London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

Hong Kong banks compare pandemic stress test with epidemic reality

Hong Kong banks compare pandemic stress test with epidemic reality

Last October, nearly four dozen banks in Hong Kong confronted a nightmare “stress test” scenario: a pandemic that swept through the city, followed by a major cyberattack and a telecoms breakdown.

In the simulation, a fast-spreading disease led to as much as a third of the workforce not showing up, and the electronic chaos disrupted what remained of everyday operations.

Months later, part of that hypothetical came true as the then-unnamed SARS-CoV-2 exploded onto the scene.

“The actions that we are taking to deal with the coronavirus are very close to the simulated exercise,” said one executive at an international bank who was involved in the event. “That also dealt with a cyberattack, but at this point - thankfully - we only have one crisis.”

The coronavirus has killed more than 1,300 people worldwide and infected more than 60,000, mostly in mainland China. There has been one death from more than 40 infections in Hong Kong, a financial services center with assets worth $6 trillion. About 30% of bank branches have closed.

In real life, as in the exercise, financial institutions in Hong Kong have allowed staff to work from home and dispersed others to different offices. One senior banker at a large European bank in Hong Kong said the absentee rate due to the coronavirus was much lower than in the simulation.

The banker, who is involved in forming his institution’s response to the virus, said the simulated cyber attack pushed his employer to reconsider how it handled sensitive documents when staff were working from home on less secure systems.

After the exercise, his bank sought approval from the Hong Kong Monetary Authority (HKMA) to allow more for documents to be signed digitally - and implemented that plan when the coronavirus hit, he said.

“In October, practicing for a virus seemed crazy given the political protests going on outside, but not now,” said another person involved in the exercise, which was arranged by an industry group and observed by local regulators.

Participants in the “stress test,” code-named Whole Industry Simulation Exercise, or WISE, spoke on the condition of anonymity as they were not authorized to talk to the media.


STRESS TEST

The scenario consisted of a swine flu pandemic originating in Indonesia, jumped to humans and moved to Hong Kong, followed by internet connectivity issues and a cyberattack by insiders at one bank, angry at being forced to work during the pandemic.

The four-hour long exercise - which did not pass, fail or grade participants - involved crisis-management teams from 42 banks, including HSBC, Morgan Stanley, JP Morgan and Goldman Sachs.

Teams in each bank’s offices were sent information about the evolving situation every 10 minutes.

A fourth participant, from a Wall Street investment bank, said his team had approximately 20 people and included legal, communications and technology staff, plus several chief operations officers.

As the exercise unfolded, participants were sent regular updates in the form of news videos, a “ticker” showing market movements, and social media posts - some of which contained false information.

Participants wrote news releases and policy statements to simulate their crisis communications strategies, which the other banks could see.

“The simulated exercise dealt with a scenario which was changing every five minutes, but the actual reality is a little more balanced. We are getting updates each day on how the situation with the virus is evolving,” said the first banker.

The United States and Britain have run similar exercises, called QUANTUM DAWN and WAKING SHARK, respectively.


WORKING REMOTELY

Banks in the exercise found that having staff work remotely because of the virus, while necessary, left them exposed in other areas such as cybersecurity and fraud control.

Nearly half of the participants said afterwards that they found the pandemic and absenteeism the least challenging part of the exercise on their own. But the infrastructure outage and insider cyber attack complicated matters.

“We tried to force the participants to manage a degradation of their capabilities, and then respond to a cyberattack when they already had staff working from home, had introduced social distancing and were managing potential reputational damage due to their response to the pandemic,” said Ben Wootliff, a partner at Control Risks, a consultancy that helped run the exercise.

An HKMA spokeswoman said precautionary measures taken so far amid the coronavirus outbreak “form part of the banks’ business continuity plans, which have been subject to periodic drills to ensure their effectiveness.”

Nonetheless, the bankers warned that mitigation efforts could only do so much.

“Despite all the preparedness, the real impact of the current situation will, however, depend on how long the outbreak will continue and what will be the overall impact on clients and their businesses,” said the European bank executive.

Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×