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Building Resilient Payment Systems: Lessons from Global Financial Crises

In an era of economic shocks, geopolitical tensions, cyber threats, and rapid digitalization, payment systems sit at the heart of financial stability. From the 2008 global financial crisis to COVID-19 and recent regional conflicts, one truth remains clear: Resilience isn't optional — it's essential.

“When trust in money is shaken, the backbone of economies bends.”

1. What Global Financial Crises Have Taught Us

  • 2008 Financial Crisis: Over-reliance on centralized institutions, lack of transparency, and contagion risk through interconnected banks.

  • COVID-19 Pandemic: Acceleration of digital payments, yet exposure of digital divides, operational continuity gaps, and third-party dependencies.

  • Russia-Ukraine Conflict & Sanctions: Reinforcement of financial sovereignty, alternative rails (e.g., CIPS, SPFS), and cross-border interoperability tensions.

  • SVB & Credit Suisse Bank Shocks (2023): Showed fragility in liquidity management and the importance of real-time risk assessment tools.

2. Defining Resilience in Payment Systems

A resilient payment system must be:

  • Secure: Resistant to cyberattacks, fraud, and insider threats.

  • Reliable: Operates 24/7 without disruption.

  • Redundant: Has fallback systems and continuity plans.

  • Responsive: Can adapt to policy, tech, or crisis shifts.

  • Inclusive: Serves the unbanked and underbanked equitably.

"It’s not just about surviving a crisis. It’s about evolving through it."

3. Core Building Blocks of Resilience

  • Interoperability: Seamless connection between systems and institutions.

  • Cybersecurity: End-to-end security across infrastructure and applications.

  • Business Continuity Planning (BCP): Active simulations, DR drills, geo-redundancy.

  • Regulatory Collaboration: Coordination with central banks, regulators, FSIs.

  • Public-Private Partnerships: Aligning national infrastructure with innovation.

4. The Ethiopian Context (Or African Lens)

  • Adoption of Real-Time Gross Settlement (RTGS) and National Payment Switch (EthSwitch).

  • Increasing role of mobile money (e.g., Telebirr, M-Pesa).

  • Digital ID and KYC frameworks being strengthened.

  • Challenges: Infrastructure gaps, cyber-readiness, regulatory agility, limited FX rails.

5. Looking Forward: Strategic Actions

  • Invest in People and Process, not just technology.

  • Foster regional payment integration (e.g., PAPSS under AfCFTA).

  • Prioritize data resilience and localization.

  • Embrace AI/ML for real-time fraud detection and risk analysis.

  • Create transparent incident reporting frameworks.

Conclusion

Resilient payment systems aren’t just about technology they are a reflection of trust, strategy, and foresight. As global financial shocks become more unpredictable, those who build for resilience will not just withstand the storm they'll shape the future of finance.

💡 "In payments, resilience is not the opposite of speed, it is its foundation."

 

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