Business News - Page 2

89% of Australian Finance Leaders Believe the Industry Needs a New Breed of CFO

Published on

28 February 2023

The global report looks at how finance leaders today take a more holistic approach with a reliance on data to engage with the wider strategic priorities of their organisations.

  • A new study by Sage looks at how the role of the CFO is changing across Australia and globally
  • A majority of respondents said that CFOs must have the skills necessary to push their organisation forward in its digital transformation
  • More than a-third of CFOs are looking for professionals with financial expertise but plan to train them on using big data or AI
  • Emerging top priorities for CFOs include overseeing digital transformation, integrating emerging technologies, and an emphasis on people
  • 76% of financial decision makers put purpose over profits

Sage, the market leader in cloud business management solutions, today reveals the Australian findings of itsThe Redefined CFO study, also known as CFO 4.0. Gathering insights from close to 2000 respondents, the global report looks at how finance leaders today take a more holistic approach with a reliance on data to engage with the wider strategic priorities of their organisations.

According to the research, over the last 12 months, Australian CFOs have seen increased responsibilities in identifying strategy & future planning (80%); digital transformation (80%); and diversity, equity, and inclusion (DEI) initiatives (78%).

Stepping out from the shadow of the CEO, the CFO has become a hub of business information – diversifying their expertise, recruiting the right talent, and ensuring they implement emerging technologies and purpose-driven programs to keep their organisations ahead of the curve.

According to the study, three key CFO personas have emerged: Chief Facilitative Officers, Chief Fairness Officers; and Chief Future Officers.

Chief Facilitative Officers are expected to champion digital transformation, and believe that technological, global and internal issues are holding their organisations back; Chief Fairness Officers understand that a business is defined by its people, not its profits; and the Chief Future Officer is focused on business continuity, propelled by the awareness that today’s fast pace of business means companies cannot simply react.

“Financial leadership today is the most diverse it has ever been. As they evolve, CFOs must blend attributes that allow them to engage in cross-functional decision-making, operate with purpose and future-proof their organisations,” said Jonathan Howell, Chief Financial Officer, Sage.

Mastery of technology key in new breed of CFOs

The study found that technology continues to shape the responsibilities and success of CFOs.

93% of respondents said that CFOs must have the skills necessary to push their organisation forward in its digital transformation. To meet the demands of today’s constantly evolving business landscape, the research found that CFOs have embraced non-traditional skills and responsibilities. Among the top three priorities for Australian CFOs are integrating emerging technologies such as AI and machine learning (15%); the upgrade of software and technology solutions to drive digitalisation (14%); and hiring new talent (14%).

CFOs identify the ability to respond and integrate new and emerging technologies as the single greatest issue holding their organisation back. These technologies are perceived to be key in creating or maintaining a competitive advantage (44%); financial forecasting (42%); and business-wide trend forecasting (41%).

The study also revealed that finance teams are now prioritising technology skills over financial experience in recruitment, and it is impacting the hunt for new skills. 38% of CFOs are looking for professionals with financial expertise but plan to train them on using big data or AI; and 34% seek those with coding experience.

In Australia, 85% of CFOs also expressed ambitions to eventually become CEO of their organisation. 58% feel that CFOs could perform the job of CEOs.

“CFOs now have a bigger seat at the table, and increasingly, we are seeing that they are owning a lot of the organisation’s technology journey,” said Justus Siage CPA, Solutions Engineering Manager, Sage Australia. “They have very specialised skills in financial modelling and return-on-investment (ROI) analysis, compared to other areas of the business.”

“Generally speaking, organisations are seeking modern CFOs who are more conversant with technology. From numbers and reporting, we are seeing a movement to CFOs being more tech-savvy,” said Pezh Moradi, Chief Operating Officer, McArthur. “And with technology taking away a lot of the administrative burden of CFOs, they are able to build on softer skills such as leadership and coaching, focus more on hard skills such as business intelligence (BI), as well as the various personas highlighted in the Sage study.”

Purpose and people ahead of profit

Organisations are also prioritising people and empathy in business decisions. Forty-eight percent of respondents feel that the finance industry needs more Chief Fairness Officers.

Eighty percent of financial decision makers are encouraged by their organisation to prioritise people, account for empathy and understanding when making business decisions (77%) and put purpose over profits (76%).

In Australia, 45% of CFOs aspire to be Chief Fairness Officers, striving to be empathetic and taking steps to nurture their organisations’ employees. This finding aligns with the global trend of an increased awareness of employee wellbeing and equality in recent years, signifying a new era of the future of work.

Please download the global research report here.

FSB Has Developed A Roadmap To Enhance Cross-border Payments

Published on

27 January 2023

The roadmap provides a high-level plan, which sets ambitious but achievable goals and milestones.

At the request of the G20, the FSB has developed a roadmap to enhance cross-border payments, in coordination with the Committee on Payments and Market Infrastructures (CPMI) and other relevant international organisations and standard-setting bodies. The roadmap provides a high-level plan, which sets ambitious but achievable goals and milestones. It is designed to allow for flexibility to accommodate the differing starting points for payment system arrangements in countries and regions around the world and to be adaptable year by year in how the goals are met.

The roadmap deals with deep-seated, long-standing issues. It aims to achieve practical improvements in the shorter term while acknowledging that other initiatives will need to be implemented over longer time periods. It includes a set of committed actions and timetables, to achieve early results in improving existing arrangements and, beyond that point, indicative milestones that allow adjustments to the way forward in response to a constantly innovating market.

The roadmap will bring together a coalition of international and national actors to deliver on its five focus areas.

The involvement of the private sector, sharing their insights and practical expertise, as well as delivering change, will be key to support the practical implementation of the roadmap across the various projects. Public consultation will take place at appropriate points, in order to ensure transparency and accountability.

Quantitative Targets To Enhance Cross Border Payments

n 2022, the FSB published a report to the G20 with further details of the implementation approach, including key performance indicators (KPIs) to be used for monitoring progress toward the G20 targets for cross-border payments. The FSB also published a prioritisation plan and engagement model for taking the Roadmap forward, focussing on three priority themes:

Payment system interoperability and extension;

Legal, regulatory and supervisory frameworks; and

Cross-border data exchange and message standards.

In February 2023, the FSB outlined specific actions that will be undertaken to progress the priority themes and achieve the targets by 2027 end date. This includes the establishment of two industry taskforces, led respectively by the FSB and CPMI, for ongoing industry engagement.

Source: FSB

SEA & SA 83% Drop In Fintech Startups; Investors Opt For Risk-averse Strategies

Published on
/

23 February 2023

In 2022, the countries of South & Southeast Asia saw a YoY decline of 83% in new fintechs.

 In 2022, the countries of South & Southeast Asia saw a YoY decline of 83% in new fintechs, with only 349 startups emerging in the region. However, the volume of investments has not decreased so dramatically, with investors choosing less risky strategies, as revealed by the analytical centre of Robocash Group. The newly formed fintechs were able to raise about USD 153 M via various financing rounds. This is 1.4% of the total attracted investments in fintech in this region.

The Payments & Transfers sector accounted for the largest number of new companies in SEA & SA – 72 (20.6% of the total), mostly concentrated in India. Meanwhile, Blockchain & Crypto and Exchange-traded assets featured 47 companies each (13.5%), most of which were based in Singapore. Finally, there were 38 new alternative lending companies (10.9%).

However, the total amount raised by all fintech companies in the region decreased to USD 12.7 Bn (-38.6% compared to 2021). Robocash Group analysts cite the lack of public information, as investment aggregators are still adding new company profiles. Still, the missing data is unlikely to make a significant difference in the total showing for 2022, especially compared to the previous year.

“The decline in the number of new fintechs greatly exceeds the reduction in the volume of investment attraction. Investors are opting for less risky strategies, wary of the incoming worldwide recession. The market is “cleansing”, leaving room for only the most sustainable fintech companies”, comment the analysts at Robocash Group.

Assuming the current decade-long trend holds, the number of new companies may grow by 21.6% in 2023 from the current 349 to 425. At the same time, the attraction of funds for all fintech companies may reach USD 13.2 Bn.

*All information was collected and aggregated from the following services: CBInsights, Tracxn, Crunchbase, Dealroom. The following countries were analysed in the study: Vietnam, Thailand, Singapore, Philippines, Myanmar, Malaysia, Laos, Indonesia, East Timor, Cambodia, Brunei, Sri Lanka, Pakistan, Nepal, Maldives, India, Bhutan, Bangladesh, Afghanistan.

Report Reveals 70% of Corporations & Financial Institutions are Frustrated with Their Payment Failure Rate

Published on

22 February 2023

Each Rejected or Repaired Payment Costs Businesses an Average of U.S. $12.10

LexisNexis® Risk Solutions today released the results of its True Impact of Failed Payments Report, a snapshot of cross-border payments performance on a global scale. The report assesses insights collected from 400 payment executives representing leading corporations and financial institutions across the APAC, EMEA, LATAM and North America regions. 

More than 70% of respondents are unsatisfied with their payment failure rate. Almost two-thirds of respondents (64%) indicated broken or failed payments negatively impacts staff workload. The costs associated with failure or delay only compounds these issues, with an average per payment fee of U.S. $12.10 for rejected or repaired payments. This cost is partially due to higher fees for large companies and the involvement of more expensive banks or more advanced solutions.

Problems with bank beneficiary name and address details are the most common source of payment delay or failure (21%). These details are also the single largest data payment element to be manually checked by humans, with 72% of respondents still confirming this data in that fashion.

Businesses and financial institutions rely on exceptional rates of Straight-Through Processing (STP), an automated electronic payment process that does not require human intervention. STP protects the integrity of critical supply chains and delivers a smoother experience for customers. Rapid digital acceleration in the payments space raises customer and supplier expectations for payments experiences so balancing speed, accuracy and safety at every touchpoint is essential.

“Customers expect a smooth payments journey and they will quickly abandon a transaction if they encounter too much friction,” said Dalbir Sahota, senior director, payments, LexisNexis Risk Solutions. “Our report shows that failed payments are detrimental to customer retention, increase staff workloads and create additional costs. Businesses must keep up with the competition at a time when technology and real time payment initiatives are rapidly changing the marketplace.

“STP offers an automated way for companies to offer customers a smooth payments process and the report illustrates the value of investing in this area. Free tools may sound attractive, but the financial reality is unappealing, with our report showing low STP rates among those that use the most basic of searches. Sophisticated payment data solutions enhance service levels and reduce costs associated with failed and repaired payments,” said Sahota.

Key Findings from the LexisNexis Risk Solutions True Impact of Failed Payments Report:

  • Payment Troubles Lead to Lost Customers: Companies that have the highest levels of STP payments and automation are very sensitive to failed and delayed payments and estimate they lose a significant number of customers due to these factors. Companies with 250 – 1,000 employees and those with more than 10,000 staff lose a higher percentage of customers than small companies.
  • Automation Shrinking the Labor Force: The average payment team size for the largest companies (10,000+ employees) is around 1% of the total workforce, with similar results in all regions. Other than in APAC, banks tend to have smaller payment teams than corporates, due to a higher level of automation.
  • Efficiency Essentials: Accuracy of payment details (40%), speed of payment processing (32%) and little-to-low manual labor (11%) are the three most important factors for cross-border payments processing.

Methodology

The True Cost of Failed Payments study was independently conducted in the fall of 2022 by Capgemini Invent® on behalf of LexisNexis® Risk Solutions. Capgemini Invent did not identify LexisNexis Risk Solutions as the research sponsor to participants. The study surveyed 400 decision-makers representing leading corporations, financial institutions, banks and non-financial corporations across the APAC, EMEA, LATAM and North America regions.

Download a copy of the True Impact of Failed Payments Report.

Hong Kong Budget – Bold Steps Needed For Economic Boost

Published on

17 January 2023

One of the largest professional accounting bodies globally, CPA Australia, has released its recommendations for Budget 2023-24 to revitalise the economy and create a better future.

  • 100 per cent increase in tobacco duty, consider a tax on non-recyclable plastic products
  • Offer a two-tiered e-consumption vouchers with a target disbursement period in the first half of 2023, with HK$2,000 as the base amount for all eligible Hong Kong residents, and an additional HK$6,000 for underprivileged groups (in total HK$8,000)
  • Maintain the HK$10,000 tax rebate on salaries tax and increase tax allowances

One of the largest professional accounting bodies globally, CPA Australia, has released its recommendations for Budget 2023-24 to revitalise the economy and create a better future. With an estimated HK$126 billion fiscal deficit for the financial year 2022-23 and HK$820 billion of remaining fiscal reserves, CPA Australia believes Hong Kong needs bold action to attract talent, improve the environment and boost the economy.

“Hong Kong’s economy is expected to rebound this year along with the resumption of cross-border travel and easing of COVID-19 restrictions,” Anthony Lau, Co-Chairperson of CPA Australia’s Taxation Committee – Greater China said.

“However, volatility, uncertainty and inflation pressures weigh on the recovery. We want the government to re-establish Hong Kong on the world stage, while improving public finances.”

Building Sustainable Public Finances, Promoting A Green Society

“Following three years of the pandemic, building a healthy and liveable society for Hong Kong residents is a priority. We want measures that create a better living environment,” Mr Lau said.

CPA Australia wants the tobacco duty increased to reduce smoking rates and alleviate the burden on public healthcare system. A 100 per cent increase in tobacco duty will generate around HK$8 billion in additional revenue in 2023-24. Further, the government should consider a tax on non-recyclable plastic products to reduce plastic consumption and waste.

“Hong Kong’s simple and low tax system is important to attracting companies and investment. We want the government to work with Mainland authorities to enhance the Hong Kong-Mainland of China Double Tax Arrangement (DTA) and help distinguish Hong Kong from regional competitors. This could include reducing the dividend withholding tax rate.”

“We want the capital investment entrant scheme reintroduced and eligibility expanded to Chinese nationals. Alternatively, the government could introduce an immigration program that provides residency status to investors making investment in strategic industries.”

Encouraging SME Transformation

Mr Janssen Chan, Co-Chairperson of CPA Australia’s Taxation Committee – Greater China said e-consumption vouchers have helped many SMEs digitally transform in the past two years.

“To build on that momentum, we suggest the government relaunch and increase funding to the Distance Business Program to help more businesses digitalise and expand their online presence.

“Though we need to start moving away from an expansionary approach in the budget, a modified version of the e-consumption voucher scheme could be considered for Hong Kong residents, with a focus on supporting lower-income earners, if the government considers the economic conditions require it.

“Government measures over the past two years have helped many SMEs stay afloat but uncertainty continues. We want measures like the Special 100 per cent SME Financing Guarantee Loan Scheme and the Pre-approved Principal Payment Holiday Scheme extended by one year.”

“To address the manpower shortage issue, the government can assist is to improve the chances of younger generations being able to buy a home in Hong Kong by helping with a down payment.

“Given SMEs are particularly struggling to attract and retain talent, the government may consider offering an additional tax deduction on salaries expenditure for companies hiring employees aged 60 or over, which is another pool of top talent.”

Reducing Cost of Living Pressures, Improving Living Standards, Attracting Talent

Theresa Chan, Deputy Chairperson of CPA Australia’s Taxation Committee – Greater China said Hong Kong residents were facing higher costs, particularly hurting low-income earners.

“To help ease cost pressures we want the HK$10,000 tax rebate on salaries tax maintained. Personal allowance, child allowance and married person’s allowances should be increased. The government should also consider increasing the salaries tax allowances at least in line with inflation.”

We also recommend an energy bills subsidy to assist with rising prices.

“To prepare for an ageing tsunami and to alleviate the burden on the public health system, we suggest increasing the cap on tax deductions for voluntary contributions to the MPF scheme to HK$100,000 and the Voluntary Health Insurance Scheme (VHIS) to HK$12,000 respectively. For taxpayers who are not policyholders of the VHIS, we suggest introducing a tax deduction on unreimbursed medical and health check expenses from private healthcare providers up to HK$12,000.”

“To attract talent to work and stay in Hong Kong, we suggest enhancing the Top Talent Pass Scheme by reducing the salaries tax rate for successful applicants by 50 per cent for the first two tax years, subject to a cap of HK$1.2 million of income.”

Arta TechFin And OSL’s Partnership To Create An End-to-end Virtual Asset Financial Service Ecosystem

Published on
/

16 February 2023

ARTA and OSL, both headquartered in HK, are jointly developing ecosystems to bring global VA access to institutional and retail clients.

Arta TechFin, a hybrid fintech platform in both traditional assets and virtual assets (“VA”), and OSL, the digital asset business division of BC  Technology Group, today entered into a strategic partnership (“partnership”) to create an end-to-end VA financial service ecosystem. 

Subject to obtaining required regulatory approvals, the partnership intends to offer a full spectrum of  regulated VA solutions, including origination of asset-backed security tokens, secondary trading of  physically-settled and cash-settled VA spot and VA derivatives, and custody of OTC and exchange traded VA. Riding on the tailwind of the Hong Kong Government’s progressive VA policies, our joint  effort will continue to support Hong Kong’s development as the global VA financial center. 

For primary market origination, ARTA shall use its best effort to appoint OSL as the placing agent for  its security token offering in Hong Kong. ARTA’s corporate finance team shall take the lead in  tokenization technology service, deal sourcing and structuring, and fund raising. This activity is subject  to regulatory approval. 

For secondary trading, OSL shall be appointed as ARTA’s exclusive trading partner to conduct  physically-settled VA trading activities for a period of 12 months. Where OSL engages in cash-settled  VA derivatives trading, ARTA shall also provide OSL with cash-settled VA derivatives trading services  including but not limited to Chicago Mercantile Exchange listed VA futures and options and Hong Kong  Exchange listed VA future exchange traded derivatives. 

OSL, through an omnibus account model, will support ARTA’s end-clients with institutional-grade performance VA trading and safe-keeping facilities.  

Global Reach, Local Touch

ARTA and OSL, both headquartered in HK, are jointly developing ecosystems to bring global VA access to institutional and retail clients. Investors can benefit from the full protection of the Hong Kong  regulatory regime, including client assets segregation, financial transparency, and stability. Regulated  traditional financial and VA services are seamlessly integrated to create the next generation  ecosystem for better liquidity, product variety, and security. 

“This game-changing partnership gives birth to an institutional-class total VA solution that serves  global institutional and individual clients. Hong Kong’s progressive VA policies lay a strong foundation  for us to take advantage of this unique opportunity. We are committed to supporting the development  of a vibrant VA ecosystem in Hong Kong,” said Eddie Lau, ARTA’s Chief Executive Officer. 

“We are thrilled to enter into this strategic partnership with ARTA. We look forward to servicing the  digital asset trading and fundraising needs of ARTA and its clients. This partnership will allow us to 

leverage our expertise in the digital asset space to drive growth in the fintech industry,” said Hugh Madden, Chief Executive Officer of BC Group and OSL. 

GBG Reveals Top Trends For Financial Services And Fraud Landscape In 2023

Published on

14 February 2023

GBG unveiled its top five predictions for 2023 as financial institutions (FIs) in Asia Pacific continue to navigate the challenges of global economic uncertainty.

GBG, the global technology specialist in fraud and compliance management, identity verification and location data intelligence, today unveiled its top five predictions for 2023 as financial institutions (FIs) in Asia Pacific continue to navigate the challenges of global economic uncertainty.  

Dev Dhiman, Managing Director, APAC, GBG said: “In 2023, we anticipate demand for greater transparency and identity security to move the business agenda forward in financial institutions. The world’s greatest innovations have emerged in times of major economic and political turmoil, and digital investments will remain the core foundation of true transformation in safeguarding financial institutions from modern digital risks and cyber threats.” 

As all eyes turn to what this year may bring, here are five key predictions for how FIs are expected to be impacted in the evolving fraud landscape: 

Expect tighter regulation to bolster fraud mitigation

The financial sector today is experiencing spikes in fraudulent online transactions as cybercriminals now have more attack surface to exploit as businesses continue to digitalise in the post-pandemic era. At least 51 per cent of organisations worldwide have encountered fraud in the past two years. Whilst the Asia Pacific region’s growing number of online users and digital payment channels have given rise to a more complex fraud analysis environment.  

Scaling fraud detection to growing digital transaction volumes (39 per cent) and identity verification (38 per cent) were among the top challenges faced by Asia Pacific FIs, according to a TABInsights study commissioned by GBG. As FIs seek to expand their digital offerings, regulators are expected to further tighten fraud prevention and compliance policies. The findings show the most critical gap in fraud risk investigation lie in inadequate data standardisation and governance (38 per cent), and fragmented data with piecemeal systems and software (32 per cent), pushing institutions to increasingly explore regulatory technology solutions.  

Government regulatory bodies are imposing hefty fines on FIs who fail to meet data protection regulations and anti-money laundering (AML) compliance requirements. GBG’s survey findings show stringent supervision and penalties on FIs have resulted in increased monetary losses in the form of regulatory fines, the highest-ranking component of fraud loss at 41 per cent, compared to direct fraud losses (28 per cent) experienced by FIs. 

Digital risk and cybersecurity are starting to converge amid rapid digitalisation 

Rapid digitalisation over the course of the pandemic sparked an uptick in self-service and online services. The focus has now shifted to central banks taking a proactive approach in policymaking and risk management strategy towards cybersecurity to combat digital fraud. The study revealed that FIs in the past year have expected money laundering (69 per cent) and malware (64 per cent) to continually grow amid the escalating threat dynamics. This underlines the urgent need for institutions to address accelerating fraud risks and adopt stronger fraud prevention capabilities. 

Singapore saw a loss of S$346.5m to social engineering scams in the first half of 2022 alone, a significant portion compared to the S$453m stolen by scammers in the entire year of 2021. The evolving risk dynamics forcing FIs to drive the adoption of advanced fraud analysis, including device fingerprinting, user behaviour analytics, and account identification verification, highlights the digital trust imperative that will shape the consumer trend landscape. 

In 2022, organisations across Australia and New Zealand (ANZ) faced an unprecedented record number of malicious, large scale data breaches. As a result of these cyber-attacks, FIs are ramping up security measures and prioritising identity verification as the impact of identity theft continues to grow in this region. In fact, FIs in ANZ are prioritising solutions that offer a single view of their customer’s journey from identity verification through to fraud monitoring capabilities on one, seamless platform. Whilst confidently knowing they are keeping their customers’ data safe, improving their efficiencies and reducing manual operations.  

FIs will ramp up AI adoption in response to AI/ML tools exploitation to evade fraud detection

Artificial intelligence (AI) is fuelling the development of a more dynamic world, but fraudsters are also misusing these same technologies for ill gain as deepfakes, AI-supported hacking and password guessing, and impersonation techniques take rise. FIs are increasingly adopting machine learning (ML) capabilities to train models in recognising the data correlation to a known fraud scenario, with 47 per cent of FIs having already adopted ML tools, while 37 per cent are now beginning to use them. 

Advance technologies have made fraud more accessible to cybercriminals and validating the authenticity of communication is key to keeping up with sophisticated fraud techniques. Findings show strong ML adoption in Indonesia (71 per cent) and Thailand (69 per cent) and an uptick in the adoption of robotic analytics in Vietnam (67 per cent), Singapore (63 per cent) and Malaysia (62 per cent) to address fraud prevention and increase false positives detection. 

As the volume of fraud continues to rise to new heights in 2023, near-real time decisioning through predictive analysis and a holistic view of end-to-end financial crime prevention are crucial components of FIs’ digital initiatives as they navigate an increasingly complex fraud landscape. 

Cloud adoption becomes a focus to be better equipped for the onslaught of sophisticated fraud typologies

The survey indicates growing cloud adoption amongst FIs—69 per cent say they prefer their fraud management solutions to be hosted by solution providers rather than on-premise (31 per cent)—as their cloud strategy is split almost equitably between hybrid, private and public cloud. 

Legacy architecture, silos of structured and unstructured data, and data governance, have accelerated the shift towards more agile, scalable and flexible cloud-based infrastructure as FIs upgrade legacy systems and invest in end-to-end financial crime prevention solutions. For Singapore’s mature banks, their technology investments will be geared towards real-time transaction monitoring, alternative data analysis, and machine learning capabilities to combat fraud. 

A robust identity verification and authentication solution is essential for fraud prevention and risk management. FIs are paying attention and beginning to leverage modern cloud technologies and taking a more structured, strategic approach with proactive multi-pronged data and technology initiatives in a race to future-proof themselves.  

Expect major changes to cryptocurrency markets as fraudster exploit vulnerabilities

Emerging blockchain technology (48 per cent) that forms the underlying foundation of decentralised finance (DeFi) and the growth of cryptocurrencies (31 per cent) have emerged as top concerns among FIs. Phishing, routing attacks and account takeovers are posing potential threats on blockchain networks. The risk perimeter is expanding with the uptick in new technologies such as cloud, open banking, blockchain and cryptocurrencies. Cryptocurrencies are among the leading payment methods on the darknet, and regulators are watching closely to curb the use of cryptocurrencies in money laundering and criminal activities.  

Unfortunately, organisations across all sectors are at risk from cyberattacks and the rising sophistication of data breaches has highlighted the need for all to urgently take action to improve their data security practices. Whilst cyberattacks are not new, they are increasing in frequency and in nature, which is changing the paradigm of data security. With financial crime risk higher than ever, FIs need to move beyond a traditional reactive approach and adopt stronger measures, such as robust identity verification and authentication tools, and real-time threat detection to proactively combat fraud.

Hong Kong SMEs Regain Confidence In Business Outlook But Remain Concerned With Economic Downturn

Published on

14 February 2023

Despite having a positive outlook, many SMEs expressed concerns about a possible economic downturn in Hong Kong and other markets that could impact their business.

Small and medium enterprises (SMEs) in Hong Kong have regained confidence in their business and the economy, despite having ongoing concerns about a possible economic downturn in Hong Kong and other markets, customer acquisition challenges, and rising business costs, according to research released by QBE Hong Kong today.

The annual SME survey shows that almost two out of five (39%) Hong Kong SMEs reported a decline in overall sales and their economic outlook had become more negative in the past 12 months, while one-third (33%) reported the opposite. However, when asked about their outlook for the next 12 months, close to half (47%) of SMEs anticipate business sales rising and a positive economic outlook.

Despite having a positive outlook, many SMEs expressed concerns about a possible economic downturn in Hong Kong and other markets that could impact their business (38%), which saw a significant increase of 8 percentage points compared with 2021. The top three economic conditions they think will worsen are: deteriorating investor and consumer confidence, rising global inflation, and decreasing demand from customers within Hong Kong. Besides an economic downturn, SMEs are also worried about customer retention and acquisition (37%) and rising business costs (34%).

It is worth noting that concerns in directors’ liability due to allegations of being involved in wrongful acts have increased gradually from 18% in 2020 to 26% in 2022. A possible explanation is increased regulatory supervision.

With the above business concerns, SMEs expected to increase spending on staff training, staff numbers, staff size and marketing, while remaining focused on cost control in the next 12 months.

SMEs Are Reconsidering Increasing Overseas Representation

Last year, the number of Hong Kong SMEs with overseas representation dropped to 29% from 37% in 2021. However, despite the economic uncertainty, almost half (47%) of SMEs intend to increase their overseas representation over the next one to two years, echoing their worries about customer acquisition within Hong Kong. Despite these ambitions, awareness among SMEs of the need for multi-country insurance declined from 43% in 2021 to 37% in 2022. Knowledge of multi-country insurance is highest among larger SMEs, and those already internationalised intend to expand further. Among SMEs without an international presence,14% said they plan to expand into other markets, and 72% would consider buying multi-country insurance.

“While some SMEs are concerned about potential economic headwinds, they appear to be to cautiously optimistic about the year ahead and hope to expand within Hong Kong and overseas. Managing insurance policies across different markets can be a challenge, from ever-changing local laws, market practices and coverage requirements, to tax regulations, logistics, and cultural differences. However, their concerns about cost control may lead them to overlook the value of insurance as a tool to manage risks,” said Lei Yu, Chief Executive Officer for North Asia and Regional Head of Distribution, QBE Asia.

Despite Concerns About Business Risks, A Minority of SMEs Have Relevant Insurance

The business risks most concerning Hong Kong SMEs remain the loss of income due to business interruptions (75%), losing key staff (70%) and equipment breakdown (69%). While SMEs’ concerns about these events have increased steadily over the last three years, only 15%, 16% and 18% held the relevant insurance, respectively, to ride out such possibilities.

“Strategic planning for business continuity is critical to SMEs as it ensures business resilience and helps them respond quickly in case of interruptions. Insurance can play a critical role in helping SMEs ride out business interruptions including equipment breakdowns, damage to property and public liability claims as they navigate an uncertain economic environment”, said Lei. “At QBE, we believe having the right insurance protection in place gives SMEs peace of mind and the confidence to focus on their business. We are always ready to provide advice and guidance to help SMEs find the most appropriate and cost-effective insurance solutions for their business.”

Commissioned by QBE Hong Kong, the SME Survey draws on the responses from 422 SMEs from a wide range of industries in October 2022.

Survey of Finance Professionals Finds Global Economy Subdued With Weaknesses Persisting

Published on

2 February 2023

The latest economic conditions report from ACCA and IMA paints a picture of a steady but weak global economy.

The global economy shows signs of steadying, however, many indicators remain weaker than a year ago, according to the Global Economic Conditions Survey (GECS) for Q4 2022 from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants). GECS is the largest regular economic survey of accountants carried out globally each quarter by IMA and ACCA.

The Q4 report shows the GECS Confidence Index bounced slightly for the second consecutive quarter, perhaps reflecting hopes that the worst of the central bank tightening might soon be over, and that China might successfully relax its zero-COVID restrictions.

The full report is available at https://www.imanet.org/about-ima/GECS

Even so, the Confidence Index remains below its median reading for the period since 2012. There is also not much positive news from the other three economic indicators – new orders, capital expenditure (CapEx), and employment. CapEx picked up marginally but remains below the median of the same period; new orders and employment showed a further modest deterioration.

Taken as a whole, the results are consistent with a subdued macro-economic outlook. But the good news is that they do not appear yet to be at levels consistent with an outright global recession in 2023 – even though this is the base case scenario for many economic forecasters.

A good cross-check is provided by the two GECS “Fear” indices, which reflect respondents’ concerns that customers and/or suppliers may go out of business. Reassuringly, these were little changed from the Q3 2022 survey, despite the sharp rise in borrowing costs and the prospect of negative corporate-earnings growth in 2023.

“What stands out is the improvement in confidence in both Western Europe and North America,” said Jamie Lyon, head of skills, sectors and technology at ACCA. “The swing in the former more than reverses the fall that we saw in Q3 2022, when worries about the impact of higher energy prices were at their most intense. The improvement in confidence probably reflects hopes that the Russia–Ukraine conflict can be contained, and that there will be sufficient natural gas to see Europe through what now looks increasingly likely to be a mild winter. Looking to the rest of the world and emerging markets however, 2023 could still prove to be a challenging time.”

Looking back at 2022, North American results were particularly striking in how severely confidence was reduced by Russia’s invasion of Ukraine and by the ensuing spike in commodity prices. The GECS Confidence Index for North America in Q2 2022 actually fell below the 2020 pandemic lows. It has begun to recover during the GECS Q3 and Q4 2022 – and that is despite the aggressive tightening of monetary policy by the U.S. Federal Reserve. Interestingly, while the other macro-economic indicators – on capital spending, employment, and new orders – have pulled back, the retracement has not been as severe. The GECS results suggest that North American respondents may be less worried than they were about Ukraine, but the risk is that they could be underestimating the impact of the Fed’s tightening on the U.S. economy in 2023.

“Global confidence has edged up for the second consecutive quarter as cost concerns have eased and with worries about accessing finance and securing prompt payment having not gotten any worse,” said Loreal Jiles, vice president of research and thought leadership at IMA. “This is something of a surprise given the global rapid tightening of monetary policy by the world’s central banks. The past 12 months have seen the most aggressive tightening of policy in more than 40 years, in pace, scale and breadth. It is strange that this has not yet had a material impact on financing conditions and corporate cash flows. But monetary policy works with long and variable lags, which suggests that this may become more of a problem later in 2023.”

The global economy faces three major uncertainties.

First, have central banks overdone or underdone the amount of tightening that they have imposed?

Second, can China engineer a smooth exit from zero-COVID without additional lockdowns?

And third, will wage pressures ease without a major weakening of the employment market?

One of the unresolved questions from the COVID crisis is whether the combination of early retirement, prolonged ill health, and the move to hybrid working has profoundly altered the balance of power between employers and employees. These changed employment-market dynamics may make it harder for central banks to bring core inflation back to their 2% targets.

The answer to each of these questions will become much clearer as 2023 progresses.

Fiserv To Support New Payment Flows With Major Payment Institution License From MAS

Published on

1 February 2023

Company’s local operating entity granted license to provide merchant acquisition and domestic and cross border money transfer services under the Payment Services Act.

A Fiserv, Inc. operating entity that provides payment solutions for merchants in Singapore, First Data Merchant  Solutions Private Limited, has been granted a Major Payment Institution (MPI) license by the Monetary Authority of Singapore (MAS), effective January 1, 2023.  

The license allows the company to provide merchant acquisition services and domestic and cross-border money transfer services under the Payment Services Act (PS Act) 2019.  

Fiserv, a leading global provider of payments and financial services technology  solutions that has its regional headquarters in Singapore, has been providing  solutions to some of the largest banks, fintechs, and merchants in Singapore and  across the Asia Pacific region for over two decades. 

Fiserv provides end-to-end payment acceptance solutions for small businesses in  Singapore as well as solutions for large enterprise clients, facilitating integrated  payment acceptance across physical and digital channels and offering a wide range of  payment methods locally and at global scale.  

The MPI license permits the continued offering of merchant acquiring services in  Singapore and will allow Fiserv to support new payment flows for its clients including  cross-border funds transfer services and real-time account transfers. 

Fiserv has a well-established Global Risk and Controls Framework and Global  Cybersecurity Services to help ensure adherence to the regulations established under the PS Act in Singapore, as well as the regulatory bodies in markets around the world  in which the company operates. 

Fiserv, as part of the MPI license obligations and its own internal standards, will  continue to enhance its rigorous compliance program, which includes anti-money  laundering and anti-terrorism financing measures, as well as industry leading cyber  security standards to protect customer data. 

“Fiserv has a history of payments innovation in Singapore, and we are well-positioned  and committed to expand our merchant acquiring business in the country and  beyond, continuing to support the merchant community with robust and secure global  payments technology enabling locally relevant payment acceptance solutions that  meet the demands of today’s consumer,” said Suhaib Khanyari, General Manager of  ASEAN at Fiserv. 

CEOs Pessimistic About Revenue and Economic Growth

Published on

27 January 2023

CEOs expect continued challenges throughout 2023: only 46% are confident that their company’s revenue will grow over the next year, while just 17% expect global economic growth to increase.

GLG, the world’s insight network, today released the findings of its fourth annual global CEO survey, which asked more than 450 CEOs around the world about the economic impacts of 2022 and their priorities and outlooks for the year ahead. The survey found that CEOs expect continued challenges throughout 2023: only 46% are confident that their company’s revenue will grow over the next year, while just 17% expect global economic growth to increase (compared to 71% of respondents heading into 2022).

Geopolitical uncertainty and economic headwinds were among the survey’s key themes. Nearly 90% of CEOs ranked the former as a top concern, fueled in large part by Russia’s ongoing war in Ukraine. More than 80% of CEOs expect global recession and inflation to be top factors impacting businesses in 2023.

“Many of the challenges of the past year are expected to continue into 2023, and CEOs are strategizing accordingly,” said GLG CEO Paul Todd. “As businesses navigate rate hikes, market volatility, talent acquisition and retention, and more, GLG is standing by to provide timely insights and critical perspectives.”

The survey also features takeaways from CEOs on the labor market, return to office, investment forecasts, and corporate social responsibility, among other subjects.

“By digging into the perspectives of almost 500 CEOs, this survey reveals not only where business leaders align, but also where their outlooks differ,” said GLG Head of Network Membership Nick Barnard. “The CEO Survey is one small example of GLG’s ability to canvas senior B2B populations for surveys – whether they’re CTOs, medical lab technicians, or industrial procurement managers. GLG Surveys, especially layered on 1:1 conversations, power more informed decisions for investors and companies alike.”

For 25 years, GLG has brought decision makers the insight it takes to get ahead. GLG Surveys help clients meet their research objectives using the world’s most diverse source of senior B2B expertise, including the perspectives of CEOs and other executives across industries and geographies.

The GLG Surveys team conducted the study in November 2022. Access the full report here.

Despite Global Slowdown, Asia’s Economies Show Resilience And Growth For 2023

Published on

26 January 2023

Asia is likely to prove resilient if investment and financial flows are directed to digital and green innovation to underpin sustainable growth and investment.

Asia can defy a global economic slowdown in 2023 through an acceleration in digital transformation, greater regional coordination, and balanced monetary policies, according to new research from the London-based think tank, Asia House. 

The Asia House Annual Outlook 2023 examines how Asia’s economies can prevail and deliver robust growth through increased domestic demand for goods and services, countering the global headwinds of high inflation, tighter monetary policy and increasing geopolitical tensions.  

Key among the Annual Outlook’s recommendations are those relating to prioritising innovation – to spur carbon pricing, lower green premiums for zero-carbon alternatives, and boost underfunded and high-impact projects with blended finance.

‘Asia is likely to prove resilient if investment and financial flows are directed to digital and green innovation to underpin sustainable growth and investment,’ the Annual Outlook finds.

However, and mirroring the global outlook, Asia is susceptible to risk and faces multiple and multi-faceted shocks, such as energy-price volatility, geopolitical conflict, and higher borrowing costs.  

Asia House assessed eight key economies in Asia across metrics conducive to meeting these challenges. In two indices published today, the think tank analyses the performance of China, India, Indonesia, Japan, Malaysia, the Philippines, Thailand, and Vietnam in the critical areas of green finance and digitalisation readiness – areas that will unlock future productivity and enable sustainable growth across the continent.

Asia House’s Economic Readiness Indices suggest that prioritising economic readiness to tackle both climate change and digitalisation, and the policies that link the two, will create higher growth.

  • China will see increased growth – albeit sluggish – having abandoned its zero-Covid policies. It also shows an improvement in its scores for economic readiness for green finance.
  • India will see continued economic recovery and is on track to be one of the fastest growing economies globally. However, the country is susceptible to financial volatility and it has the lowest readings in readiness for both green finance and digitalisation.
  • Japan is likely to bear the brunt of multiple financial shocks, including a weak yen and higher energy prices – both of which reduced its Readiness Index for green finance. Japan’s digital readiness scores improved for 2023.
  • Vietnam is likely to register one of the strongest economic growth rates in 2023, owing in part to its vibrant external sector and domestic policy settings that will catalyse inward investment.
  • Malaysia is making significant strides, underpinned by the strength of domestic demand and digitalisation.
  • Thailand‘s economic readiness readings for green finance registered the largest rise according to Asia House.
  • Indonesia will show economic resilience in 2023. It has struck the right balance in monetary policy in terms of encouraging growth while taming inflation.
  • The Philippines is likely to grow, which presents an opportunity for the country’s policymakers to improve the domestic ecosystem for green finance and digitalisation.

View the Asia House Economic Readiness Indices in the Executive Summary here. The Indices form a part of the Annual Outlook, published by the think tank to track key economic trends across Asia.

1 2 3 4 … 68