The black swan glides into view, beats its wings and sends shock waves through everyday life.
Shorthand for unforeseen — and unforeseeable events — a “black swan” occurrence is characterized by its rarity, of course, but also its widespread and severe ripple effects.
It used to be that the 2008 financial crisis was the quintessential black swan event — a perfect storm where banks, consumers, businesses and governments scrambled to address the widening fallout of the U.S. housing market. The dot-com bubble in 2000 has often been cited as another black swan.
Now comes the pandemic, where the coronavirus has spurred hundreds of millions of individuals to stay indoors, untold numbers of businesses to shutter as supply chains screech to a halt, and governments and central banks to work in concerted effort to throw financial lifelines to citizens and enterprises.
Dealing With Seismic Shifts
The nature and appearance of the black swan seemingly always changes. But the increasingly global and digital nature of the way business is done — no matter the industry vertical — brings a new sense of urgency to the need to examine lessons learned from past systemic shocks, and how they can help us deal with the present (and even future) seismic shifts.
We asked 20 payments executives, across 19 firms, about what they’ve learned over their decades of experience, how we came through past black swans and how that hard-won knowledge can help us grapple with the challenges of the COVID-19 era.
Some of these companies were born from the ashes of the financial crisis and have helped reshape the way credit and loans are offered, have influenced the way consumers control their financial lives and, of course, have helped bring commerce into the digital age.
But as the brick-and-mortar locations go dark and financial services branches close, threats of another type emerge: Fraudsters will increasingly target vulnerable populations. Some respondents told us an embrace of advanced technologies such as artificial intelligence (AI) and machine learning can help pinpoint trouble spots and telltale signs hidden within a deluge of data — and stop data breaches and account compromises in their tracks.
Risk can be mitigated through several areas of preparation, said those surveyed. It is critical for companies, particularly those in financial services, to build contingency plans, be ready to pivot and mitigate risk with payment flexibility — all in a bid to foster continuity, no matter the level of uncertainty.
From crisis, too, springs opportunity — if one knows where to look. As an example, eWallets and online marketplaces gained traction only after the swans from earlier decades in the millennium.
The current crisis may cement telecommuting, distance learning and digital payments even more firmly into everyday life across the globe, opening up new avenues of innovation and accelerating current trends once the dust settles. Instant payments, digital onboarding and omnichannel commerce (ordering items online and picking them up curbside, for example) will likely grow, according to those we queried.
It’s too soon to tell where we might be headed, as COVID-19 continues to dominate headlines and spurs companies to adopt new strategies on what seems like a daily basis. But as the 20 time-tested executives quoted in these pages can attest: We’ll get through this, stronger than ever.