Disruption was caused yesterday, both in stores and in citizens trying to make payments through terminals or transfer money digitally.
The reason? A serious damage to Google's infrastructure, which resulted in the paralysis of key Revolut services.
Digital bank users experienced difficulties in accessing their accounts, card payments, money transfers and cash withdrawals, while problems were also recorded in other European banking and online services. For Cyprus, however, this damage was of particular importance.
Not because Cypriot banks have been affected, but because Revolut has gained a particularly large presence in the daily transactions of the inhabitants of Cyprus. In fact, the numbers presented by the company itself are indicative of the degree of its penetration in the Cypriot market and in essence the dependence that can arise from such digital services. Specifically, according to its official website, Revolut has 450,000 users in Cyprus, a number that can be described as particularly large in relation to the size of the population of Cyprus.
This, however, does not mean that Cypriots have abandoned traditional banks or that they have been left without alternative options during yesterday's problem. On the contrary, despite the serious problems they faced in their transactions through Revolut, they do not seem to have been fully exposed, since most still hold accounts and cards in domestic banks, thus being able to be served by different banking channels.
Safety valve
And this is precisely where perhaps the most important conclusion of yesterday's disruption lies and the reasons why it did not turn into a real panic: The high penetration of a digital bank in the market does not necessarily mean complete dependence of consumers on a single service. Yes, the numbers demonstrate the dynamics of Revolut in the Cypriot market, but the maintenance of parallel bank accounts in Cypriot banks seems to have acted as a safety valve in case of a problem.
In fact, this proves something extremely important, which was explained at the Forbes Cyprus Next Gen Banking & Fintech Summit, organized about a week ago.
They do not depend solely on
The distinguished Cypriot professor of London Business School, Costas Markides, who was the keynote speaker of the Forbes Cyprus conference, had addressed an almost prophetic question to the delegates. A question that after yesterday's problem becomes particularly important and explains why Cypriots may have been surprised when they found that they could not carry out transactions through Revolut, but were not left exposed in terms of their debts.
Specifically, Mr. Markides had asked the participants in the conference to raise their hands those who had a Revolut account. Several responded, possibly including the vast majority of those present.
But then he asked them to keep their hand raised only by those who did not have an account with a traditional bank. Of the many hands that were initially raised, only one was left up.
The central meaning? Cypriots may have dynamically adopted, as in other countries, the new technologies and services of fintech companies, but these do not seem to have replaced traditional banks, in which consumers continue to trust a significant part of their money, their accounts, as well as their e-wallets and digital services.
Revolut and other similar digital platforms have managed to enter the daily lives of Cypriot consumers, but as it was shown in the best way yesterday, they do not seem to be the only option for Cypriot transactions.
Essentially, yesterday's failure highlighted two different realities. On the one hand, the extent to which digital services have gained a large part of daily transactions and on the other hand, the importance of maintaining other banking options, so that a technical problem does not entail financial suffocation at the same time, even if it is temporary.
Electrical failure in London behind the problem
The problem caused yesterday in many countries around the world appears to be due to an electrical failure in London, according to a Google announcement, which confirmed widespread disruptions recorded in Google Cloud services, affecting the operation of banking and other online platforms.
According to Google, the failure occurred in the "europe-west2-b" zone, causing high error rates and occasional interruptions in network operation.
For its part, Revolut had confirmed since the morning that it had experienced problems in its services, with the company linking the paralysis of its systems to a failure in Google Cloud from the initial stage, which was later confirmed by Google itself.
In addition to Revolut, there had been hundreds of reports of problems with the Downdetector platform and other services, including British banks Lloyds and HSBC, the real estate website Rightmove and the Royal Mail postal service.
