Lessons From The Recent Microsoft Outage
As I was in Rome, getting ready to fly back from my travels in Europe, I found myself in a less-than-ideal situation. The hotels and airports were struggling to access their systems, and people were unable to pay with cards—only cash was accepted.
It reinforced my thinking about how valuable cash is, especially in situations like these, where you might otherwise be stranded. During COVID, natural disasters (such as the immense flooding that affected Northern New South Wales in 2022), and unexpected power outages, cash once again became a necessity.
As a financial advisor who has experienced these things first-hand, I’ve made it a habit to withdraw a little cash each time I pass an ATM and keep it in a safe, protected location as a buffer for emergencies. This can be a life-saving habit that's easy to build into your daily routine.
For example, if there’s an ATM between your office and your usual lunch spot, withdraw an amount you’re comfortable with on your way back from picking up lunch. When you get the chance, put it somewhere secure. This will build up a buffer for when emergencies happen and you can’t access your funds locked in your bank account.
Let's circle back to what happened when I was in Rome.
Why were systems shutting down and forcing the public into a ‘cash-only’ frenzy?
CrowdStrike, a cybersecurity system that handles all of Microsoft's security, installed a faulty update on July 19th that continued into the weekend and early week. This update caused the biggest worldwide crash in recent times, affecting a vast number of businesses, institutions, and services that rely on Microsoft's infrastructure. The repercussions were felt globally, and the chaos it unleashed highlighted our dependence on digital transactions and online systems.
The outage disrupted hotel bookings, airport operations, and even basic financial transactions, leaving many people stranded without access to their funds. This situation underscored the importance of always having a backup plan for such emergencies.
It's easy to overlook the value of cash in our increasingly digital world, but incidents like these serve as a stark reminder. Keeping a small emergency fund in cash can provide a safety net when technology fails us.
Moreover, this experience has broader implications for how we prepare for and manage our finances during crises. Here are a few steps you can take to safeguard yourself:
Diversify Your Payment Methods: Ensure you have multiple ways to access your money. Apart from carrying some cash, consider having more than one bank account or a digital wallet that might not be affected simultaneously. Consider holding alternate liquid assets also (such as bullion).
Stay Informed: Keep yourself updated on potential cybersecurity threats and financial system vulnerabilities. Knowing what's happening can help you react promptly and minimise disruption. Always be mindful of not relying solely on technology.
Prepare for the Unexpected: Regularly review and update your emergency plans. This includes having essential supplies at home, a list of critical contacts, and a financial contingency plan.
In a world where technology is ever-evolving, it's crucial to remain adaptable and prepared for unforeseen circumstances. The recent Microsoft shutdown is a stark reminder that while technology can offer convenience and efficiency, it's not infallible.
By taking proactive steps, such as maintaining an emergency cash fund and diversifying your financial access points, you can navigate these challenges more smoothly. Remember, a little preparation today can save you a lot of trouble tomorrow.
If the Microsoft mishap affected you and you want to ensure you never get stuck in a similar situation again, don’t hesitate to reach out to FRE.DM Wealth. We can work with you to create a plan that makes you feel confident and prepared for any financial emergency that comes your way.
Similarly, if you weren’t affected by this situation but feel stressed that it may happen again, reach out to us. We can help you develop a financial plan that ensures you feel secure if this situation ever repeats itself.
In a world where we are becoming increasingly reliant on technology, we must remember that tangible ways to pay for things are far more reliable in times of emergency.
