Are Your Fintech Partners Prepared for Increased Online Demand This Holiday Season?
As retailers and fintech providers prepare for the holidays amid the COVID-19 pandemic, many are gearing up for a season that will look much different from past years. In fact, major retailers are preparing for an online holiday shopping season that will extend over months instead of weeks. Similarly, many retailers are trading long lines and doorbuster deals for waves of online sales spanning from October through December. With holiday sales from November and December accounting for more than 20% of annual retail sales, it’s clear that retailers will want to make as big of an effort as possible to offset the impact of COVID-19. As more consumers shop online throughout an extended holiday season, the time is now for retailers and fintech providers to take a close look at the technology partners they are using to ensure they are ready for a busier than normal online shopping season.
For retailers, overcoming the logistical challenges presented by an extended online holiday season will require the best of breed financial technology solutions to mitigate impacts to customer experience, manage their supply chain, and aggregate data across multiple channels. For fintech providers, the added demand on systems created by more online shopping this year will likely place strain on your and your partners’ solutions. For either group, having a fintech partner who is unprepared for added demand could create downstream interruptions that impact your solutions and end-customers.
When evaluating your fintech partners ahead of the holidays, here are three factors to consider:
Cloud-based vs. on-premises
Fintech providers span numerous business functions and power their solutions in a variety of different ways. From ecommerce platforms to billing solutions to tax compliance software, there are a number of technology providers available. However, not all providers are created equal when it comes to how their platforms are built.
Fintech providers and partners that use a cloud-based approach to product development and hosting are ideal when preparing systems for increased online demand. Unlike on-premises products, cloud-based solutions are hosted on global platforms that can absorb spikes in traffic and provide the native redundancy and failover capabilities needed to maintain operations even during the most intense of circumstances. In preparation for this holiday season, all of your fintech integrations should be flexible enough to scale with increased demand, which is enabled by cloud-based and cloud-native solutions.
Integrations across channels
Not only are consumers going to be shopping online more, but they are also going to have elevated expectations for online retailers. This means that retailers will need to meet customers where they are across multiple channels and devices, which requires a robust omnichannel selling environment. To meet customer expectations, retailers will need to rely on fintech providers that have established integrations to power seamless, integrated experiences.
For example, if a retailer uses a separate ecommerce platform, subscription billing service, and tax compliance software, the solutions must easily integrate to enable the business to scale alongside an increase in transactions. Established integrations through APIs and custom-built connections help ensure that all payments, calculations, and management operations work in real-time across channels to reduce disruptions to customers. From payment collection to tax compliance, your fintech solutions should be able to aggregate and manage transaction data from multiple online channels during peak times with minimal interruptions or delays.
Testing and preparation
Many ecommerce merchants have been operating at or above Cyber Week levels throughout the year due to COVID-19 and more people shopping from home. Consequently, it’s anticipated that many retailers will see online traffic volumes at peak levels during the holidays that have never been seen before. Retailers and fintech providers should ensure that their technology partners are preparing adequately for added demand.
This preparation could take several forms but will likely include chaos testing to intentionally harm applications to expose vulnerabilities, transaction load testing, and system scalability checks. Fintech providers should be prepared for worst-case scenarios to ensure that operations will remain up-and-running, while also enabling scale in real-time. For fintech providers, checking with integration partners to understand their traffic forecasts and preparation processes will be needed to understand any vulnerabilities that might arise.
As retailers and technology providers prepare for a busy holiday season online, now is the time to identify battle-tested and proven fintech providers that touch every aspect of the transaction lifecycle. Cloud-based providers with seamless integrations and extensive preparation make ideal candidates for partners and providers this holiday season. Because it only takes one fintech partner to be unprepared to cause drastic interruptions to services during high-volume times, taking a close look at your partners now could save you time, money, and stress later this season.