In today’s new world order, the most obvious threat is no longer weapons of mass destruction or climate change, but rather a virus. Some are even speculating that compared to the 2008 global economic crisis, dubbed a financial heart attack, this one might be a full-body seizure. It’s a scenario no one imagined and not many prepared for.
As the digital world is literally crashing around us, enterprises and governments are scrambling to meet the demands of citizens looking to cancel a flight, order their groceries on-line or file for unemployment due to COVID-19.
The New York Department of Labor website
Many websites are experiencing downtime, or at the very least radical speed declines, unlike ever before. Far from the one-day glitch during holiday peak loads, such as Black Friday/Cyber Monday traffic, companies today are dealing with ongoing site crashes and supply chain issues affecting their ability to deliver on the business continuity promise.
Gartner says that based on industry surveys, network downtime can cost $5,600 per minute on average. This figure equates to well over $300K per hour. In other words, time is money.
As the future feels uncertain, many organizations need to try and mitigate the extremity of this pandemic with a reliable infrastructure that can ensure high availability and scale.
A New Reality for Financial Services
The New York Stock Exchange temporarily closed its historic trading floor and moved fully to electronic trading after two people tested positive for coronavirus infection at screenings it had set up. The stock market has closed at times over the years, such as during World War II and in the wake of 9/11, but this is the first time the physical trading floor of the Big Board has ever shut independently while electronic trading continues.
With volatile trading patterns, financial institutions are under pressure to handle the unexpected peaks and added load to comply with trade reconciliation and risk management requirements. Depending on the infrastructure being used (legacy platforms such as mainframe), scaling to new levels can be extremely expensive; adding additional strain to IT budgets.
Those who have modernized their architecture, leveraging infrastructure that is elastically scalable, are handling the loads in a seamless manner without the overhead of over-provisioning. Avanza Bank in Sweden is a great example of a completely digital bank whose operations are running on modern architecture and are meeting their customers’ requirements during this volatile period.
Avanza Bank records huge peak loads compared to previous spikes triggered by Brexit and other events
As the stock market continues to fluctuate, consumers may be less keen to invest their savings in the stock market, impacting digital wealth managers that conventionally make money by charging customers fees that are a percentage of assets under management. On the flip side, more consumers might seek out savings options for their money, as a less risky way to build their wealth, so platforms like Goldman Sachs’ Marcus may see an uptick in demand as a result.
In the meantime, banks are working round-the-clock to ensure all digital channels are up-to-date and have all the information that people may need during this period. Most of the services that banks offer are available online. Customers are using their mobile and online banking channels for services, and the banks must be ready to handle the new norm of unplanned peak loads.
The outbreak has also affected how we think about cash transactions.The World Health Organization (WHO) is recommending that consumers pay contactlessly rather than with cash, if possible, as a means of limiting the virus’ spread through microorganisms on cash. Measures to restrict cash, combined with mounting concern that might push consumers to heed the WHO’s advice, could boost non cash payments, which we already expect to grow at a 10.5% CAGR from 2019 to 2024—particularly if similar measures are implemented in markets with heavier cash usage.
COVID-19 and the Travel Industry
A reduction in the demand for travel combined with government-imposed travel restrictions has forced some airlines to temporarily suspend operations. U.S. Airlines, for instance, are seeking more than $50 billion in government assistance, as they also consider halting all domestic flights.
Airlines are currently experiencing website glitches for bookings and ticket changes as customers around the world are looking to change their flights. Many customers who have booked travel through online travel agencies have been experiencing difficulties either connecting with travel advisors or cancelling and changing plans directly on these sites.
Teams at Expedia, Travelocity, Orbitz and CheapTickets are working around the clock with their travel partners to process an unprecedented number of customer requests, but despite best efforts they’ve encountered some technical issues.
Travelocity asking customers to delay calling due to overwhelming increase in service requests
The retail industry is already in the midst of unprecedented downsizing, as 2019 brought with it record store closures – and it’s only going to get worse. The supply chain, which we’ve grown so accustomed to, where you can go online and get something cheap delivered to your doorstep in as little as 24 hours, is no longer possible.
There are cracks in the infrastructure and legitimate issues within China, where it was the epicenter of the virus, originally, where all these factories are. Amazon, for example, has suffered a wave of delivery delays and product shortages due to the recent demand surge, as they plan on hiring 100,000 new warehouse and delivery workers to keep up.
All types of websites and content providers are experiencing technical difficulties. Online supermarket providers are hit by coronavirus panic-buying as Ocado website goes down, Asda shoppers struggle and Tesco delivery slots are booked up days in advance.
Message displayed on the Ocado website
Even the New York Metropolitan Opera’s website crashed just last week as tens of thousands of people attempted to simultaneously stream George Bizet’s Carmen.
Online shops such as social networks and video streaming services are facing big surges in usage as the coronavirus forces millions around the world to stay home. In Europe, Netflix, Youtube, and Amazon Prime have elected to slow down streaming in order to reduce network bandwidth.
One major prediction is that eCommerce is likely to grow as consumers eschew physical stores and crowded gathering places, though this will inevitably create logistical challenges. According to Coresight Research data, over a quarter (28%) of US internet users are already avoiding public areas or travel, and 58% plan to if the situation worsens.
A decline in brick-and-mortar retail, which comprises over 85% of US retail sales, could shift day-to-day shopping to digital channels, like Amazon or other e-tailers. Further, it could bolster use of omnichannel commerce. Such a surge in demand for e-tail could overwhelm logistics providers and workers, which might require ecommerce companies to revisit their strategies for order fulfillment and delivery, including potentially slowing down fast-shipping strategies, in order to keep up with surging demand and keep workers safe.
Healthcare Systems are Overwhelmed
Telemedicine companies are struggling to serve ‘extreme volumes’ of patients as coronavirus calls surge. Hospitals say their technology tools are breaking down, as huge volumes of people try to consult with a doctor about their symptoms.
Meanwhile, Google’s coronavirus website keeps crashing. The website was built to help residents into California counties schedule coronavirus screening tests, but currently the website is not accepting any applicants.
Project Baseline website
So where do we go from here?
The novel coronavirus has changed our life profoundly. Gideon Lichfield, MIT Technology Review’s editor in chief argues that as we radically change our way of life – how we work, exercise, socialize, shop, manage or health, educate our kids, most of us don’t realize that some things will never be back to normal.
The Economist predicts it will probably cause the most brutal recession in living memory. And with a large portion of the world’s population under some sort of a lock-down, businesses experience drastic changes. Many are not fully prepared for this new normal, and the consequences can be dire. Are you?