Written by Ericson Chan, CEO at Ping An Technology.
Ericson Chan is the Chief Executive Officer of Ping An Technology, the largest integrated finance group in China. He is also a former CIO of China at Standard Chartered and an active Board Member at CFTE. He has assisted a number of Fintech start-ups to scale their operations and has led the development of Fintech start-ups within the Ping An Group. Ericson is committed to improving efficiency and productivity while delivering customer-centric values and services as banking products and services get more commoditised and disrupted.
Regardless of how one interprets the statistics of the COVID19 pandemic—the fact is that the global economy has taken a significant beating with the COVID19 health crisis.
After all, we have witnessed the significant value destruction created on large pools of financial assets. Private investments are practically being all put on hold. Fortunately, the banking system hitherto seems to be stronger than it was in 2008 and financial institutions are still holding up so far on the first order of impact—cue many banks positioning themselves as noble liquidity providers during these difficult times.
However, it’s really a matter of when, and not if, the credit problem arrives from various industries like a tsunami. It looks inevitable that the airline and F&B industry, especially in Europe will be forced to shut down for good, because of their low cash positions. The extended low NIM environment we have been experiencing will also put a lot of pressure on banks. While QE will provide temporary relief, the global economy experiencing a U shape or V shape rebound is still too early to tell.
Meanwhile, this global lockdown that the economy is facing will look to open up and change many industries quickly—with most of them being enabled by advanced technologies. As a general overview, it seems obvious that Health Tech will be the focus for years to come with investments already piling in. For Health Tech, it is certain that growth will go across every aspect from proactive well-being management; health monitoring; diagnostic technologies and even to drugs and treatments. Telemedicine and biogenetic will similarly get another boost.
But of course, beyond healthcare, many things are also bound to change.
 Social Contract for Data Privacy
There is a growing number of countries like Israel, South Korea, China are combating COVID19 with rigorous contact tracing. How this is done is leveraging on everyone’s geolocation and online activity to subsequently monitor and control the spread of the virus.
For now, how this will impact privacy is still uncertain. Yet, the fact is that it opens a whole new can of worms on data privacy under the humanitarian banner.
Many governments are now insinuating that digital contact tracing will need to last for at least 2 years until a vaccine is fully available. AI and big data will also be more critical than ever before, especially for impact analysis and forecast. Further, surveillance types of data will be used more widely, more frequently and in a more granular manner.
 Deglobalizing Supply Chain
Yes, the world is a well-oiled supply & demand machine but is also a giant black box.
No one can identify the whereabouts of the inventory 2 levels upstream or the stocks 2 levels downstream today, which has caused supply chain disruption. For example, a hundred tons of rock lobsters had to be released back to the ocean in New Zealand while tons of strawberries rot at the Chilean dock because the supply chain to Asia is currently broken. The threat of famine is real—and not just because of crop sowing disruption.
If there exists a contractual guarantee of supplies with secure capacity, it will help the suppliers to secure loans and to manage liquidity better. However, it will not help downstream manufacturers when demand surges simultaneously from all fronts.
Today, suppliers do not want to reveal their true capacity and retailers do not want to reveal their true demand. This needs to be changed. While there are predictions that the supply chain will transition from being global to regional/national in the future, traceability is still essential. This is where Blockchain and IOT will dramatically improve the traceability of the supply chain from end to end.
 An Online First Social Norm
With COVID19 and social distancing at a forefront, eCommerce has been a haven for many, including first-time customers. Sales pattern has also altered dramatically with the industry witnessing a skyrocketing demand for house paint and bread machine.
As social media usage surges amid lockdown, social commerce capabilities are set to become an important piece of brands’ eCommerce strategy, especially in the US and in China. Networking becomes virtual. Even social events, like birthday parties, are now online.
All of the above is set to drive cloud usage from an IaaS capacity to a PaaS adoption. The pandemic has sorely tested giant cloud providers—for example, AWS, Azure, Ping An Cloud, alongside other cloud supporters like telcos and CDN suppliers. The previous hurdle that many corporate companies espoused of their needs being too unique or the data needed to be on-premise has seemingly faded away. With this, cloud-based services (SaaS) will receive a significant boost with the hybrid cloud being the main driver.
 Remote is Not-So-Remote
#WFH is the newest and hottest hashtag. And while online courses and YouTube learning are not new, its’ popularity has been boosted to an unimaginable level. Online fitness trainers, piano classes, church services and even haircut tutorials are popping up to cater to overwhelming demand.
In the near term, this could impact the growing demand on commercial real estate, by shifting to an increase in home working and usage of co-working spaces. It seems likely that changing transportation patterns and increased demand for home remodelling would be some of the downstream impacts.
To ensure that remote businesses are able to work effectively, video conferencing facilities alone will not be sufficient. Co-creation tools, DevOps, updated architecture like VPN access and strong security practices are rapidly becoming essentials. Certainly, this looks set to speed up the advancement and adoption of Augmented Reality and Virtual Reality. For example, the concept of virtual Louvre tours, virtual Ice hotel in Swedish Lapland tours give us a glimpse of its limitless possibilities.
 Tech Control Freak is Coming
It is now becoming obvious that it is necessary for organisations to strengthen their in-house technological capabilities to gain better control and improve their self-sufficiency. It is no longer about manufacturing migrating from China to Vietnam, Mexico and India, but about the market demand on engineers that will skyrocket to accelerate online services and online sales channels.
This will likely result in a greater decoupling of international interdependencies. Further, it will also force a new phase of innovations and accelerated development, similar to WWII’s impact on the jet engine, atomic technology and penicillin. Following this pandemic, there will be a fierce battle of tech talent, that is not limited to AI, Blockchain, Cloud and Data analysis, but also around the domain-specific EFGHtech, namely, EduTech, FinTech, GovTech and HealthTech.
A side benefit of COVID19 is that the global lockdown enforced has resulted in air pollution subsiding. Suddenly, the grass looks greener, trees seem more luxuriant and songbirds chirp beautifully. Even the Pandas in Hong Kong are mating for the first time in a decade!
However, whether these benefits are sustainable in the long-term is questionable. Near-term food shortage might drive some local governments to introduce knee jerk policies that will further damage the environment. Governments cannot look to be myopic and insular when under stress. This is a chance to mark sustainable inflexion points.
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COVID19 pandemic has truly marked the beginning of the 4th Industrial Revolution (4IR).
Just a little over a decade ago, 9/11 terrorist attacks reshaped transportation and security approach on an international front. Similarly, COVID19 pandemic will trigger seismic shifts in many industries. It will change individual values, consumption patterns, business approaches, government policies and foreign affairs.
Undoubtedly, we can expect a lot of deleveraging post COVID19.
The global recession is tethering on its edge, and cost reduction is a must just to maintain viability. QE could overcompensate the recovery with a 37% of GDP package, creating waves of whiplash growth in selected industries.
Further, this crisis will fundamentally reshape our beliefs, social attitudes and behaviours, although the true impact is yet to be told. With this in mind, this is the time for corporates to double down on technology literacy to future proof of their organisations. Rather than just hunkering down and wait, it’s time to proactively shape the impending needs, pave the way and speed ahead.