To say that COVID-19 changed the game in terms of business practices and connectivity is a major understatement. It should come as no surprise that industry experts around the globe are working quickly to re-evaluate business practices and assess the practicality of long-term digital transformation.
In fact, a recent study found that over 90% of CFOs are actively considering making changes to their security and risk platforms to better suit this day and age. The reality is that the sudden changes posed by COVID-19 caused many companies to be caught off-guard, and many throughout the business world put all efforts into pausing as much as possible to evaluate what the future would hold. This caused a huge shift in financial readiness on the part of banks and businesses alike across the globe, and for many financial chief’s risk and trade, challenges are now at the foremost part of their mind.
A global crisis like this had not been seen in the modern era, and while so many businesses were able to shift gears as quickly as possible to embrace a digital transformation and the modern workplace that allowed them to stay online and in business while the pandemic wreaked havoc across the world, there were many who were left on the sidelines and found themselves without a clear plan of attack and a rising abundance of uncertainty about what the future may hold.
This led to a reported 60% annual increase in customer payment defaults, which meant huge trouble for the financial sector who rely on regular payments to maintain operations. This caused major cash-flow disruptions far outside of the financial sector and has led many CFOs to heavily reevaluate their current practices with credit extensions and risk assessment. In fact, as many as half of all CFOs surveyed by Euler Homes claimed that they were making plans to become more restrictive in terms of extending credit options moving forward.
Global trade requires that the entire world be prepared to engage in trade, and throughout the age of the COVID-19 pandemic, this simply was not the reality. Whether as a result of internal struggles that forced a company to shut their doors, or due to massive restrictions in global travel, many companies found that a slowdown was unavoidable.
How to bounce back from this slowdown is now the central question. There are several actions that companies should be taking to help properly assess risk in the post-COVID world, while actively taking steps to bring things as close to a new normal as possible.
Here are a few strategies that every company should keep in mind when assessing future risk:
- Push as much emphasis as possible towards maintaining collaboration with your customer base. The last thing that you want to happen is for your company to begin losing out on your supply terms, and working with your customers can help to make sure that you are staying as stable as possible during hard times.
- Be as accommodating as possible with digital services. This is a great time to begin shifting platforms over to digital-based services, as more of your employees and customers will begin to expect digital support as the norm. Being able to accommodate this can help to maintain loyalty from customers and employees alike, thereby offering some level of stability in trying times.
- Be cautious with what data you are opting to use to guide decision-making, and make sure that you are making choices that are as helpful for your business and as relevant to your customers as possible. Try gathering as many insights as possible before making any major decisions about the best steps forward.
A rapidly changing world can make it difficult to operate from one day to the next, and this is true regardless of the size of your company. Being as strategic as possible with your risk assessment can help you pave the best path forward for your company without taking unnecessary steps that may alienate employees or impact your bottom line. For guidance with making these decisions, reach out to local experts in risk assessment to receive support with making the best choices for your business.