Business News

Employers’ Increased Headcount Demand Drives Increase In Salary Expectations Amid Tighter Employment Market In Hong Kong

Published on

28 March 2023

Talent retention and attraction are likely to be major concerns for employers in 2023.

  • 74% of respondents expect an increase in salary in 2023
  • 57% of respondents expect a salary increase of at least 20% to change job

Hong Kong is experiencing increased optimism in the business sector in 2023, resulting in higher expected headcount demand from employers that will drive career opportunities and higher salaries, according to KPMG China. In the tight employment market, KPMG China emphasises the need for employers to recruit, reward and retain talent.

Talent retention and attraction are likely to be major concerns for employers in 2023. Expectations for salary increments when changing jobs remain high among respondents to the survey. At the same time, salary reviews are increasingly being used as part of companies’ retention strategy. Remuneration remains the most important motivation for professionals to consider switching jobs, companies also need to take note of the other benefits desired by employees, including flexible working options, housing benefits and share-based awards.

For KPMG China’s 2023 report titled Hong Kong Executive Salary Outlook 2023, 1,327 business executives and professionals were surveyed to measure the employment trends in Hong Kong and across the GBA (Greater Bay Area). Among these, 645 respondents work or have a home base in Chinese Hong Kong and 682 respondents work or have a home base in the Chinese Mainland. The research covered areas including latest headcount expectations, salary and bonus outlook, and other talent trends.

Murray Sarelius, Partner, People Services, KPMG China, says: “The observed increase in headcount and salary expectations reflect the anticipated recovery as Hong Kong emerges from the removal of pandemic-related restrictions and the benefit of government support measures, while employers are looking for growth opportunities. In the tight employment market currently being experienced in Hong Kong, this demand for headcount can be expected to create strong competition for talent. This anticipated competition for talent has been reflected in similarly high expectations of salary increases in those industries that are showing the strongest intentions to increase their headcount.”

In a tight employment market, organisations need to focus on sourcing talent, remaining competitive in remuneration, and having good recruitment support. Talent shortages might be countered by hiring from outside traditional sectors and geographies, although salary and benefit offers need to be competitive with those target industries or locations. Facing budget constraints and limited resources amid Hong Kong’s recovery, companies must identify the types of compensation and benefits that resonate the most with the staff and candidates. In such an environment, the government’s new policies to attract talent will be welcome as companies are looking more broadly for the talent to address business opportunities.

Hong Kong professionals adopted flexible work arrangements during COVID-19 and expect these work practices to continue now that the situation has improved. Close to three-quarters (74%) of survey respondents rated flexible working among their top five most important benefits, yet only 49% of Hong Kong employers offer such benefits. Work flexibility and work life balance moved up to become the third most important motivation to switch jobs, after the salary and compensation package, and career progression and promotion. Flexibility and balance are therefore aspects that would allow an organisation to differentiate itself in the employment market or, if not offered, could contribute to higher employee turnover.

David Siew, Partner, People Services, KPMG China, says “The Chinese Mainland’s new multi-entry visa scheme that will allow highly-skilled talent to travel freely across the GBA, not only indicates that there is broad-based agreement on the long-term career potential of the region, but also creates a wider talent pool across the area. Businesses may consider having a mobility policy in place to encourage skilled personnel to move and work in different cities to engage with a wider group of talent-building economic activity.” 

Hong Kong has reopened, and its employment market is expected to maintain momentum in 2023. More than a third (37%) of all respondents expect staff numbers at the Hong Kong operations of their organisations to increase in 2023, up from 35% in 2022, with the percentage rising to 44% in 2023 from 40% in 2022 for C-level and HR respondents. Economic recovery is still a key theme for Hong Kong, and frontline staff such as sales, fee earners and client relations roles are expected to see the highest headcount increases. 

The survey finds that salary expectations for 2023 will continue their upward trend. 74% of respondents expect an increase in salary in 2023, compared with 66% in the previous year. However, bonus expectations for 2023 have moderated slightly, with 44% of respondents expecting an increase compared with 48% last year.

Michelle Hui, Director, Executive Search and Recruitment, KPMG China, says: “Despite a more challenging economic backdrop, the survey suggests that Hong Kong’s reopening and further relaxations of its anti-epidemic measures will provide a boost to the local economy, and the salary levels of professionals. With the Hong Kong economy having contracted in 2022, respondents appear to be more conservative about their bonus for 2023, which could be because respondents are mindful of a more challenging global economic climate and have adjusted their expectations.”

Thailand’s Economy in Game-Changing Move With New Investment Strategy

Published on

24 March 2023

Modern Bangkok offers a wide range of world class yet affordable office buildings and residential accommodation — all served by a well developed infrastructure that makes the city a top pick for international companies and expatriates looking to do business in Southeast Asia.

Riding on some $20 billion in investment pledges announced during 2022 by leading companies such as Foxconn Technology, BYD Co., and Amazon Web Services, Thailand started implementing in January 2023 an even more ambitious five-year investment promotion strategy aimed at wooing more advanced technologies and upstream industries to bring about a new era of economic development, says a feature article published by the country’s Board of Investment (BOI).

The article, which is citing officials and other stakeholders, describes how, under the new strategy, Thailand is offering much-improved incentives. These include up to 13 years corporate income tax exemption without a cap for investments in upstream industries and advanced technology, such as wafer fabrication, biotech, nanotech, and advanced materials, entailing innovation, and technology transfer through research cooperation with Thai entities.

The strategy aims to ensure Thailand remains innovative, competitive, inclusive, and becomes the showplace for digital innovation in Southeast Asia and a hub for business, trade and logistics, the articles says. To support that goal, the BOI offers special privileges to key long-term investors, to those establishing regional headquarters and R&D operations, and to small and medium-sized enterprises and new economy startups in sectors such as fast-growing digital media. For certain categories, investors and their top foreign talent will have the opportunity to apply for 10-year Long-Term Resident visas.

“We will use the BOI and investment as a tool to drive Thailand to the new economy,” the article quotes BOI Secretary General Narit Therdsteerasukdi as saying in an interview.

In 2022, the new investment applications came from companies as diverse as Amazon Web Services, the cloud computing division of U.S. tech giant Amazon.com Inc, which has pledged to invest $5 billion over several years; BYD Co., China’s largest electric car maker which has committed to spending $660 million to build its first manufacturing operations in ASEAN; and Taiwan’s Foxconn Technology, branching into EVs via a more than $1 billion joint venture with Thai energy giant PTT.

While Thailand remains a major manufacturer of conventional vehicles, the EV investments by BYD and Foxconn, as well as earlier EV investments by Chinese rivals Great Wall Motor and SAIC Motor, and by Germany’s Mercedes-Benz, which chose Thailand as the first location in the region to build its fully-electric Mercedes-EQS model, mean that Thailand is fast becoming a regional EV hub, the article says.

Adding to the positive investment mood, Mr Akio Toyoda, head of Toyota Motor Corp., one of the country’s largest foreign investors, chose the celebration in Bangkok in December 2022, of the 60th anniversary of the company’s Thai unit, to unveil the first battery electric (BEV) version of its best-selling Hilux truck and announce a partnership with Bangkok-based CP Group to turn agricultural biomass into fuel for hydrogen-powered vehicles. He also described Thailand, which is today home to the company’s Asia headquarters, overseeing engineering and manufacturing in 20 countries and serving as a research and development hub, as his second home.

The article identifies five priority sectors at the core of the strategy, including the critical Bio-Circular Green (BCG), a burgeoning sector of green, smart, renewable-focused foreign and home-grown industries. The other four are the electric vehicle supply chain, smart electronics manufacturing, the digital sector and the creative industries.

Among the foreign companies BOI Secretary General Narit would like to snare are those facing mounting pressures at home from stakeholders to conform to environmental, social and governance (ESG) concerns. “As the world focuses on ESG, investors need clean energy and we can provide it,” he says in the article. “Thailand has the answer.”

Investors interviewed for the article agree. “It’s a roadmap that is recognizing change, designed to reshape the investment landscape and it is important to bring in the industries they are focused on,” Vibeke Lyssand Leirvåg, Chairwoman of the Joint Foreign Chambers of Commerce in Thailand, which represents 9,000 foreign companies doing business in the kingdom, is quoted as saying about the strategy. “The BCG is attractive to many foreign investors and is giving the strategy a focus.”

The article also describes how the leading source countries of investments into Thailand span geopolitical divisions, as the country is seen as neutral and resilient to crisis. While Chinese companies ranked number one in 2022, accounting for more than $2.3 billion pledged, Japanese investors retained first place measured by the number of projects approved and remain the biggest accumulated source of foreign direct investment. Measured by investment size, U.S. companies came in third followed by Taiwan and Singapore.

Investors highlighted Thailand’s advantages over rival destinations. They include the kingdom’s geographical location at the heart of Southeast Asia’s 685 million-strong consumer market, its “liveability” and “stability” as seen in the predictability of its business environment irrespective of the political climate of the day, and its efficient handling of the Covid crisis which allowed business operations to continue uninterrupted. “Quality of life and quality of business life are good in Thailand,” Ms Leirvåg said.

The series of roadshows conducted by the BOI in key FDI source countries is being warmly received, the article added, citing the example of Japan, where many firms see opportunities to invest in Thailand in BCG-related technologies such as hydrogen cell fuel development, while others are interested in automation and robotics and the privileges available to companies moving headquarters functions.

“According to our latest survey, many Japanese companies have confirmed that they will expand their operations in Thailand,” Kuroda Jun, the Japan External Trade Organization (JETRO)’s Chief Representative for ASEAN, was quoted as saying.

Thailand is already the world’s second biggest exporter of computer hard disk drives, the 10th biggest auto manufacturer and one of the planet’s leading food suppliers. These existing industrial clusters, robust supply chains and good infrastructure including ports, roads and power supplies are among its key attractions for Japanese investors, according to the JETRO survey.

Investors acknowledge that they also encounter challenges in Thailand. The nation of 70 million faces headwinds ranging from traffic congestion to an aging population to an education and training system that sometime struggles to keep pace with the country’s transformation into a knowledge economy. “Although we have relatively strong human resources, the challenge now is to raise Thailand’s manpower to a higher level,” says Dr Somkiat Tangkitvanich, President of the Thailand Development Research Institute, an independent private not-for-profit think tank.

Dr Somkiat, who also serves as an advisor to the BOI board, sees the new investment strategy as being instrumental in addressing such challenges. He points to the BOI’s increasing flexibility towards different types of companies, saying additional incentives to long-established investors would encourage them to raise their game. “They have to be dynamic, move up the value-added ladder,” Dr Somkiat said. “The country has to move forward and investors have to move forward as well.”

Stay Ahead of Attackers, Maintain Good Cyber Hygiene: How To Strengthen Cybersecurity In Financial Services

Published on
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23 March 2023

Experts from Akamai Technologies and Security Bank Philippines discussed the latest trends and threats in the financial services sector today.

Cyber attacks in the financial services sector are getting more sophisticated by the day, amidst the rising number of customers who are adopting the usage of digital banking platforms. Financial services institutions will continue to drive forward their agenda of digitalization but they also continue to be the biggest targets of cyber attacks like phishing, fraud and attacks targeting APIs.

In line with the cybersecurity concerns they face, it can go a long way for companies to discuss best practices that can help address these cyber threats.

Asian Banking and Finance, during its March 9 webinar “Cyber Leaders Dialogue for Financial Services” with Akamai Technologies, tackled how the financial services industry has become a primary target of cyber threats. The webinar featured Akamai’s Security Technology & Strategy Director Reuben Koh and Security Bank Philippines’ Chief Information Security Officer Albert Dela Cruz.

During the event, Akamai’s Koh shared findings from the company’s latest research on cyber trends and the major types of attacks impacting the financial services sector. Amongst its key takeaways, the Akamai research shows that investments in digital technologies have risen across the region and are now central to financial services. This is whilst customer expectations when transacting with such services also continue to increase. In addition to this, financial institutions continue to grapple with challenges around regulatory compliance, protecting customer privacy, and keeping data secure.

Security Bank’s Dela Cruz emphasised the importance of these kinds of research in creating more protected financial institutions, as such studies provide guidance to assess the best technology and security systems to implement as well as optimise a firm’s spending. He also stressed that telecommunications companies and governments have to be involved in measures that prevent cyber threats.

Today, financial institutions are primarily concerned with the following threats: ransomware, phishing, and attacks targeting web applications and APIs. In fact, finance has become a “benchmark” for cyber attackers because “if it works in finance, it’s going to work everywhere else,” Koh explained.

Expanding Visibility To Cybersecurity Threats

Given the prevalence of cyber attacks, financial services organizations need to constantly stay on top of all the evolving trends in cybersecurity to always be prepared if such instances arise. Koh noted that there are several ways to do this, including working with capable and specialized security providers who can offer actionable insights. “[They must give] data that you can consume and basically use to defend yourself better,” said Koh.

Koh also recommended attending briefings by local agencies and computer emergency response teams, as well as joining industry groups that focus on sharing and collaborating on track findings.

Security Bank’s Dela Cruz pointed out that the C-suite has fortunately been looking to be more involved in understanding cybersecurity threats, noting that they have been showing their support through logistics and budget for protecting their organisations against these kinds of attacks.

Dela Cruz and Koh were also asked about how to balance a financial institution’s security with clients’ convenience.

Though Koh and Dela Cruz admitted that there is no specific way to address friction in a customer’s journey, they emphasised that balancing security and convenience depends on a company’s own assessment of acceptable risks and the possible return on investment. “I think it also boils down to your level of risk appetite,” Koh added.

Ensuring Security Through Sound Cyber Hygiene

Amidst these various cyber threats, Koh highlighted that financial institutions—and even other organisations–have to make sure they have sound baseline cyber hygiene that helps maintain system health and improve online security.

“Sometimes we tend to look at these fancy new systems, fancy devices, or paradigms, but we fail to look at the basic cybersecurity hygiene. Do we have them in place right now? Because basic cybersecurity hygiene will constitute about 70 to 80% of protection,” Dela Cruz advised firms.

Additionally, companies must also look into areas that require more specialised focus or protection, which cannot be done with simple traditional firewalls and IPS.

Koh then laid out five key recommendations for financial institutions to improve their cybersecurity. First of all, organisations have to constantly update their incident response plans, especially since firms’ vulnerabilities can be exploited in less than 24 hours. Dela Cruz agreed with this and said that there must also be strategies in place to increase awareness of cyber threats.

Next, it is essential to understand the industry’s ever-expanding attack surface amidst continuous digitalisation. Koh’s third recommendation is the continuous review of risk models in terms of fraud management, customer-based threats, and account takeovers, amongst others. Fourthly, firms should also consider updating their phishing defences as more sophisticated techniques arise. Lastly, companies have to be prepared to adapt their risk and security strategies whilst the landscape of cyber threats continues to evolve. This can be done through various means, such as attending security advisories or connecting with peers in the industry.

As financial services institutions continue to push for digitization, it is essential for them to stay ahead of their attackers and anticipate anything that could pose a danger to their security. However, the best cybersecurity practices come with good cyber hygiene aided by advanced technologies and strategies. At the end of the day, companies must carefully consider the risks they are willing to take without sacrificing security and convenience.

MAS To Form Information-Sharing Platform

Published on
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23 March 2023

A new bill has been introduced in Singapore’s parliament that could lead to an information-sharing platform set up by the local financial regulator.

A new bill has been introduced in Singapore’s parliament that could lead to an information-sharing platform set up by the local financial regulator.

A financial services and markets bill was introduced in Singapore’s parliament on Monday for information-sharing to combat illicit activities such as money laundering, terrorism financing and the financing of proliferation of weapons of mass destruction.

If passed, the bill will give the Monetary Authority of Singapore (MAS) the power to create an electronic system and outline the circumstances in which the regulator and a suspicious transaction reporting officer can obtain or access such information as well as how they can use it.

Initial Phase

The bill covers the initial phase of the project which will only requires information-sharing on a voluntary basis with a focus on three key commercial banking risks: abuse of shell companies, misuse of trade finance for illicit purposes and proliferation financing.

Eventually, MAS plans to make some aspects of sharing compulsory and extend the platform’s coverage to more areas and financial institutions in later phases.

The MAS platform is named Cosmic (collaborative sharing of money laundering and terrorism financing information and cases) and its framework will be jointly developed with DBS, OCBC, UOB, Standard Chartered, Citibank and HSBC.

Bank-to-Bank Sharing

According to MAS, the Cosmic platform was developed to address the inability to share information about suspicious customer activity between banks.

Financial criminals exploit these ‘information silos’ by making illicit transactions through a web of accounts in different financial institutions and moving from one financial institution to another to avoid detection, the regulator said in a statement.

Source: finews.asia

Rising Cost of Living Is Driving Collaborative Growth Opportunities for SMBs and Freelancers

Published on

23 March 2023

New research from Payoneer shows almost half (46%) of surveyed freelancers around the world have seen an increase in demand for their work from global businesses compared to 2021 and over half (55%) have taken on more work in response to the rising costs of living.

Payoneer, the financial technology company empowering the world’s small businesses to transact, do business and grow globally, has today published findings from its 2023 Freelancer Insights Report.

The fifth edition of Payoneer’s annual report contains responses from over 2,000 freelancers across 122 countries, detailing the continued rise in demand for their services as businesses continue to outsource services to cut costs.

The Covid-19 pandemic accelerated the freelance revolution with people wanting to seize the flexibility and opportunities in the new world of global digital commerce and small businesses increasingly looking to utilize their services. Payoneer’s annual freelancer survey is a temperature check of the global freelancer economy and the businesses that hire them, looking at areas such as demand for services, sector growth, response to macroeconomic pressures and wellbeing.

The survey shows that demand for freelance work continues to trend up, continuing the trend that was seen at the start of the pandemic. Despite the fears of a global economic slowdown, respondents are seeing an increasing demand from digital businesses looking to augment teams as they grow across borders.

The key findings from the 2023 Freelancer Insights Report include:

  • Almost half (46%) of the surveyed freelancers around the world report that they have seen an increase in demand for their work from the global businesses that hire them compared to 2021.
  • Over half (55%) also report that they have taken on more work in response to the rising costs of living compared to 2021. Freelancers are taking action, with 41% raising their rates and 32% expanding to new geographies.
  • 73% of respondents identified finding new clients as their biggest challenge.
  • The fields of programming, marketing, project management, and web design saw the most significant increases in demand over the past year.
  • The gender pay gap is narrower in freelance work, but men are still more likely to charge higher rates. Women are 8% less likely to increase their rates and men’s rates grow faster over time than those by female freelancers. The average hourly rate for female freelancers is $22 compared to $24 for men.

Adam Cohen, Chief Growth Officer at Payoneer, commented on the findings:

“We are living through a digital commerce revolution and the global freelancer economy is clearly an integral part of that. These survey results show that there are huge opportunities for SMBs around the world to tap into what is now a truly borderless workforce. The continued growth across SMBs and freelancers has a mutually positive impact as they open doors of opportunity for one another and we expect to continue to see them flourish in a digital-first environment. A competitive market might mean that some freelancers are struggling to find the right work but the opportunities in the marketplace remain available to them and they continue to show resilience in the face of significant economic pressures.

“We are proud to be playing our role in facilitating their success in the global digital commerce system and look toward the future with optimism for SMBs and freelancers alike.”

Payoneer’s full report can be found here: 2023 Freelancer Insights Report

The Global Banking Crisis Has Little Effect On Philippines

Published on
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23 March 2023

The BSP said the local banking system remains strong.

Philippine financial authorities expressed optimism on Monday that a deepening crisis in the global banking sector does not pose a significant risk for the local industry and the domestic economy as a whole.

Global financial markets are reeling from a string of bank failures and fears of contagion, with a deal to rescue Credit Suisse and promises of liquidity from central banks doing little to stem fears of a wider crisis in the financial system.

“It does not look like other Global Systemically Important Banks have the same problem, in which case the impact on the global economy, and therefore the Philippines, will not be significant,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said.

In notes prepared for President Ferdinand Marcos Jr. on the stability of the local banking system following the collapse of Silicon Valley Bank and Signature Bank in the United States, the BSP said the local banking system remains strong.

The sector is also ready to withstand possible shocks posed by the collapse of some U.S. banks, the BSP said, though it added it would continue to closely monitor developments, assess their impact on the banking system and respond accordingly.

“The BSP has long implemented structural reforms to ensure the safety and soundness of banks,” it said.

The BSP has also imposed prudent limits and requirements, including the Basel III reforms on capital and liquidity standards which enable banks to maintain adequate capital and liquidity, as well as strengthened surveillance mechanisms for risk monitoring, it said.

To address any serious liquidity conditions, the BSP said solvent banks can tap emergency loan facilities.

“There’s very little contagion on the Philippine side and in fact it can be a positive in the sense that central banks are likely to ease on hiking of interest rates,” Finance Secretary Benjamin Diokno said separately.

In remarks made at a forum organised by foreign journalists, Diokno said the BSP could decide to opt for a narrower 25 basis points interest rate hike or keep policy settings unchanged at its meeting on Thursday, amid global uncertainty.

“The option now is not to hike or to hike by 25 basis points,” said Diokno, though he added he is just one of the seven-person policy-making monetary board and that he could be outvoted.

Source: Reuters

South Korea Vows Swift Market Stabilization Measures If Needed

Published on

23 March 2023

Financial companies need to build more provisioning and capital buffers against future troubles.

South Korea’s finance minister said on Thursday the economic and financial policy authorities would keep closely monitoring the markets situation and take stabilization measures if needed.

Minister Choo Kyung-ho made the remarks at a meeting of top policy makers to review global market conditions after the U.S. interest rate decision. The heads of the central bank and financial regulatory agencies also attended the meeting.

“The government and the Bank of Korea will implement market stabilization measures, if needed, while checking the soundness of the financial system and financial companies in an ongoing basis,” Choo said.

He said financial companies need to build more provisioning and capital buffers against future troubles, while adding the recent stability in domestic markets reflected still strong fundamentals of the local financial system.

Source: Reuters

Family Businesses See Largest Growth Increase In 15 years

Published on
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22 March 2023

Traits like values, employee communication, digital capabilities stand out in companies which outperformed peers.

  • 71% of family businesses reported growth in their latest financial year, with 43% reporting double-digit growth and 77% reporting that they expect to grow in the coming two years
  • Family businesses with a communicated ESG strategy are more trusted by customers (62% vs. 49%) than those that do not, yet 67% of family businesses put little/no focus on ESG
  • Family businesses with diverse boards (46%) have a slight advantage of those that do not (43%) in terms of double-digit growth this year
  • Two thirds of family businesses say employee trust is essential – yet only 36% say they are focused on attracting and retaining talent

Family businesses with a company purpose connected to the United Nations’ Sustainable Development Goals (SDGs) are performing better than their peers across multiple financial and social metrics, according to PwC’s 11th Global Family Business Survey.

The report, Transform to Build Trust, which polled over 2,000 family businesses across 82 countries between October 2022 and January 2023, reveals double-digit sales growth at 43% of family businesses globally in the last financial year, up from 21% in 2021.

Notably, nearly three-quarters (73%) of family businesses that experienced double-digit growth over the last financial year are those with a clear set of family values and an agreed purpose for the business. This year’s survey reveals an upward trend in the share of family businesses willing to lead the way in sustainable business practices, with half (50%) of firms surveyed with a purpose connected to the UN’s Sustainable Development Goals seeing double-digit growth during the same period.

Family businesses bounced back after the COVID-19 pandemic, and despite a positive commercial outlook in 2023, the data reveals a disparity between priorities for leaders and focus areas that are typically associated with higher levels of growth. High performing family businesses in 2023 are shown to have:

  • Employee incentives (53%)
  • Boards committed to diversity (52%)
  • Strong digital capabilities (47%)

As challenging macroeconomic headwinds impact businesses globally, family businesses in 2023 are largely committed to protecting the core business, covering costs, and surviving, increasing significantly as a key priority (+37%) in 2023 rather than pursuing digital capabilities and introducing new products and services. Just over a third (36%) of family businesses say they are focused on attracting and retaining talent – despite the understanding that employee trust is critical to business success.

There is clear evidence that being very advanced in having an agreed and communicated ESG strategy correlates strongly with success and other positive attributes. Half (50%) of those surveyed who are very advanced in having an agreed and communicated ESG strategy saw double-digit growth (42% for family businesses not very advanced in this area).

Building trust through commitment to purpose

Fundamental to the unique challenges in the management of family businesses, those that are purpose-led generally experience higher levels of trust (59%) between family members. According to Edelman’s 2023 Trust Barometer, customers now more than ever expect action from business on social issues, and this is reflected in the growing number of family firms who achieved double-digit growth (52%) in the past year, as found in PwC’s survey. Furthermore, more businesses (10%) that are working hard to build trust within their companies experienced a higher level of growth in the same period. However, only a minority of family businesses are taking routine action to ensure purpose is being tracked effectively, with 46% respondents publishing it online and 36% actively communicating it to family members.

Notably, despite the correlation between delivering on ESG (62%), diversity and trust with customers, only 22% of family businesses globally are currently focussed on it. With nearly all respondents considering customers their most essential stakeholder group (95%), and more businesses that are advanced on DEI (10%) and ESG strategies (8%) experiencing double-digit growth, there is an opportunity for family businesses to gain a competitive advantage in the face of radical disruption and a changing economic landscape.

Peter Englisch, Global and EMEA Family Business Leader, PwC, said:

“Family businesses are showing they can grow by welcoming change and building trust with digital communication and diverse boards – even in a challenging landscape. To continue this trajectory, firms will need to re-orient to focus on delivering value not just for customers, but for society. Transformation, purpose, and legacy are no longer converse, but intertwined.”

Digital capabilities for better corporate governance and customer relations

Critical to supporting governance structures and managing real-time information that feeds into decision-making processes, nearly 10% more family businesses that have strong digital capabilities experienced double-digit growth in the past year. Also facilitating processes to gather customer and employee feedback, family firms fully trusted by these stakeholders tend to be more digitally advanced. However, only two-in-five (42%) feel they have strong digital capabilities and the share of firms focussed on improving in this area as a key priority has fallen as a top priority for family businesses since 2021, with 52% ranking digital capabilities as a top five priority for the next two years.

Peter Englisch, PwC Global and EMEA Family Business Leader, concluded:

“While market pressures and rising costs mean survival is the main priority for family businesses globally, our latest data shows that those family businesses which are focussed on digital transformation and diversity, are reaping the rewards. Now more than ever, building competence and achieving strong financial performance are linked to corporate responsibility. The message is clear, for family businesses to survive, they must transform. And that transformation is now.”

Board diversity is key for transformation

Legacy and succession planning are top-of-mind for family businesses in 2023, with younger and external voices often cited as advocates for change and progression. For example, those adopting digital transformation tend to have more diverse boards (49%). In this year’s report, having more than two non-family board members was strongly associated with double-digit growth. These firms also tend to be more advanced in areas such as contributing solutions to society, the environment, and diversity, equity & inclusion, focus areas that were also linked to stronger financial performance. Yet one-third of all respondents only have family members on the board, a quarter have no-one from a different industry background, and only 9% are considered diverse. Family businesses with board diversity have a slight advantage of those that do not in terms of reported double-digit growth this year (46% and 43%, respectively). 

Penetration of FinTech Apps In SEA To Reach 84% In 2023

Published on
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21 March 2023

Fintech apps have increased their rate of penetration in Southeast Asia by 3.3 times over the last five years.

By the end of 2022, the total number of unique FinTech users in Southeast Asia reached 420.5 million people. This is a 3.5% (+14.4 million) increase compared to the year prior.

The penetration of fintech services in the region had experienced a significant boost. At the end of 2022, total penetration reached 81.8%, with the e-commerce sector holding the most weight at 56.6%.

By the end of 2023, the penetration rate of fintech users is expected to increase from 81.8% to 83.7%. That said, some changes are anticipated in their overall distribution in the SEA. The share of e-Commerce users may increase from 56.6% in December 2022 to 58.3% in December 2023. Meanwhile, the share of Digital Investments will decrease from 1.7% to 0.4%. Notably, strong growth awaits the Payments & Transfers sector – from 2.97% to 5.49%.

Robocash Group analysts comment: “It is worth noting that this is a market assessment under normal circumstances. In addition, the state and regulatory measures present an important factor affecting the fintech market in the SEA. However, the SEA’s fintech market remains one of the most dynamically developing in the world. The region continues to attract the attention of global players and investors, and this trend will continue in the coming years.”

Financing The Transition: How To Make The Money Flow For A Net-zero Economy

Published on
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21 March 2023

New report from ETC quantifies the financial need and identifies policies required to unleash investment on the scale required.

Investments in clean energy must quadruple within the next two decades according to the Energy Transitions Commission (ETC). In its latest report “Financing the Transition: How to make the money flow for a net-zero economy” the ETC highlights the critical importance of strong government policies relating both to the real economy and to the financial system if finance is to flow on the scale required. It also identifies “concessional/grant” payments needed to support early coal phase-out, end deforestation and finance carbon removals.

New Energy Transitions Commission Report, Financing the Transition

Around $3.5 trillion a year of capital investment will be needed on average between now and 2050 to build a net-zero global economy, up from $1 trillion per annum today. Of this, 70% is required for low-carbon power generation, transmission, and distribution, which underpins decarbonisation in almost all sectors of the economy.

Well-designed real-economy policies must create strong incentives for private investment in the energy transition. Examples include setting ambitious targets for renewable generation by 2030, carbon prices and product regulation to drive decarbonisation in heavy industry, aviation and shipping, and specified date bans on the sales of internal combustion engines (e.g., by 2035 at the latest).

Other key actions include various forms of financial regulation, targeted fiscal support for the development and initial deployment of new technologies, and net-zero commitments from financial institutions.

Conceptually separate from investment finance (which will deliver positive economic returns), “concessionary/grant” finance will be required to help cover the economic costs of early coal phase-out, to offset the incentives to deforest, and to fund carbon dioxide removals.

“Adequate flows of finance are the key to delivering a net-zero future and limiting the impact of climate change. Private investment, government and philanthropic money are needed to deliver the large-scale funding and international financial flows to ensure we move from targets to action and deliver a low-carbon global economy“, Adair Turner, Chair, Energy Transitions Commission.

Accelerated Investment But Balanced By Savings

Part of the investment needed will be offset by reduced investment in fossil fuels, cutting the $3.5 trillion per annum requirement to a net $3 trillion. This is equivalent to 1.3% of the likely average annual global GDP over the next 30 years. These investments will also create a lower operating cost energy system than today which could realise savings of $2-3 trillion a year by 2050 and continue thereafter, depending on how fossil fuel prices evolve. In middle- and low-income countries, much of the investment would be required to support economic growth even in the absence of a climate change challenge.

The true incremental cost of the required investment is therefore far below the gross investment need. But the scale of capital mobilisation and reallocation required will not occur without strong real economy policies in all economies and actions to address financial sector challenges in middle- and low-income countries.

The energy transition is capital intensive, pointing to a peak in investments around 2040 as we build the energy system of the future, before falling to a lower asset replacement rate thereafter.

Global Investment – Incentives To Invest Despite The Challenges

There is enough capital globally to finance the energy transition. Although there are some short-term challenges to investment in the transition (e.g., high interest rates), renewables are cheaper than new fossil fuels in over 95% of global electricity markets and there is now an impetus to invest in energy security and efficiency savings.

The scale-up of investment required differs by country income group. In high-income economies and China, annual investments to build a net-zero economy will need to reach roughly double today’s levels by 2030. In middle- and low-income countries, a four-fold increase is required by 2030.

In all countries, the vast majority of finance will come from private financial institutions and markets if well-designed real economy policies are in place. Yet even in high-income economies, public financial institutions should play a role in financing specific types of investment, such as first-of-a-kind technology deployments, shared infrastructure (e.g., hydrogen and CCUS transport and distribution networks), and residential buildings retrofits.

In some middle- and low-income countries, private financial flows alone cannot ensure adequate investment given the challenges created by high actual or perceived macroeconomic risks, inadequate domestic savings and other factors which increase the cost and reduce the supply of private finance. A significant increase in international financial flows to some lower-income economies is therefore required. As the Songwe-Stern report argued, this requires a major increase in the scale of finance provided by Multilateral Development Banks (MDBs), together with changes in MDB strategy and approach which can help mobilise greatly increased private investment.

“The financing challenge is at the heart of delivering a net-zero economy; how much do we need to invest, in what sectors and in which geographies, to achieve the unprecedented rewiring of our economies needed to address the climate crisis. This ETC reports rigorously and systematically tackles exactly these questions. Importantly, it puts a spotlight on the different levers that are needed to enable this investment to come forward: real economy policies; policies targeting the financial system; and the scale and role of concessional funds. It provides vital insights to shape the work of different institutions, including MDBs such as mine.” 

“At EBRD, we have set ourselves a target to become a majority green Bank by 2025, and this report underlines the key areas that we must focus on, the real economy policies that we must work with our countries of operations on to create the enabling conditions for investment, and the role we must play to mobilise private sector capital alongside our own investments.”  said Nandita Parshad, Managing Director, Sustainable Infrastructure, EBRD.

Supporting action by financial institutions and financial regulation can accelerate capital reallocation. Financial institutions should develop net-zero transition plans, which can play a role in capital mobilisation and reallocation into low-carbon assets and technologies. Financial regulation should ensure the transparent disclosure and management of climate-related risks and strategies.

Vital Role For Concessional/Grant Payments

Provided good policies are in place, capital investment will deliver positive returns to investors. But achieving some emissions reductions will impose an economic cost – in particular, phasing out coal early where it still remains competitive with renewables, halting deforestation which delivers a positive return to landowners and businesses, and scaling up carbon dioxide removals.

Concessional/grant payments to offset these costs in middle- and low-income countries (excluding China) may therefore be essential and could amount to around $0.3 trillion a year by 2030 if the world is to achieve its 1.5°C objectives. This money could, in theory, come from corporates via voluntary carbon markets, philanthropy, and high-income countries.

By 2030, these payments could amount to: 

  • Around $25-50bn per annum to achieve early phase-out of existing coal assets, with the need for these payments to decline to zero by 2040. 
  • Around $130bn per annum to end deforestation by 2030 – but potentially far more if red meat consumption continues to increase. The scale of these payments raises the question of whether available money would be better spent in other ways e.g., directly supporting governments which are willing and able to impose deforestation bans.
  • Around $100bn per annum to fund carbon removals. Initially primarily via nature-based solutions such as reforestation but with an increasing role in the 2030/40s for engineered solutions such as Direct Air Capture of Carbon and Storage (DACCS).

“We believe financing can play a major role in shifting the dial to a net zero global economy, especially when banks work in partnership.”

“As the ETC’s report clearly sets out, finance needs to come together with government and philanthropic efforts to deliver the significant investment needed for transition.” said Zoë Knight, Managing Director & Group Head, Centre of Sustainable Finance, HSBC.

To read the full report, visit: https://www.energy-transitions.org/publications/financing-the-transition/ 

The ETC’s report is accompanied by 5 sector sheets summarising the investment needs, challenges and actions required for decarbonising power, buildings, transport, industry and hydrogen sectors by 2050. These are available to download here: https://www.energy-transitions.org/publications/financing-the-transition/#downloads 

ICAEW, ISCA & CQICPA Sign Tripartite MoU To Boost The Development of Accountancy And Finance Industries

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21 March 2023

Amid economic globalisation, international cooperation has become an important driving force for industry development. To promote the region’s accountancy and finance industries as well as knowledge exchange and collaboration of  the accountancy profession, the Institute of Chartered Accountants in England and  Wales (ICAEW), the Institute of Singapore Chartered Accountants (ISCA) and the Chongqing Institute of Certified Public Accountants (CQICPA) signed a tripartite Memorandum of Understanding (MoU) on 20th March 2023.  

This tripartite MoU aims to facilitate the development of the accountancy and finance  industries in Singapore, China and the United Kingdom. The three institutes will deepen  professional research and knowledge exchange, and promote the development of the accountancy industry from a global perspective. 

At the virtual signing ceremony, representatives of the three parties delivered speeches,  reviewing the achievements of their respective associations in the past year, and shared future plans and strategic priorities.

ISCA President Mr Teo Ser Luck said, “We’re delighted to deepen our relationships with  CQICPA and ICAEW via this MoU. We look forward to exploring more opportunities for  joint research, knowledge exchange and development of training programmes. The  MoU is also in line with ISCA’s plan to expand our network beyond Singapore. We look  forward to working closely with CQICPA and ICAEW to explore new opportunities for  members of the three institutes, businesses and the accountancy community.” 

In his opening speech, Mr Mark Billington, ICAEW Managing Director International, welcomed each representative and expressed his gratitude to the three associations for  their longstanding joint efforts and support. He added that the three parties will strengthen cooperation to jointly promote the development of the profession, instil trust  in the accountancy profession, champion sustainability, lead their members to master  technology and data and jointly promote the attractiveness of the accountancy  profession. 

Ms Zhang Qing, Secretary General of CQICPA, said that the signing ceremony today  marked a new starting point for cooperation among the three parties, and will bring forth fruitful cooperation. She proposed three major objectives: to strengthen exchanges and  cooperation among the three associations to achieve mutual benefit and win-win  results; to promote exchanges among members of three institutes; to enhance  professional quality as well as to seize strategic opportunities to promote the  development of the profession in the three regions.

Green Freight Asia & ESG Fintech Join Hands To Greenify And Enable Access To Sustainable Financing

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20 March 2023

Green Freight Asia (GFA) and STACS partner to enable companies in the logistics sector to build resilience and transition to sustainability.

Hashstacs Pte Ltd (‘STACS’), a leading Singapore-headquartered environmental, social, and governance (‘ESG’) FinTech firm today announced its partnership with green logistics certification body and non-profit association Green Freight Asia Network (‘GFA’). The partnership centres around the aggregation of transportation and logistics certifications onto STACS’s ESGpedia digital registry, which powers the Monetary Authority of Singapore’s (‘MAS’) Greenprint ESG Registry.

In a sector that traditionally lacks green certification and harmonised sustainability reporting standards to guide businesses on their decarbonisation journey, GFA and STACS aim to empower businesses in the sector to build resilience and transition to sustainability practices, through enhanced access to sustainable financing brought about by digital technology: logistics businesses that have attained the GFA certification can showcase it on their digital ESG profile, and utilise digital tools on the platform to better track and monitor their emission reduction.

This is especially key as the transportation sector is one of the largest contributors to GHG emissions, accounting for 15% of Singapore’s carbon emissions, and is also highly susceptible to global climate risks and disruptive shocks. In Singapore, the government has also announced its commitment to achieving 80% reduction in carbon emissions for the sector by 2023.[1]

Recognised by banks, Green Freight Asia’s Labelling and Certification Programme certifies companies that demonstrate a commitment to and progress toward the adoption of green freight practices. The GFA Label is an external validation of a company’s commitment to sustainability in the logistics sector. The four rankings for Carriers and Shippers include Minimum, Enhanced, Strong, and Outstanding (Leaf 1 to Leaf 4).

These rankings encourage Carriers to continuously improve fuel and energy efficiency in their operations to increase their chances in Shippers’ carrier selection processes and likewise serve as proof of environmental compliance for Shippers when contracting third-party logistics services. The GFA Labelling and Certification Programme fosters close collaboration between Carriers and Shippers to advance their sustainability performance, thereby reducing the carbon footprint of road freight logistics in the APAC region.

ESGpedia aggregates sustainability data including fuel consumption, carbon emissions, and carbon intensity. It also provides analytics like benchmarking against industry standards, as well as overall levels of carbon savings, which provide enhanced visibility to companies who are looking to track their sustainability performance and carbon footprint. Through the partnership, businesses which have attained the GFA Certificate can choose to create a company ESG profile on ESGpedia for free, where they can upload and showcase their various sustainability efforts, as well as better track their emission targets with ready digital tools.

Financial institutions can also access this data and use it to develop greener capital financing solutions that can help in the formulation of data-driven emission reduction strategies. Banks can also engage in positive screening of green logistics businesses that meet their ESG credential criteria, to engage in ESG financing.

This latest partnership marks further developments in ESGpedia’s transport and logistics coverage, following STACS’s live use case with Singlife with Aviva and CO2 Connect (‘CO2X’) earlier last year[2], whereby Singlife leveraged CO2X’s logistics carbon emissions tracking capabilities and data on ESGpedia registry (obtained with consent from insurance policyholders) to efficiently develop and better structure new green motor insurance policies.

Mr Krishan Kumar Ralhan, Director and CEO at Green Freight Asia Network, said: “At Green Freight Asia Network (GFA), we seek to expand our network and collaborate with like-minded organisations to improve the sustainability performance of the freight, transport, and logistics industry in the APAC region.

We are pleased to partner with STACS ESGpedia to feature our flagship certification programme on the ESGpedia registry. This move will equip companies in the logistics sector with data digitization tools to achieve net-zero emissions by 2050. We believe that the GFA Label is a valuable contribution to the freight industry’s decarbonisation journey, and we encourage more freight companies to take this first step.”

Benjamin Soh, Managing Director at STACS, Co-Founder at CO2X said, said: “The future we envision for Asia’s transport and logistics industry is one that leverages on technology and quality data to spearhead sustainability and achieve its decarbonisation goals. With increasing regulatory push, there is a dire need for businesses in the sector to build resilience in today’s climate. Our partnership with Green Freight Asia (GFA) is highly strategic, combining GFA’s certification program for the logistics sector with enhanced visibility, better data, and emissions tracking on STACS’s ESGpedia registry. With green capital being a key enabler in businesses’ transition, ESGpedia also enhances sustainable financing opportunities for GFA-certified companies on the registry.”

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