Operational Resiliency: 4 Key Requirements for Your Business Continuity Plan

Posted by Steve Gilde on March 31, 2020

In just a few short weeks, the COVID-19 pandemic has driven many financial services companies to execute their business continuity plans and test their operational resiliency. The full impact of current events will not be realized until long after they have ended, but it’s clear some organizations will survive and even thrive, while others will not.

Entire retail segments have been devastated by the mandated change in behavior toward social distancing. This decline in business has a corresponding effect on the payments industry. Acquirers, ISOs and processors who focus on the most hard-hit retail segments have also seen their transaction volumes and revenues decrease. Virtually every major card brand, network and financial institution is already forecasting reduced revenues and earnings for the current fiscal year.

Yet video gaming, streaming services, and eCommerce sellers of books and games have seen a significant uptick in business. The same for liquor stores, pharmacies, delivery and cleaning services. And, from a corporate level, solutions that facilitate remote access and collaboration for workers are currently in high demand. It seems certain that some of these changes in both corporate and consumer behavior will impact the payment industry long past the end of the current crisis.

The Future of Payments

  • Contactless payments are going to see a dramatic rise in adoption in the USA. While cash and checks are not going away tomorrow, they will definitely be impacted by changes in behavior being driven by the coronavirus pandemic.
  • Already on a steep growth curve, e-commerce, in all its various forms, is sure to expand even more rapidly. Of course, that means that e-commerce fraud will also continue to grow and evolve as well.
  • In addition to “traditional” e-commerce, expect to see a surge in subscriptions (never run out of toilet paper or cleaning supplies again), eSports, video gaming and virtual reality tours.
  • “No touch” services are sure to see an increase as we move forward. Robotic fuel pumps, self-driving cars, and drone deliveries are just a few examples here. Drive-in movie theaters may even make a comeback.
  • As the global economy begins to recover, it seems reasonable to expect a fair amount of consolidation across the payment industry. Given that some existing business plans have focused specifically on industries that have been hardest hit by COVID-19, it is likely that many will not survive the catastrophe.

Work to Be Done

In order to serve the changing marketplace and take advantage of these future opportunities, the payment industry must also continue to evolve. Some organizations have been better prepared than others to deal with the COVID-19 emergency, but I am quite certain that every financial services company will find gaps in their Business Continuity Plan (BCP) that need to be addressed before “the next time.”

  • We still see too many companies that are not taking advantage of automation when it comes to their payment channels. While there is an upfront investment required to convert from manual testing, the long-term benefits are significant – faster delivery cycles, expanded test coverage, higher quality, reduced costs. There is no downside here and automation will help your organization make improvements in other key areas.
  • We also see many organizations that have yet to integrate their payment channels with the broader enterprise. For whatever reason, it seems that the ATM channel is still perceived to be “different”, sometimes to the point that these resources are physically separated from the general corporate population. No matter what the enterprise strategy is for testing, all the payment channels should be a part of it. Open APIs make it easier to integrate disparate systems.
  • Both automation and integration will help facilitate collaboration. Most payment systems are incredibly complex. Manual testing and organizational silos certainly do not promote internal collaboration. Automation, integration and collaboration are essential requirements for companies that want to take full advantage of Agile development techniques and DevOps methodologies. Use of the cloud and virtualization technologies will continue to expand.
  • One area that has taken many organizations by surprise during this time is access. How many business continuity planners correctly anticipated that their entire staff of managers, developers, testers and QA staff would be forced to work remotely for an extended period? Testing is a mission critical activity for the payments industry, and that means resources must be able to access the test tools and systems anytime from anywhere. Look for a lot of work to be done in this area to ensure that when staff do need to work from home, they have all the hardware, software and connectivity they require to be secure and productive.

We can add “pandemic” to the list of challenges that face the payments industry, along with rapid technology change, legal and regulatory pressures, security threats, and aggressive competition. This new normal means that your business cannot stop—ever.

The rise of Agile and DevOps development methodologies means that testing is now an integral part of the delivery process. No change should ever be put into production without being fully tested and without the capability to test—everything will grind to a halt.

Because it's difficult to predict disruptive events and the impact they will have on any individual business, the entire financial services community must redouble its efforts to develop true operational resiliency and ensure that Business Continuity Plans take full advantage of the technology solutions available today. Taking the necessary steps to keep your business running during a service interruption will also provide a distinct competitive advantage when things return to normal.

 

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Topics: ATM Testing, Payments Testing, Automation, Agile, Risk, Virtualization, DevOps, Innovation