COVID-19

Wrap In Finance: 2022’s High Inflation Environment

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Fatihah Ramzi, DigitalCFO Asia | 28 November 2022

In 2022, there has been a noticeable tightening of global financial conditions, which is in part an intended result of policy normalization.

The COVID-19 epidemic, Russia’s ongoing war with Ukraine, and other geopolitical and economic uncertainties have caused disruptions in the markets as well as persistently high inflation, a problem the world economy has not encountered in decades. Since inflationary pressures were reduced after the global financial crisis, central banks maintained interest rates very low for several years, and investors grew acclimated to a low-volatility environment.

Economic growth was aided by the consequent loosening of financial conditions, but it also encouraged risk-taking and the development of financial vulnerabilities. In order to prevent inflationary pressures from becoming entrenched and inflation expectations from de-anchoring, monetary authorities in developed economies are speeding up the pace of policy normalization now that inflation is reaching multi-decade highs. Despite significant regional variations, policymakers in developing markets have continued to tighten policy in response to rising inflation and currency pressures since they began raising interest rates in 2021.

In 2022, there has been a noticeable tightening of global financial conditions, which is in part an intended result of policy normalization. As a result, several emerging and frontier market nations with worse macroeconomic fundamentals have seen capital outflows. There is a risk of a disorderly tightening of global financial conditions, which might be exacerbated by vulnerabilities created over time. The global economy is confronting a number of issues, and authorities are continuing to normalize policy to manage excessive inflation.

In the current macro-financial context, which is unfamiliar to many policymakers and market participants, there is a focus on some of the most important conjunctural and structural vulnerabilities in advanced economies and developing markets. In April 2022, the outlook for the world economy significantly deteriorated.

The possibility of higher-than-expected inflationary pressures, a worse-than-expected slowdown in China due to COVID-19 outbreaks, lockdowns, and further deterioration in the real estate market, as well as additional fallout from Russia’s invasion of Ukraine, are just a few of the downside risks that have materialized. The outcome has been a worsening of the global economic slump and persistently rising inflation.

Many Frontier Markets Faced Defaults & Difficult Restructuring

Frontier markets in 2022 face difficulties as a result of weakening fundamentals, tightening financial conditions, and a high level of sensitivity to commodity price volatility. Since 2010, the median debt-to-GDP ratio for frontier markets has almost doubled, however 2022 saw a little reduction. Government debt interest costs have risen steadily throughout the year, putting more strain on liquidity and raising the possibility of unfavorable policy outcomes like crowding out of public investment.

To reduce local refinancing costs and regain access to global markets, credible medium-term fiscal consolidation plans are essential. Despite the midyear decline brought on by escalating recessionary fears, commodities prices—particularly for metals and oil—remain higher than they were before the outbreak. The macroeconomic outlook for importers has been further dimmed by this, yet many frontier markets export commodities and have profited from increased prices.

By raising the policy trade-offs – higher inflation calls for tighter monetary policy, but aiding the most vulnerable would require additional fiscal space or expenditure reprioritization – the rise in global food prices, on the other hand, is escalating vulnerabilities in frontier markets. Defaults could occur in a situation with weak fundamentals and low investor risk appetite.

In the event that frontier markets go into default, a growing number of complex creditors and holes in the global framework for dealing with sovereign debt could result in protracted debt negotiations involving a wide range of creditors, further delaying market access and driving up the cost of financial distress. A protracted period of high borrowing rates could result in increased policy uncertainty and a debt overhang for years to come, even in the event of an actual default.

Policy Recommendations

Policymakers all around the world have continued to normalize monetary policy despite inflation reaching levels not seen in decades and price pressures expanding beyond those associated with food and energy prices. In many nations, especially in advanced economies, the rate of tightening is intensifying in terms of frequency and size. Some central banks have started to shrink their balance sheets as they get closer to normalization.

To bring back price stability, financial conditions must be tightened. Monetary policy can decrease domestic demand to alleviate widespread demand-related inflationary pressures, but it cannot resolve lingering pandemic-related constraints in global supply chains and disruptions in commodity markets owing to the crisis in Ukraine. A necessary condition for long-term and inclusive economic growth is price stability. The upside risks to the inflation forecast suggest that central banks should continue to normalize monetary policy in order to prevent the emergence of persistent inflationary pressures.

They must take decisive action to return inflation to the target level while preventing any de-anchoring of inflation expectations that would jeopardize the credibility they have worked so hard to establish over the years. Policymakers should take note of historical lessons: going too slowly to control inflation and restore price stability necessitates a costlier tightening in the future as well as more difficult and disruptive economic adjustments. Lessons can be learned from the US monetary policy’s historical experience in the 1970s and early 1980s.

It is important for central banks to keep this experience in their sights as they navigate the difficult road ahead. With policy rates moving away from the effective lower bound that has prevailed in many countries since the global financial crisis, policymakers should rethink the modalities and objectives of the forward guidance they provide. The high uncertainty clouding the economic and inflation outlook hampers the ability of central banks to provide explicit and precise guidance about the future path of monetary policy. 

But in order to maintain credibility, it is essential that they are transparent about their policy function, including the goals, intertemporal trade-offs, and procedures needed to bring inflation down to target. To guarantee orderly market reaction and prevent excessive volatility, clear communication about the need to further normalize policy in line with the evolving inflation forecast is also crucial.

With higher interest rates and normalization, businesses can expect inflation to go back to normal levels in 2023. Having survived a high inflationary year, businesses should give themselves a pat on the back and welcome the incoming year with open arms. Although other challenges and disruptions may come their way, it is evident that businesses of today must be fit to survive a highly volatile climate. 

Businesses Must Stay Vigilant Amid More Challenging Financial Conditions

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Fatihah Ramzi, DigitalCFO Newsroom | 25 November 2022

Companies that are vulnerable to shocks should improve their resilience as limiting the impact of present and potential hazards requires resilience.

The Monetary Authority of Singapore (MAS) advises businesses and the financial sector in Singapore to remain cautious in the midst of more difficult circumstances despite the fact that they are still able to withstand disruptions to the financial system.

According to MAS’s annual financial stability study, businesses’ financial health improved throughout the COVID-19 pandemic recovery and citizens continued to see substantial job growth and salary increases. 

The government expects Singapore’s economy to expand between 0.5% and 2.5% next year, which is less than the 3.5% growth anticipated this year. A solid labor market and high import inflation are projected to keep inflation high, and continued tightening of financing conditions has increased the burden of debt servicing on borrowers, according to MAS.

For the fifth time in the year, MAS tightened monetary policy in October to assist in containing inflation. According to the most recent data, core inflation slightly decreased in October to 5.1%, but is still expected to remain high over the coming quarters.

The “unwinding of pandemic-induced precautionary buffers” has led to an increase in domestic measures of vulnerability for the business and financial sectors, according to MAS. MAS urged increased caution from businesses.

This will give them some protection against the anticipated further tightening of financial conditions in the upcoming quarters. According to MAS, businesses should continue to maintain proper buffers, including having enough liquid assets and effectively managing the debt’s maturity.

Global Risks Intensified

The MAS’s evaluation of Singapore’s financial system’s resilience, influenced by its examination of domestic and international risks and vulnerabilities, is presented in the annual financial stability review. The threats to the forecast for global financial stability have gotten worse as the world recovers from the COVID-19 pandemic.

It found a “worsening growth-inflation nexus,” with growth forecast to decline substantially over the coming year and inflation projected to stay well beyond many central banks’ goal ranges. The prognosis for commodities prices and supply chains remains uncertain due to the ongoing Russia-Ukraine conflict.

The most pressing concern is a potential breakdown in the fundamentals of global funding markets and cascading liquidity pressures on non-bank financial institutions that may soon spread to banks and corporations. In order to prevent a disorderly asset liquidation, tighter financial conditions and extremely volatile markets could result in liquidity imbalances that central banks and fiscal authorities would need to effectively handle.

According to MAS, the debt sustainability of weaker companies may become stressed, which would worsen the asset quality of banks. It also made clear that a rise in global risk aversion might lead to a further reduction in funding for emerging markets. However, banks are in a better position than they were during the global financial crisis of 2007–2008 to manage credit risks and absorb losses.

Companies Remaining Resilient

According to MAS, businesses in the corporate sector are coping with a dramatic slowdown in growth, a continuous increase in input costs, and more quickly tightening financing conditions. Due in part to the normalization of precautionary liquidity levels accumulated during the epidemic, companies’ risk has marginally increased.

According to MAS, notwithstanding a decrease, expected growth outcomes across sectors are likely to remain uneven. Corporate earnings have recovered broadly during the past year, with the exception of the hotel and restaurant and construction sectors; nonetheless, profit margins may begin to decrease in the near future.

However, should concerns materialize, the improvement of businesses’ financials over the previous year could offer some protection. According to the report, businesses typically have sufficient buffers to absorb shocks, but highly leveraged companies and smaller companies with less robust cash reserves would be particularly vulnerable if cost pressures persisted while revenue growth slowed.

Having said that, companies that are vulnerable to these shocks should improve their resilience. Limiting the impact of present and potential hazards requires resilience. Business executives will need to comprehend evolving patterns as well as adapt and develop resilience because disruptions are likely to continue.

Study Finds Rising Cost of Employee Benefits a Top Concern for Asia Pacific Businesses

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DigitalCFO Newsroom | 23 November 2022

The insights from the study aim to help employers quantify and qualify employee benefits and assess how their organisations can increase workforce resilience amid an increasingly volatile talent market.

  • 57 percent of employees are not fully clear about the benefits provided by their organisation
  • 2 in 3 employers report their benefits offering does not fully support their diverse workforce
  • 1 in 2 employers did not have a benefits strategy

Aon plc, a leading global professional services firm, has published its 2022 Asia Pacific Employee Benefit Trends Report, which evaluates the changing expectations of employees and the trends in employee benefit strategies in the region. The insights from the study aim to help employers quantify and qualify employee benefits and assess how their organisations can increase workforce resilience amid an increasingly volatile talent market.

The Aon study revealed that 55 percent of employers found that increase in benefit plan cost was their top challenge followed by 54 percent reporting unavailability of benefit packages that offer diversity, options, and flexibility to attract and retain talent.

Benefits Strategy

Exacerbated by the COVID-19 pandemic there has been a rapid and significant change in employee expectations in the region. Employees increasingly seek a work environment that supports their mental health and wellbeing, with increasing numbers asking for remote work arrangements, meaningful work and shorter hours. Employers recognise this with 35 percent of those surveyed reporting that 1 in 4 of their employees may work remotely in future.

However, while employee wellbeing was a key priority for 46 percent of the employers surveyed, 1 in 2 of the companies indicated that they lacked a clear benefits philosophy and that mid to longer term benefits strategy was a key future priority for them. Furthermore, 1 in 5 companies did not review their benefit offerings on a regular basis.

Tim Dwyer, chief executive officer of Health Solutions for Asia Pacific at Aon, said: “Employers in the region need to recognise the shift in employee work motivations resulting from COVID-19 and rethink their benefits strategy. To ensure they build a resilient workforce that can thrive during times of ongoing change and complexity, employers must leverage available anonymised and aggregated data insights around health and wellbeing, alongside employee feedback to gain insight into needs and expectations. These insights can inform decisions on how to manage the evolving structure of work or more specific solutions, such as ways to achieve a healthier and more inclusive team. Apart from the diversity and flexibility of benefits, there is a need to communicate the benefits employees receive more clearly.”

Benefits Diversity and Communications

Talent attraction and retention is key for organisations with 28 percent reporting an increase in turnover of more than 5 percent in 2022. In the face of rising inflation and skill shortages, employers are offering holistic compensation packages, including benefits to attract and retain people with the right skills. However, 41 percent of employers reported that their benefits were not sufficient to fulfil employees’ needs and 45 percent found that their benefits were perceived as ‘below market’.

The study also found that 1 in 3 employers plan to implement flexible options or a choice programme in the near future, leveraging digital tools and voluntary benefits. Most prevalent locations whereemployers are implementing a flexible benefits programme are Philippines, India, China, Singapore, Malaysia, and Hong Kong.

Apart from a focus on enhancing benefits choices for the diverse workforce, the study also found that there are issues with the communication of benefit offerings to employees. Fifty seven percent of employers confirmed their employees were not fully aware of the benefits provided by the organisation, even though 3 in 4 employers communicated benefits through email and 41 percent used a digital benefits platform, with more companies moving toward providing a ‘digital benefits home hub’, as an access point for all things benefits.

Simon Thompson, practice leader for Health Solutions for Asia Pacific at Aon said, “Since the COVID-19 pandemic, there has been heightened expectations from employees for meaningful work, mental and physical wellbeing and work-life balance. These expectations are different for various talent groups; therefore, a standardised benefit offering may not appeal to all. Businesses therefore must have a clear employee benefit strategy catering to the various talent groups and ensure benefits are communicated often, leveraging both digital and more traditional approaches, whilst balancing sustainable benefit plan costs. A clear benefits and communication strategy will help businesses make better workforce decisions based on employee health and wellbeing data, talent attraction and retention outcomes, benefits spend and business performance – and ensure all elements are aligned to build a resilient workforce.”

Despite Rising Manpower Shortages, Singapore’s Labour Market Improved On All Fronts In 2022

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DigitalCFO Newsroom | 10 November 2022

The report highlights key trends and challenges that are impacting and transforming Singapore’s industries and workforce, as well as consolidates the latest salary and job developments across key industries. 

PERSOLKELLY, the leading HR solutions and recruitment company headquartered in Singapore, has released the 2023 Singapore Salary Guide in collaboration with SkillsFuture Singapore. The report highlights key trends and challenges that are impacting and transforming Singapore’s industries and workforce, as well as consolidates the latest salary and job developments across key industries. 

The study, which concluded in July 2022, focused on the following themes: Singapore Labour Outlook, Commentaries, as well as Industries. Salary figures included in the 2023 Singapore Salary Guide are derived from combining the expert market knowledge of senior recruitment professionals within the PERSOLKELLY Singapore network, as well as actual job placement data recorded on the PERSOLKELLY Singapore database. 

Singapore’s Improving Labour Market in 2022

Singapore’s labour market continued to improve on all fronts in the first quarter of 2022, with total employment expanding to 42,000. Resident employment exceeded pre-pandemic levels at 3.9% higher than in December 2019, while unemployment rates have continued to trend down to pre-pandemic levels. 

Singapore saw a rise in growth sectors such as financial services, information and communications, professional services, as well as health and social services among resident employment. However, consumer-facing sectors saw a decline largely due to the seasonal pattern of temporary workers hired for year-end festivities leaving in the following quarter. 

Job vacancies continued to rise, reaching a new high of 126,100 in Q2 2022. Due to a decline in unemployed persons and increase in vacancies, the ratio of job vacancies to unemployed persons also increased to its highest since 1998. 

With border restrictions relaxing significantly, the non-resident workforce is expected to continue to recover, catching up with resident employment growth and alleviating the current labour market tightness. At the same time, amid a weaker external economic outlook, businesses are urged to tap on government support and press on with restructuring and transformation to maintain their competitiveness, while upskilling local workers to prepare for new and emerging jobs. 

Foo See Yang, Managing Director and Country Head, PERSOLKELLY Singapore, said, “The effects of the pandemic and macro-economic challenges had a dramatic effect on the growth of our economy, and affected many sectors and industries. It is encouraging that this year’s growth outlook remains bright and we hope that this year’s salary guide will be able to provide organisations with refreshed recruitment strategies and approaches to help them attract, retain and develop talents.’ 

The Singapore Salary Guide comes fresh off the back of the launch of PERSOLKELLY’s 2022 APAC Workforce Insights, which highlighted the adoption rates by market and industry, reasons for adoption, skills in demand, the trends, as well as strategies and effectiveness of offshoring. 

Established in 2016, PERSOLKELLY Singapore is one of the largest recruitment companies in Asia Pacific, and has placed over 59,000 positions across the region and works together with 98% of Fortune 100™ companies for their workforce solution needs, which currently comprises permanent placements, temporary staffing, contract and payroll administration, HR advisory and regional talent solutions. 

80% of APAC Employers Find that Offshore Recruiting is Effective in Achieving Business Objectives

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DigitalCFO Newsroom | 1 November 2022

84% of employers across Asia Pacific favour offshoring recruitment strategies.

  • The top 3 sought-after skills when Singapore employers hire offshore talent: IT (52%), Customer Service (35%) and R&D, such as highly skilled scientists or engineers or researchers (35%)
  • The top 3 preferred locations Singapore employers’ source for offshore talent are: Malaysia (69%), India (35%) and China (22%)

PERSOLKELLY, one of Asia Pacific’s leading HR solutions companies, has conducted a business survey among 1,326 decision-makers who are responsible for hiring within their organisation, and the report titled “Hiring and Managing Talent Beyond Geographical Boundaries” highlighted the effectiveness and the growing trend of employers across the region in adopting offshore recruitment strategies for their hiring needs.

Having become more open to adopting new operation models and remote work since COVID-19, companies increasingly turn to offshore recruitment strategies to boost agility and put their operations on the right track. Given the unprecedented economic headwinds, businesses find this solution can be cost-effective. It also opens up opportunities to reach new markets, gives access to a bigger pool of talent with specific skill sets, provides resources to quickly fill gaps in their workforce, and enables the diversification of business operations.

Other Key Findings in Singapore

  • 45% of respondents are either executing or exploring offshore recruitment strategies, with 58% of them saying that this strategy is effective in sourcing good talent, which helped achieve their business objectives and budgets.
  • 66% of respondents voted that the top reason for adopting offshore recruitment strategies is the benefit of being able to access a bigger pool of experienced and skilled talents when local talents are limited.
  • When hiring offshore talent, 62% of Singapore employers would offer contractual employment
  • 70% of the companies surveyed prefer working with regional recruitment agencies, which also have a local presence within the target market. They require support such as advisory on labour law & compliance (79%), payroll & tax submission (68%), as well as recruitment & onboarding of new offshore talent (52%).

“Globalisation and technology have made it possible for employers to hire and manage talent beyond geographical boundaries. As the markets become more competitive, companies need to differentiate themselves to create more value for their customers to either preserve or introduce new competitive advantages. This can only be done through hiring the right talent with the right skill set to achieve the business objective,” said Foo See Yang, Managing Director & Country Head, PERSOLKELLY Singapore.

“That is why offshore recruitment strategy is gaining popularity. The goal is for this strategy is to seamlessly integrate the hiring of offshore talent as part of the organisation’s global setup and to improve the business operations as one team together. The metrics are picking the right people, the right recruitment agency and the right partners,” said Zen Loh, Regional Business Director, PERSOLKELLY. “With these things in place, an offshore team isn’t just a sustainable alternative to local hiring but a secret weapon in the jostle for business success.”

Weathering Today’s Market Volatility Through Technology

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Fatihah Ramzi, DigitalCFO Asia | 27 October 2022

David Brown, President & Chief Commercial Officer of IPC Systems, Inc

The COVID-19 pandemic’s ramifications are still shaking the world economy. Following the closures in 2020 and the supply chain problems in 2021, businesses all around the world are currently experiencing a new wave of disruptions. Investors frequently experience emotional reactions during times of market volatility, reactions that may influence their judgment and even have an impact on their long-term plans. Investor sentiment frequently mirrors the ups and downs of the market. Even if we have little control over market volatility, knowing how technology may assist firms more effectively deal with disruptions can be helpful.

To find out more about this, DigitalCFO Asia spoke with David Brown, President & Chief Commercial Officer of IPC Systems, Inc to find out how businesses can better weather through market volatility. 

Top Business Priorities In A Volatile Market Environment

“In a volatile market, the key thing for any business is to ensure good continuity of their systems and capabilities and on top of that, businesses need to work with the right partners to ensure integrity of operations,” says David Brown, President & Chief Commercial Officer of IPC Systems, Inc.

1. Ensuring Good Continuity

During these trying circumstances for the industry, finance institutions must manage uncertainty. Companies will require a new business model in order to succeed, one that places a strong emphasis on creating value through a greater return on invested capital. Organizations can rely on a tailored business continuity plan to effectively support the business during trying times. These strategies assist businesses in avoiding loss of revenue, lost clients, and reputational harm. Let’s examine what this implies and how to implement a business continuity plan.

Planning for business continuity is essential for your organization to survive a crisis. A system for protecting against and recovering from potential dangers is provided by a business continuity plan. These plans can aid in identifying and defining the risks that may have an impact on the business’s operations and financial results. Having the ability to manage any crisis well may boost customer and staff confidence, help develop a favorable reputation for your business, and, ideally, keep it profitable while navigating adversity.

2. Ensuring Operational Integrity

To verify that businesses are following the proper policies and procedures and that they can recognize and mitigate risks promptly, companies must undergo stringent testing and supervisory processes. This will also ensure that they have enough controls in place for a high level of integrity, security and resilience. 

Companies should protect systems from internal and external dangers, including cyber threats, in addition to rigorous testing and monitoring procedures. Additionally it is also essential that the development of systems and procedures by firms for prompt problem-solving and proactive risk mitigation are in place. The immediate task for businesses in a turbulent market climate is to deal with the problem of information-system integrity, security, and resilience.

Successfully Continuing Business Operations Despite Market Volatility

“In today’s market climate, it is essential that businesses are being fully prepared in terms of infrastructure and assets in any scenario,” says David Brown, President & Chief Commercial Officer of IPC Systems, Inc.

IPC has been in business for over 50 years and in March 2020, they had to mobilize for the first time ever, thousands of employees to work remotely at a global scale, simultaneously. It was a huge undertaking for the company and their customers as they had to change their operations to mostly virtual. 

What IPC noticed is that there were a lot of digital processes that had to go on to ensure their operational integrity especially in the area of security. The company had to ensure that they were able to carry out their day-to-day office operations and liaising with clients on a virtual level. This took a lot of testing, monitoring and implementation in a short amount of time due to the pandemic. They had to ensure that it worked and complied with regulations. 

The ability to manage operational integrity as one component of a larger framework for addressing all main risks throughout the enterprise—including how workers behave—has increased flexibility for businesses in the post-pandemic environment. However, when the pandemic initially started, businesses had an urgent challenge in addressing the problem of information-system integrity, security, and resilience. Businesses must make the most of the flexibility available now to enhance their assets and infrastructure in order to better withstand future disruptions.

Technologies That Help With Current Hybrid Environment

“The key is the ability to have the same experience of the primary location at any secondary or tertiary location,” says David Brown, President & Chief Commercial Officer of IPC Systems, Inc.

Collaboration tools are one such technology that has evolved into a necessity in any hybrid working environment. The term “team collaboration tools” or “team collaboration software” refers to the various software programs and online resources that businesses and their employees can use to follow the development of shared projects regardless of their geographical location.

Cloud storage, document synchronization and file-sharing software, instant messaging, and online whiteboards are just a few examples of team collaboration technologies. Collaboration tools help employees communicate more effectively when they are spread out across multiple places, but they can also be useful when collaborating with outside parties.

An organization will need an application to store and distribute electronic data rather than depending on paper-based files in order to accommodate the remote worker. Teams can swiftly share and transfer files while giving other members access with the use of file-sharing software. These programs eliminate the email transmission procedure, freeing inboxes from the annoying deluge of files and notifications. Any type of file can be shared, including documents, films, and even software.

If your organization has a document management system in place, you can manage who has access to view, modify, and remove files. Existing files and those that continue to require a wet signature, such as those for government agencies, may need to be digitized in order to guarantee that all employees have the same access to the information they need.

The One Thing Businesses Must Do To Remain Operational During Such Trying Times

“The one thing is to ensure that the business can perform and be active in the market. To do so, companies will need to continuously invest in their infrastructure,” says David Brown, President & Chief Commercial Officer of IPC Systems, Inc.

The current epidemic has caused some large, quick behavioral changes that have increased demand for infrastructure services, with communication being increasingly significant for both work and leisure purposes. Although desire for data storage, cloud services, connectivity, and quality (better speed data like 5G) was already on the rise before the epidemic, there has been a surge in attention and changes in demand that may end up being permanent (such as the rapid growth of videoconferencing tools).

The pandemic may lead to increased spending on broadband infrastructure and the rollout of 5G, especially in underserved communities, which would improve future resilience. As a result, the durability of the communication infrastructure, as well as applications and content distribution associated to it, will be of growing significance. This is due to the fact that employment has shifted and the pandemic has caused widespread disruptions.

Companies can only overcome these obstacles if their infrastructure is solid and they have few organizational gaps. The communication between employees, shareholders, and clients would be the most important component of an organization’s infrastructure. Any disruption will not simply paralyze a corporation if companies can maintain effective communication at all levels, regardless of the disruption. With continuous investment in a business’ infrastructure, companies can remain resilient in the current volatile market environment.

APEC 2022 To Reconnect And Empower The Region To New Opportunities

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DigitalCFO Newsroom | 14 October 2022

Opening the region to opportunities, connecting across all dimensions, and helping achieve balance in all aspects.

Thailand has been given the immense honor of hosting the Asia-Pacific Economic Cooperation, or APEC, in November 2022. The role comes with major opportunities and equally significant duties for Thailand due to APEC’s long-standing importance as well as the unique context of the year.

APEC was established in 1989 with Thailand as a co-founding member. The important forum for economic cooperation has since come to comprise 21 leading economies in the Asia-Pacific region.

Throughout the decades, APEC’s core value has remained promoting regional economic integration. At present, APEC is home to over 2.8 billion people with a combined GDP of more than 53 trillion US dollars, more than half of the world’s GDP and global trade.

Hosting the meeting in the first year following alleviation of the COVID-19 pandemic, Thailand’s theme for APEC in 2022, “Open. Connect. Balance.” indicates the key deliverables it envisions namely; opening the region to opportunities, connecting across all dimensions, and helping achieve balance in all aspects.

The 21 economies of APEC, utilize the meeting annually to discuss avenues for facilitating trade and economic progress in a range of dimensions, stand to especially benefit this year due to their need to reconnect, uncover new opportunities for growth and build resilience against emerging challenges.

Initiatives spearheaded by Thailand in accordance with these objectives include; refreshing the dialogue on the Free Trade Area of the Asia-Pacific (FTAAP) through a post-COVID-19 lens, forming the Safe Passage Taskforce to coordinate safe and seamless resumption of cross-border travel and securing endorsement for the Bangkok Goals on the Bio-Circular-Green (BCG) Economy as a leader-level document committing APEC to environmentally-conscious economics.

Furthermore, Thailand has devoted attention during its year as host to supporting digital technology and innovation to develop human capacity, promoting access to funding for Micro, Small, and Medium sized Enterprises (MSMEs), empowering women through more inclusive economic participation, and supporting sustainable tourism.

From the doldrums brought on by COVID-19, APEC poises itself in 2022 to not only revitalize its economies, but to emerge stronger and better equipped to achieve long-term prosperity. Thailand, in the host role, will be able to showcase its capabilities as one of the founding members of the forum.

The APEC Economic Leaders’ Week will run from 14 to 19 November 2022, while the APEC Economic Leaders’ Meeting will take place on 18 – 19 November in Bangkok. Prior to the main meeting, there will be a series of gatherings, including the final APEC Senior Officials’ Meeting, as well as the APEC Ministerial Meeting, which is attended by trade ministers and foreign affairs ministers.

“Future of Time” Study: Continued Uncertainty Motivates Businesses to Increase Digitization, Collaboration

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DigitalCFO Newsroom | 30 September 2022

With constant uncertainty around global events, employees globally want a purpose-driven culture in their organization.

Global events such as COVID-19, economic instability, and sustainability concerns have emerged as top concerns over the past few years. This has bred uncertainty in the workforce, impacting productivity, collaboration, and innovation, according to Adobe’s latest report. 

The second annual Adobe Future of Time study revealed these key findings:

  • Leaders and employees are seeking purpose-driven organizational cultures more than before, and workers who are actively sharing their work cultures are more likely to be satisfied

With constant uncertainty around global events, employees globally want a purpose-driven culture in their organization. Otherwise, they are more likely to pursue a new job that better aligns with their values. This global finding corroborates with PwC’s Global Workforce Hope and Fears Survey, which found that Singaporean workers want to see how they will be making a difference by working for an organization whose purpose aligns with their own personal values.

  • Digital solutions are facilitating and improving work relationships, including wellbeing check-ins, feedback sessions, and collaboration

Digital platforms support managers in facilitating wellbeing check-ins, allowing for easier feedback between employees and leaders, and fostering collaboration between employees. The previous Future of Time report found that hybrid/remote workplaces are leading to a disconnect between employees and managers – thus bridging the gap requires digital solutions that cultivate and encourage conversations, discussions, and get-togethers, whenever necessary.

  • Workers now rely on digital tools to keep productive and achieve peace of mind during particularly uncertain times

Nearly 7 in 10 managers and employees globally rely on digital tools to stay productive when they have trouble focusing or to ease the stress of getting additional work done as a result of a coworker needing to take time unexpectedly. This also holds true for most leaders and managers as they need more tools and resources to support employees through uncertain times, including mental health resources and wellbeing check-ins.

In 2021, NTUC Learning Hub found that more than half (54 percent) of Singaporean employees were not satisfied with their company’s current mental wellness initiatives. While digitization and the use of digital tools have been implemented quickly in workplaces to adapt to hybrid workplace environments, there is more to be done to reinforce the connection between managers and employees.

For more information, you can download the full global Future of Time: Redefining Productivity During Uncertainty report here. 

EC Holdings Launches Global Investment Migration Services

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DigitalCFO Newsroom | 1 September 2022

Hon. Philippe A. May is appointed CEO to spearhead operations.

Global investment migration firm, EC Holdings, commences operations with the launch of its Singapore Headquarters and the appointment of the Hon. Philippe A. May as Chief Executive Officer. Recognising the value of acquiring alternative residence and citizenship-by-investment (CBI) migration in the 21st century, the highly experienced leadership team offer advice and expertise, enabling greater flexibility, security and access to the world’s major economies.

Channelling over a decade of experience in Estate and Investment Immigration Planning, Private Banking,
Insurance, and Diplomacy, EC Holdings Co-Founder, the Hon. Philippe A. May, has been appointed CEO.
Most recently the Managing Director of Arton Capital (Singapore) Pte Ltd, Philippe is a qualified Associate Financial Planner (AFPTM), an Associate Estate Planning Practitioner (AEPP®) and a member of the Financial Planner Association of Singapore (FPAS).

“As a Singaporean, I am immensely proud to lead the first global investment immigration company
headquartered here. HNWIs are paying more attention to their residence and citizenship portfolio. Our
team of experienced, licensed partners are able to offer the best solutions across 5 continents. We have
our own offices on site in most of our investment immigration destinations, so clients can rest assured
that they are in the best hands,” said the Hon. Philippe A. May, Co-Founder and Chief Executive Officer
of EC Holdings.

Co-Founder and Chairman, Kevin A. D. Hosam, and Co-Founder, Martin St. Hilaire, complete the EC
Holdings Founding team. Collectively, the threesome boast more than a quarter of a century of experience in investment migration; thus, EC Holdings are able to seamlessly navigate complex and ever-changing systems and legalities to present best-in-class solutions based on the requirements, family size, and education credentials of each individual client.

“I have been in the CBI industry since Antigua and Barbuda started its citizenship program. Now, I am
looking forward to extending the outreach of our citizenship program through our network of senior RCBI

professionals under the roof of one new global company – EC Holdings,” said Kevin A. D. Hosam, Co-
Founder and Chairman of EC Holdings.

Aside from the senior leadership team, EC Holdings has partnered strategically with specialist agents in
key operational markets(Bahamas, Latvia, Nigeria, St. Kitts and Nevis, St. Lucia and Türkiye) bringing them on as equity partners. With ample local knowledge and insights, these partners strengthen the hands-on approach employed by EC Holdings

“Amongst the unique solutions of EC Holdings are services in Vanuatu, Bahamas, Uruguay, Latvia and
Paraguay, which no global investor immigration firm offers so far. I have lived in Vanuatu for the past 20
years and am a citizen myself, so I am looking forward to enabling more clients to reap the benefits of
Vanuatu Citizenship,” said Martin St. Hilaire, Co-Founder of EC Holdings.

Fuelled by increased global uncertainty and the restrictions thrust upon freedom during the COVID-19
pandemic, EC Holdings identified an uptick in the number of clients desiring alternative citizenship and
residency options. Increased global mobility is a strong pull factor for clients seeking escape from political or economic threat, new business opportunities, and the option to swiftly move to a new jurisdiction.

Access to improved healthcare, education services and a more comfortable way of life are further reasons for seeking migration through investment, whilst reduction of tax burdens and fiscal and family planning are other key factors.

As the first and only global investor migration firm with solutions in the Bahamas, Latin America, Latvia
and Vanuatu along with the more familiar countries such as Saint Lucia and Portugal, EC Holdings offer two kinds of programs; citizenship-by-investment and residency-by-investment. Citizenship-by-
investment programs offer clients the privilege of acquiring a second citizenship and the right to travel freely to various destinations and settle in another county. EC Holdings meticulously and constantly
review investment migration legislation from over 100 countries globally and select the most beneficial
and successful investment citizenship programs for clients. Meanwhile, residency-by-investment
programs enable opportunities to move, live, work, study, and receive health care in a new country of
residence. EC Holdings offers expert advice on residency-by-investment programs in some of the best
places in the world in terms of business environment, quality of life and opportunity.

Veritas Warns Firms Face Hefty Bills Following Post-Covid Data Storage Surge

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DigitalCFO Newsroom | 31 August 2022

Veritas Technologies is warning that businesses are facing  a cost crisis for collaborative working tools as post-COVID working practices begin to catch up with  them. 

  • Covid and the rise of remote working has led to ballooning levels of Microsoft SharePoint and Teams data
  • Lack of in-built options to archive data causing users to reach their storage limits
  • Businesses need to act now to avoid potentially paying over 20 times more than they need  to  

Veritas Technologies, a leader in multi-cloud data management, is warning that businesses are facing  a cost crisis for collaborative working tools as post-COVID working practices begin to catch up with  them. 

The use of cloud collaboration services, such as Microsoft SharePoint (the storage and sharing  platform used by Office 365 and Microsoft Teams), rapidly accelerated at the start of the pandemic.  But, with very few providers of collaboration tools offering options to archive files, many businesses  are finding that their data volumes and cost overruns are now ballooning out of control. If left  unaddressed, those businesses will find themselves paying the high price of ‘storage overages’ for  data that they’re no longer using and should have archived. 

As businesses in Singapore grapple with rising inflation, supply chain issues, labour shortages and  cyber threats, a sudden step up in cloud storage costs is the last thing they need. Businesses can get  ahead of the issue by adopting third-party solutions to automatically archive legacy data from cloud  services, but few are aware of this. 

Andy Ng, Vice President and Managing Director for Asia South and Pacific Region at Veritas, explains:  “At the start of the pandemic many companies embraced cloud collaboration tools to empower  employees with mobility solutions and minimise work disruptions. As a result, by the end of 2020, the  number of SharePoint accounts shot up to over 200 million. However, with many cloud collaboration  tools, including SharePoint, lacking a native archive function, much of the data created since the  advent of the pandemic is all stacking up in ‘hot’ storage. This means that some companies are paying  to keep every Teams chat from every employee from two years ago on the most expensive tier of  storage.” 

Hot storage refers to storage media that offers fast and easy access to data, typically based on  premium hardware with highly optimised connectivity. Its counterpart, cold storage, often uses tape  or other cheaper media which allow data to be stored for compliance purposes, where it is typically  kept offline and rarely accessed. 

Ng continues: “Collaboration solutions, like SharePoint and Teams, have helped businesses to weather  the COVID storm and accelerate the shift to the new hybrid working model. No one wants to see costs  getting in the way of businesses for the ongoing use of these collaboration tools. Hence, it makes  sense to keep them affordable and practical by bringing in third-party archiving to move unused data  to cold storage, whilst keeping it searchable and accessible to the business.” 

Cloud data management tools, like Veritas’ NetBackup SaaS Protection, can simply move archive ready data to more cost-effective storage tiers, often on the same cloud platform that businesses are  already using for their hot data, and without compromising data privacy and sovereignty  requirements.

Ng said, “We estimate that storage could be as much as 22 times cheaper for businesses that move  from paying for extra capacity in SharePoint, to archiving their data to more affordable storage tiers*.” 

*Based on a typical price of $153 per TB per month for SharePoint overages compared to the quoted  cost of $676 for 100TB of Azure Storage 3-year Reserved Capacity in a cool tier. 

GCash Readiness To Keep Up With Surge Of Philippine Digital Economy Thanks To AWS Partnership

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DigitalCFO Newsroom | 30 August 2022

The unprecedented growth of the digital economy during the COVID-19 pandemic was a phenomenon that GCash, the Philippines’ no.1 mobile wallet app, has been ready for.

The unprecedented growth of the digital economy during the COVID-19 pandemic was a phenomenon that GCash, the Philippines’ no.1 mobile wallet app, has been ready for. Thanks to its collaboration with Amazon Web Services (AWS), the e-wallet app was able to further strengthen the skills and expertise of its consultants, engineers, architects, and developers to keep up with the surge of digital transformation in the country.

During the AWS Summit ASEAN, an event attended by technology and business decision-makers to gain knowledge on cloud technology, GCash president and CEO Martha Sazon shared, “as the pandemic hastened the adoption of digital services, it led to the boom of the internet economy. Anticipating the shift to online, we made sure that GCash was ready for the surge and prepared to be a lifeline of Filipinos and Filipino businesses.”

The partnership with AWS has facilitated more effective digital business solutions and innovative digital financial services by streamlining its business process, which is crucial in the digitally-driven world. GCash was able to leverage on AWS’ well-built framework to minimize expenditures and save approximately USD3.8 million in cloud-related expenses in 2021.

Using advanced robotic processes automation on AWS, GCash was able to swiftly automate its finance processes, enjoying approximately 85 percent improvement in processing time for recount, refunding and resettlement, saving the company more than 2,600 man hours per month.

Sazon emphasized that benefits from using cloud technology has helped GCash further develop its platform to empower Filipinos with the introduction of innovative and accessible financial solutions like GGives, a “buy now, pay later” product, and GCashPera Outlet (PO), its digital solution for micro, small and medium enterprises (MSMEs).

In a separate interview conducted by Foo Boon Ping, the managing editor of the Asian Banker, a leading provider of strategic intelligence and builder of platforms in the financial services industry, Sazon also shared, “we constantly innovate to give Filipinos, especially the unbanked access to financial services and uplift their lives. Through AWS, we empowered millions of Filipinos when the world closed down. We will continue working with AWS as the world slowly continues to open up, and we will continue to provide opportunities to make every Filipino’s life better.”

AWS ASEAN managing director Conor McNamara also shared his insight on working with GCash.

“When you’re moving as quickly as Mynt is, you want to make sure that you’re able to scale quickly and support its fast-growing customer base, and they also have a very aggressive product innovation roadmap. We’re very focused as well on the training and improving the productivity of developers and making sure that we provide access to our local, regional, and global team so that AWS and Mynt can be as productive as possible in terms of launching new products, access to on-demand cloud infrastructure, and cutting edge services,” McNamara said.

With its vision of financial inclusion for all, GCash now has more than 66 million users in the Philippines who trust the app for their essential transactions, which include sending money, buying prepaid load, paying bills, and bank transfer. Aside from these, the e-wallet app also offers a full suite of financial products such as GSave, an online savings bank; GInvest, an easy investment feature; GCredit, a personal credit line with up to P30,000 credit line and up to 3% prorated interest rate, and GLife, the e-commerce feature on the GCash app that allows users to shop exclusive deals from brands across retail, food, gaming, entertainment, and transport.

Impact Of The Pandemic On Cross-border Payments

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Fatihah Ramzi, DigitalCFO Asia | 17 August 2022

Ho Chee Wai, Head of Neo Financial Services, Instarem

The previous two years have been disastrous for the world’s economy and health in equal measure. Small enterprises have been particularly heavily damaged. Nevertheless, despite the crisis, there have been some bright spots, one of which has been the continued operation of the global payments system. During the COVID-19 outbreak, cross-border payments gave struggling companies a lifeline and helped to alleviate the pandemic’s financial impact on business owners around the globe. The expansion dreams of small business owners must be completely realized, but these payment systems still need to be made faster, less expensive, and more secure.

The pandemic’s unparalleled disruption has reconfigured the world economy, and many small enterprises are now eagerly pursuing fresh cross-border opportunities. IThe cross-border payments network, which serves as the vital plumbing for international trade, must function even better than it does now if this optimistic sentiment and its expanding ecosystem are to continue to thrive.

To find out more about how the pandemic has affected cross-border payments, DigitalCFO Asia spoke with Ho Chee Wai, Head of Neo Financial Services, Instarem to gain further insights on the topic.

Change Of Cross-Border Payment Over The Years, Especially During Pandemic

With many firms embracing cross-border payments and feeling secure in online solutions, citing security, timeliness, and receipt verification as significant benefits, websites and applications are now far more popular than in-person transfer methods.

“During the pandemic, the way people did business, the way they spent, changed. Everything needed to be done digitally. There was no other option. Sending and spending money became mobile, contactless and digital,” says Ho Chee Wai, Head of Neo Financial Services, Instarem.

The pace at which this shifted has been greater than any time before. Instarem saw a 35% increase in global transfers between 2019 and 2020. This has sustained into 2022. Additionally, the Covid-19 pandemic has only increased the pressure to improve the cross-border payment ecosystem. 

Although there are still challenges to be overcome, the efficient operation of cross-border payments will play a crucial role in stimulating economic growth after the Covid-19 pandemic. Currently, sending money abroad might be a laborious process. Setting up the ability to reach overseas end destinations is difficult, and actually processing the payments can be time-consuming and expensive. For people and companies of all sizes, this is causing a lot of friction.

Currently, it is essential that the low value cross border system is streamlined to safeguard and support individuals, small enterprises, and the financial ecosystem that supports them. This is because cross-border payments for remittances and e-commerce are increasing.

Expectations Of Cross-border Payments In The Post-pandemic World

The post-pandemic world has accelerated digital payments, but it has also seen a global supply chain disruption. 

“More and more businesses are looking to international sources to help solve supply chain issues,” says Ho Chee Wai, Head of Neo Financial Services, Instarem.

Following the pandemic, cross-border payments have increased, with corporations using them far more frequently than people. However, this has also raised expectations that cross-border payments will deliver dependable, predictable, secure, and rapid transactions. The difficulties brought on by high liquidity costs, compliance risk, and a lack of standardization, however, can stifle it. For this reason, it is necessary for businesses and banks to overcome these obstacles in order to guarantee a high level of successful cross-border payments.

More and more people are turning to technology to solve these problems. With the aid of advanced digital infrastructures there are systems known as “rails” which enable payments from a company’s or person’s account to another account. For financial institutions, the multi-rail approach provides direct connections, lowers friction, and improves efficiencies—efficiencies that may be passed straight on to customers and businesses.

Mitigating Challenges Of Cross-border Payments [High Costs, Low Speed, Limited Access, And Insufficient Transparency]

Customers have traditionally been charged with ridiculous high fees when making international payments. This was Instarem founder, Prajit Nanu’s main reason for creating Instarem. He believed in simplifying cross-border payments so that customers can expect to make transfers in real-time, and are able to do this anywhere, anytime and get great rates while they are at it. The benefits of real-time payment infrastructure and interoperability have allowed for cost-effective and fast transfers that were traditionally impossible. 

That said, there are elements of cross-border services that need refining. Concerns remain about fraud, with small businesses being worried about becoming a victim. Some highlighted poor foreign exchange rates and high transfer fees as another cause for concern, with calls for more transparency. Others also said a top concern was around the lack of transparency on how much a cross-border money transfer will cost, being unsure how much money will actually arrive with the recipient.

Last year, the G20 made enhancing cross-border payments a priority, targeting four key challenge areas – transparency, cost, speed and access. On transparency, payment service providers will be targeted to provide a minimum level of information to payers and payees (by 2027), including the transaction amount and time to deliver the funds.

There’s also still a lack of universal connectivity and the ability to send funds instantly across borders, though this is beginning to change through technology such as Mastercard Cross-Border Services, which allows businesses and individuals to send and receive money securely and with the certainty they crave from a single, secure point of access. 

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