Pragmatic Resilience

2020: a year to forget

Many people on the eve of 2020 were glad to see the back of 2019. Little did they know what 2020 would have in store.
Much of the world spent the year in and out of national and regional lockdowns with the UK implementing a seemingly ever-changing tier system. As the world adapted to working from home, technology providers were hit with an unprecedented rise in demand and the likes of Zoom, MS Teams and Slack hit the headlines with security or performance issues as their userbases grew exponentially overnight.

Whilst a Brexit trade deal was agreed at the close of 2020, existing supply chain issues have been, and are likely to continue to be, exacerbated by inevitable teething issues in the implementation of the deal.
The world’s largest economies have been decimated; the IMF predicted a 4.4% fall in global GDP in 2020 with the UK and the Euro area falling 9.8% and 8.3% respectively. Whilst the IMF’s 2021 projection is positive, it won’t restore countries to pre-COVID-19 levels and organisations will be taking a prudent stance, conserving cash and reducing costs as they face huge uncertainty for the next 18–24 months. With a backdrop of varied governmental COVID-19 responses, Brexit and the highly charged US election, geopolitical tensions continue to rise with accusations of foreign interference, disinformation campaigns and state-sponsored cyberattacks. In December 2020, the US accused Russia of a supply chain cyber-attack which led to the compromise of many US government networks. In Q3 2020, there was a 50% increase in the daily average of ransomware attacks compared to the first half of the year, and many threat actors are now extorting money from organisations not just to unlock encrypted systems and data, but also to preserve the confidentiality of their data.

High-profile victims included Travelex, Garmin and Honda, with some reportedly paying multi-million-pound ransoms. In October, the US Treasury and G7 took a much harsher stance, threatening civil penalties against organisations who made or helped facilitate ransomware payments to cyber criminals on the US sanctions list. Organisations who fall victim to ransomware and, in part, their cyber insurers, now face the unenviable dilemma of choosing between potentially astronomical manual recovery costs (if recovery is even possible) versus similarly large fines from governments.

COVID-19 was not 2020’s only crisis. Time is running out for the world to act on climate change, Black Lives Matter protests have taken place in over 4,000 cities, and the Wirecard scandal and US House antitrust report on the Big 4 tech companies are the latest in a series of events which have increased widespread distrust and scepticism of big business. As a result, organisations find themselves being pulled in opposing directions by their stakeholders. Customers and employees expect organisations to have a voice and play their part in social injustice and climate change. Investors are applying increasing pressure on the organisation’s sustainability with ESG investing (Environmental, Social and Governance) soaring in popularity, with ESG-themed exchange-traded funds topping US$100bn in total assets for the first time in July 2020. Meanwhile, governments and regulators increase oversight and regulation, requiring growing overheads to sustain compliant operations, while organisations try to remain immune to a constantly changing geopolitical backdrop.