A hard-data wake-up call

The events and data of 2025 delivered a clear message to financial institutions in the Caribbean: resilience can no longer be treated as a supportive function. In June 2025, the International Monetary Fund (IMF) reported that major natural disasters cost Caribbean countries an average of 2% of GDP each year, and for the Eastern Caribbean Currency Union (ECCU), the impact approaches 4%. These losses illustrate why banks and credit unions must refine their continuity strategies in 2026.

The forecasts entering the 2025 hurricane season reinforced these concerns. NOAA projected an above-normal season with up to 19 named storms, including as many as 5 major hurricanes. What followed validated those projections. Even with established risk-transfer mechanisms like CCRIF SPC, the financial shock was significant. After Hurricane Beryl in 2024 produced a record US$85 million payout, the Category 5 Hurricane Melissa, which struck Jamaica in October 2025, led to an estimated US$8.8 billion in damage and triggered a new record CCRIF payout of US$91.9 million. These events showed where continuity planning remains vulnerable and now guide what institutions must strengthen in 2026.

The financial sector’s exposure is increasing

The expansion of the region’s financial system further elevates the importance of resilience. The Eastern Caribbean Central Bank (ECCB) recorded EC$32.2 billion in commercial banking assets in 2023, a 3.7% increase from the previous year. Credit unions also grew, with assets rising 7.6 % to EC$6.2 billion.

Microfinance institutions continue to advance their presence in the financial ecosystem. By 2025, Latin America and the Caribbean accounted for approximately 16% of the global microfinance portfolio (Coinlaw, 2025). These entities face many of the same operational risks as banks and therefore require similar continuity considerations as they plan for 2026.

Digital transformation is another trend shaping exposure. Public-cloud revenue is projected to reach US$1.38 billion in 2025, growing at a rate of 22.48%, potentially reaching a market volume of US$3.82 billion by 2030. As digital infrastructure becomes more deeply integrated into financial operations, resilience planning in 2026 must carefully address the dependencies created through cloud adoption, telecommunications, and cross-border data storage.

Financial institutions face complex and compounding risks

The risk landscape revealed by this year’s events demands more sophisticated planning in 2026. Hydro-meteorological threats remain a central concern, but increasing reliance on technology infrastructure, digital channels, and outsourced providers introduces additional failure points. A disruption across power, telecom, or cloud environments can cascade across institutions, especially given the region’s interconnected networks.

Supervisory bodies have already begun raising expectations. The ECCB’s updated Operational and Technology Risk Standards mandate board-approved BC/DR plans, documented RTOs and RPOs, and annual testing through live failover and table-top exercises. The IMF’s 2025 staff report further establishes BC/DR preparedness as a factor influencing capital adequacy assessments. These regulatory signals shape the standards Caribbean institutions must meet in 2026.

A structured approach to continuity planning is taking shape

The lessons of 2025 point to the need for stronger and more comprehensive BC/DR methodologies in 2026. It begins with an all-hazard risk assessment capable of modelling both climate and digital threats. Tools such as SPHERA and XSR 3.0 help institutions quantify the impact of hurricanes, extreme rainfall events, undersea cable disruptions, and ransomware attacks (NOAA, 2025).

A business impact analysis (BIA) then translates these risks into measurable operational and financial terms. The IMF’s disaster-related GDP shock parameters provide a structured reference point to support capital-planning discussions.

Dependency mapping remains an essential next step. In several Caribbean jurisdictions, multiple internet service providers rely on the same subsea cable landing stations. This creates a structural vulnerability that institutions should address in 2026 through diversified routing, satellite failovers, and geographic redundancy (CDA, 2025).

Continuity plans are evolving beyond policy documents

With clearer insights from 2025 disruptions, continuity plans implemented in 2026 must be more specific, operational, and testable. A tiered recovery structure provides needed clarity.

• Tier 0 functions, such as ATM and mobile-cash availability, require the fastest RTOs and benefit from active-active cloud replication (CDA, 2025).

• Tier 1 systems, such as the core ledger and card switches, require hot standbys in geographically distant data centres.

• Tier 2 systems, including CRM and loan-origination tools, remain dependent on disciplined backup cycles and immutable storage.

Liquidity is also an important consideration for 2026. Institutions are increasingly linking CCRIF parametric payout notifications to pre-approved standby credit lines. Automated bridge financing triggered upon payout confirmation helps maintain branch cash services after a climate event.

Testing and learning as performance expectations

Institutions that began expanding their testing cycles in 2025 must deepen and standardise these programmes in 2026. Semi-annual table-top simulations using real NOAA hurricane data enhance scenario realism and improve executive decision-making. Annual live failovers to cloud-based disaster recovery environments reveal network bottlenecks, service outages, and resource limitations that policy documents alone cannot uncover.

Cyber resilience also demands more rigorous testing. Ransomware drills that simulate data exfiltration, encryption events, and recovery from immutable backups strengthen overall incident response and increase visibility into recovery speed (ECCB, 2025).

Operational preparedness must extend beyond digital systems. Ahead of each hurricane season, institutions should coordinate branch evacuation drills, communication tests, and facility-readiness checks to align with national emergency protocols.

The future of recovery lies in sovereign and federated cloud

With significant cloud adoption already underway in 2025, the task for 2026 is operationalisation. Data sovereignty and interoperability are emerging as primary considerations. Regional providers are beginning to explore federated cloud models like Europe’s Gaia-X, allowing institutions to maintain compliance with national data laws while leveraging distributed resilience (CDA, 2025).

Zero-trust principles are now standard expectations. Multi-factor authentication, role-based access control, continuous posture scanning, immutable object storage, and cross-region backups form the foundation for secure and compliant cloud environments in 2026.

Resilience as strategic capital for 2026

The lessons of 2025 provide a clear roadmap for strengthening continuity capabilities in 2026. BC/DR is now a strategic function that directly influences customer trust, institutional reputation, capital adequacy, and access to correspondent banking relationships. Institutions that invest in more vigorous continuity testing, sovereign-compliant cloud infrastructure, and more detailed operational planning position themselves for stronger recovery outcomes and increased investor confidence.

The region enters 2026 with an opportunity to deepen resilience and set a higher standard for operational continuity. Through deliberate investment and sustained governance focus, financial institutions can transform continuity from a regulatory requirement into a defining strength of the Caribbean financial system.