Lack of Diversification and No Contingency Plan Can Be Catastrophic in Today's World

The Microsoft cybersecurity IT outage highlighted the need for contingency planning for all financial services industry players.

It is truly remarkable how globalized and digitalized all of the services we rely on every day have become, and the new opportunities this has unlocked. The thought of being able to buy almost anything from anywhere in the world on any device and have the package delivered to your doorstep in a matter of days or even hours would have seemed like science fiction some 30 years ago. And yet, just last year more than 1.3 billion orders were processed within 24 hours during Alibaba’s Singles’ Day, and it seemed like business as usual.

All this tech-enabled progress, however, has come at a price, which was felt by all earlier this summer. A glitch during a security update from a Microsoft cybersecurity provider precipitated a worldwide IT outage in July, disrupting payments transactions and paralyzing businesses worldwide. It was a stark reminder of how essential payments infrastructure is for everyone’s daily lives and for economies at large, highlighting the need for contingency planning for all financial services industry players and all those using their services.

Flights and check-in operations at airports in Hong Kong, Singapore, London and other global hubs were disrupted, doctors’ appointments were cancelled, shops and restaurants were forced to close their doors when systems went down and they were unable to process payments. 

In Singapore more than 10 airlines, including Scoot, Jetstar, AirAsia, and Cebu Pacific Air, were impacted at Changi Airport, causing long check-in queues, delays, and general chaos. Wider impact was felt by businesses and investors, who faced difficulties accessing the Singapore

Exchange’s post-trade system and disruptions of postal operations at SingPost. This experience highlighted the crucial need for diversification, and the danger of over-reliance on a single system or provider.

To mitigate the potentially catastrophic effects of relying on a single system or provider, we at Yuno have adopted a ‘one to many’ approach. This enables businesses to connect with multiple payment providers through a single integration, significantly reducing the risk of complete system failure. 

For example, in cloud computing, many organizations use multi-cloud strategies, leveraging services from AWS, Google Cloud, and Microsoft Azure simultaneously. This approach ensures resilience and reliability, as businesses are not dependent on a single provider.

Rapid adaptation is another crucial building block of contingency planning. During outages, the ability to quickly switch to alternative methods or providers can mean the difference between continued operations and costly downtime. Modern supply chain management systems, for instance, enable real-time routing decisions, allowing businesses to maintain operations even when primary logistics channels fail. 

Some countries are better than others at building such crisis management tools into their processes. One of the reasons why the IT outage’s impact on Singapore was less damaging than on many other regions is that many organizations in the country had already designed their systems with resilience in mind, avoiding single points of failure and having robust business continuity and disaster recovery plans. This strategic approach allowed affected services, such as airline check-ins, to recover quickly. Our platform enables real-time routing decisions, allowing businesses to maintain operations even when primary systems fail. Advanced payments infrastructure allows various industries to achieve higher uptime during global disruptions. This is similar to the energy sector, where smart grids with distributed energy resources can reroute power supply during localized outages, ensuring continuity of service.

Globalization and what it means on a local level is also an important factor to consider. The linked structure of today's systems necessitates a global view, so when one geography encounters difficulties and disruptions, another can be leveraged for things to continue to run smoothly. In manufacturing, companies like Toyota have implemented global production networks that can shift production between facilities in different countries to mitigate local disruptions.

There is of course the difference in regulatory landscapes to consider as well and this is something that can be difficult and costly for any one company to tackle on its own. Prior to joining Yuno as Chief Business Officer, I worked for some of the world's largest and most innovative organizations in the U.S., India, China and other parts of the world, including Google, Citi, Northwestern Mutual, IBM and also Alipay across several Asian markets. During this time, I saw first-hand how challenging it can be to navigate disparate regulatory regimes, even those that are geographically linked. 

Many global companies, from tech giants like Apple to financial services firms like Visa, have developed sophisticated systems to account for this hard-to-navigate diversity. They understand how to handle it, helping their operations expand across borders and localize their offering in a compliant way. This reduces the risk of regulatory issues compounding technical problems. 
As we move forward, the ability to maintain operational continuity in the face of unforeseen challenges will be a key differentiator for businesses

across all sectors. Those who embrace flexible, resilient infrastructures will be better positioned to weather future storms and capitalize on new opportunities in an increasingly digital and interconnected global economy.

The future of business operations lies not just in the ability to process high volumes of transactions or data, but in the agility to adapt to changing circumstances, the resilience to withstand systemic shocks, and the flexibility to meet diverse global needs. As we continue to navigate the complex landscape of global commerce, these lessons will be crucial in building more robust, resilient and reliable ecosystems for all