial transactions, one should also indicate those related to disinformation and the use of information on potential difficulties in accessing cash to spread untrue information about related threats, and creating a sense of uncertainty and fear for financial security. Such disinformation can be fostered by clickbait articles and reports exploiting customer concerns, which is why it is so important that the media act responsibly and not exploit, for example, temporary unavailability of banks’ or payment operators’ transactional systems (often caused by, for example, maintenance or other temporary works, whose scope is limited and which are not related to technological failures caused by hybrid activities). The potential of this type of action can be evidenced by a piece of information that has been recently widely disseminated in the media (and picked up by disinformation accounts on social media), suggesting that Poland had introduced legal restrictions on payment transactions, which in fact referred to news published in the Mexican media and concerning the Mexican financial market. Such disinformation can also be used by criminal organisations, for example to launch a phishing campaign. Therefore, we advise special caution and proper balance when presenting facts and formulating theses in any publications regarding the functioning of the financial market, as well as maintaining distance and adhering to the principle of limited trust when drawing conclusions from such publications.