The pandemic is the quintessential “black swan” event.
No one foresaw it, but businesses with disaster recovery plans have managed a transition to lockdown with minimal impact on operations. This enabled them to steal a march on competitors who spent months struggling to put plans, such as video conferencing and home working policies, in place.
With global vaccine rollouts progressing, the end of the pandemic is in sight. But businesses must plan for the next black swan and ensure that they are prepared not just to ride it out, but to embrace the opportunities it brings.
Get ready for disruption
Coronavirus wasn’t a surprise. Warnings of a repeat of the 1918 pandemic have existed for years, especially with globalisation.
Although globalisation presents unique challenges, it’s also a solution. Operating in new markets offers a wider array of threats, but also enables businesses to mitigate country-specific disruptions by opening up new trading opportunities in unaffected countries.
The pandemic came as a surprise to most governments and businesses, but the truth is that these events are predictable. Armed conflict, famines, hurricanes, epidemics, trade wars, political upheaval: we may not know when they’ll start or play out, but preparing for all eventualities can turn many, if not all, of these “black swans” white.
When the pandemic hit, businesses with remote working policies coped with lockdown far better than those without.
If working from home is an example of preparing for local contingencies, a more macro – indeed, global – response to future black swans is to open up new markets around the world.
This trend predates the pandemic. The internet gave every business the ability to trade with customers across the world as easily as if they were neighbours.
Similarly, globalisation is driving new approaches to securing talent, with the ability to hire low-cost, hard-working and highly-skilled people from abroad.
The pandemic has given extra impetus to diversify risks, reach new markets and hire the best talent from anywhere in the world, especially in the services industry. Marketing and digital agencies, consultants, web and IT developers and public relations firms – the businesses that help other businesses grow overseas – have all seen a demand boom.
But for most companies, going global is only possible once they have shattered the glass ceiling to frictionless global trade: affordable and reliable international payments.
Make the world your oyster
Every business needs a continuity plan. But whether they are a bank or a boutique, businesses seeking to expand their international footprint soon butt up against the cost and complexity of international payments.
Common transactions like managing payroll for overseas staff, paying business tax or buying raw materials soon reveal the expense of transacting across borders. When they rely on traditional methods of transferring money, businesses lose big through fees and unfavourable exchange rates, and it quickly becomes pointless to grow abroad.
That, however, was before the arrival of new international payment providers that slash the cost of transacting abroad and make global expansion financially viable.
Each day the pandemic lasts, more businesses are discovering that opening up new markets is the best single way they can prepare for current and future black swans. At MoneyNetint, for example, we’ve seen cross-border B2B payments rise by dozens of percent since the coronavirus crisis hit.
But it’s important to see payments providers in their full context.
Yes, this new breed of payment providers are smashing the glass ceiling of payments, but a good payment partner should do much more than facilitate low-cost, reliable and fast cross-border transactions. They should have a deep understanding of the unique challenges, such as regulatory rules, of operating in each market, and should have a dedicated risk consultancy department that put businesses’ new overseas expansion on the very best footing, right from the beginning.
Businesses shouldn’t expand internationally in reaction to events, but in preparation for them. Now that international payments are no obstacle, any business can start mitigating risks by expanding into new markets.
As long as you’re prepared, there’s no reason to fear the next black swan; in fact, it could be an opportunity.
Written by Yishay Trif, CEO of MoneyNetint