DCFO Spotlight

Reasons To Consider Business Process Outsourcing For Your Company

18 January 2023

Today’s business process outsourcing companies are not just call centers; they are tech-driven customer service organizations.

Business process outsourcing is the practice of employing a third party to carry out tasks that are necessary for the operation of your organization. In essence, a corporation would employ a third-party organization to carry out critical but secondary business responsibilities. To handle payroll or the company’s finances, for instance, an advertising agency might contract with a financial firm. These outside services can assist a company in increasing efficiency and, as a result, success.

Companies frequently outsource their work when they believe a more qualified organization could do it more efficiently. The majority of the time, businesses find outsourcing to be more creative and effective than setting up a new department inside the organization to manage business activities.

Businesses big and small around the world will eventually be interested in BPO. All kinds of firms in a wide range of industries outsource various activities, from small startups to significant Fortune 500 companies, and the market is only expanding. Companies will seek out any advantage they can obtain when new, cutting-edge services are offered to help them outpace the competition. A guaranteed strategy to improve your firm’s functionality and grow your organization is to use a BPO business model.

The use of business process outsourcing (BPO) in the financial sector reduces operational inefficiencies and eliminates the need to work with multiple third-party service providers to manage business processes such as accounting, finance, HR, customer interaction, cross-selling, upselling, etc. The main business value proposition that BPOs provide is increased operational effectiveness and cost savings.

Financial organizations will outsource BPOs for their crucial but non-core tasks. Today’s business process outsourcing companies are not just call centers; they are also tech-driven customer service organizations. They are thought to be the industry that is currently most technologically advanced. BPOs help to expedite customer service and address a wide range of difficulties faced by them by leveraging the power of artificial intelligence, augmented reality, chatbots, and other technologies.

Through social media and online customer reviews, BPOs assist to elevate customer experiences. Additionally, outsourcing has allowed them to shorten their Time to Market, allowing them to release their products quickly. One of the main advantages of financial institutions working with BPOs is that they give financial brands the chance to increase revenues by creating effective cross-sell chances during client contacts. Additionally, business process outsourcing companies assist organizations in getting access to client feedback. This makes it simpler for the industry’s key players to comprehend the problems and adjust their business practices accordingly.

Additionally, BPOs provide back-office efficiency, which is crucial for boosting profitability in the financial sector. They combine finance and accounting services in an innovative way to achieve superior operational delivery. BPO service providers deliver exceptional operational inventiveness as well as smooth operation. To offer their clients the greatest solutions, they work with subject-matter experts that have practical knowledge in the industry. Therefore, BPO companies serve as a committed partner for innovation and transformation in the finance sector. Associating with business process outsourcing companies is increasingly seen as an investment for the progressive future rather than an alternative or a luxury because, on the whole, they help enhance customer experience and customer acquisition.

The constantly changing market necessitates ongoing innovation, which improves customer services. BPOs have access to software solutions that can fundamentally reorganize and redefine the organizations because they are tech-enabled businesses. Businesses that specialize in business process outsourcing are assisting the financial sector in making the switch from a transactional to a strategic model. BPO companies have been a huge aid to the industry by providing support for IT, knowledge processes, accounting, remote operations, payroll, purchasing, cross-selling, and upselling, among other things.  They not only aid in time and financial savings but also lessen duplication and operational inefficiencies. Business Process Outsourcing companies are thus becoming a crucial component of the financial sector with the usage of their cutting-edge technologies and experience.

Here are some other benefits of BPOs for companies to consider;

1. Cost-Saving Accounting Services

In general, businesses view outsourcing as an extra expense that is therefore unneeded for their operations. It is definitely not the correct impression. In actuality, the reverse is true. Companies  who are outsourcing accounting are eager to cut costs while, most importantly, maintaining quality. Given that most businesses can offer their services at cheaper pricing, outsourcing frequently results in significant savings typically due to lower labour costs at their location. In addition, outsourcing allows businesses to avoid paying for full-time or part-time employees’ salaries, taxes, office supplies, and benefits. Businesses will  just invest in what they require. 

2. Eliminate Time and Costs of Hiring Processes

If business leaders look at the bigger picture, they will see how difficult the hiring process is. Resources are needed to handle it, from developing a recruitment strategy to choosing candidates for interviews. The hiring procedure requires time and money from the company, and  they will need to set aside this time for the employee. Many businesses fail to account for the time they spend trying to find a qualified accountant. Additionally, expenses and time correlate equally. The savings made from outsourcing corporate processes on time and expenses should be taken into consideration.

3. Better Allocation Of Time

Finance leaders will discover that as the company expands, they will spend less time scaling the company and more time managing finances. So outsourcing administrative work, such as bookkeeping and accounting, will allow finance leaders to concentrate their time, effort, and resources on formulating business plans. Along with networking and customer relationship building, it will increase revenue.

4. Expert Accountants and Bookkeepers

You may be able to find a specialist with greater experience through outsourcing at a reasonable cost. Companies that provide outsourced bookkeeping and accounting services must continually raise their bar in terms of education and experience if they want to maintain market dominance. Imagine having 50 employees share one office. They can easily communicate new accounting techniques, approaches, and technologies. Additionally, excellent accounting firms have continuous participation and more broad access to training and courses.

Additionally, hiring an accounting firm as an outsourcing partner gives the organization access to their staff of accountants. By carefully selecting the outsourcing company, organizations can be assured that the accounting is in the hands of a reputable and experienced business.

5. Scaling Accounting Easily

The accounting service providers has the amount of availability to scale your services significantly without any lag. For example, if your bookkeeping and accounting tasks exceed the number of functions for 1 employee, you can easily be enforced with the extra workforce. Without the need to go through a rigorous recruitment process. Moreover, accounting and bookkeeping service providers are charging on an hourly basis. It means you can scale up or scale down the hours without any interruption.

Organizational Agility: The Key To Predicting & Responding To Changing Market Trends

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13 January 2023

Many FP&A businesses today are faced with severe risks because they continue to operate in the old-fashioned manner and are not equipped to fulfill the functions that the leadership requires of them.

Today’s business executives must be very operationally agile in order to anticipate and react to shifting market conditions as well as possible threats and opportunities. Business agility has become a crucial component of success for many, and they want the same of their support and advisory roles. Recent global developments have made it very evident that businesses must be able to quickly analyze new scenarios, change course, and adapt to new circumstances. The CFO’s function as a strategic advisor and keeper of value and long-term performance is crucial in these times of transition. Many Financial Planning & Analysis (FP&A) firms, however, are not (yet) capable of handling the job.

Business leaders need assistance from FP&A as they help to modify a business’ behavior and procedures to flourish in the “new normal”. Together, they can navigate through dynamic and occasionally uncharted waters by spotting potential risks and fresh possibilities early enough to still have time to respond wisely.

The Missing Link

A controlling department’s primary tasks should no longer be historical data analysis, financial report creation, annual planning, and forecasting. In order to uncover hidden value and identify potential dangers, FP&A is required to act as advisors in strategic decision-making by combining data from all areas of the firm.

To meet this expectation, FP&A units are embracing new technology, relocating to the cloud, automating procedures and reporting, or enhancing existing datasets—but these efforts are insufficient to change the role FP&A plays in the value generation and steering process. Instead, in order to optimize their investments in new technology and data, FP&A must completely redesign how they cooperate, manage, empower, and distribute insights. The adoption of business agility is the crucial component needed to connect digitization and business effect for FP&A.

Agility Adds Value

Businesses that deliver quickly and responsibly, innovate and disrupt, and continuously adjust their organizational structures and modes of cooperation are said to be agile in business. The military is one of the most cutting-edge industries for organizational agility. Despite their organizational scale and complexity, armed forces must mobilize resources quickly and effectively to counter ever-evolving physical and digital threats. A traditional chain-of-command culture and a standardized, process-driven strategy are ineffective in this situation. Instead, military officials support the idea of “agile and adaptable leadership,” in which trained soldiers make decisions on the spot to carry out the leadership’s mission.

CFOs and FP&A leaders can learn from the military’s approach to meet business leaders’ expectations for proactive, in-time, and cross-functional decision support despite how far distant it may appear from the day-to-day struggles of a financial controller. Additionally, implementing agility demands teams and leaders to embark on a transition journey, just like in the military. It will need dedication, patience, and guts to experiment with new approaches while continually learning how to work in an agile environment.

Achieving Agility In FP&A

The FP&A organization needs to concentrate on gaining skills in four crucial areas, with agile leadership and digital enablement as its cornerstones.

Business Partnership

Create relationships with company stakeholders that are strategic and value-driven in order to find opportunities, evaluate results, and make investment decisions. Many  CFOs are concerned that the finance function is reactive or that data and information sharing methods are not streamlined. CFOs also anticipate that they will still be concerned about these issues in 2023.

Business partners now have insights at their fingertips thanks to technology, and FP&A teams can model more, explore more possibilities, and evaluate potential effects in real time thanks to data and planning tools. Today, FP&A and the company can collaborate digitally or in person to make model changes in real time, see the anticipated results, and then recalibrate to make more accurate judgments. Utilizing an organization’s tribal knowledge from leadership to the front lines for integrated insights is essential today more than ever to achieve agility and respond without being reactionary.

Being A Learning Organization

Many FP&A companies would accurately describe themselves as learning companies. The capacity to switch from a focus on outputs to a focus on outcomes, however, is essential for continuing success as a trusted business advisor. This process is regularly assessing the results of ongoing investments and activities to decide whether to move forward as is, make adjustments, or take a different turn.

Due to the rapid change in the business environment, everyone inside the organization must develop their talents collectively. For instance, in order to advocate the best course of action, businessmen must have a better understanding of the benefits and limitations of technology, and IT professionals must comprehend business processes and desired results. Although it might seem obvious, this calls for an experimental mindset.

Modern Management

An agile FP&A team works with the front line and runs like a “small business” with a focus on a particular result. It determines the talents required (perhaps even a combination of internal and external personnel), gives the team autonomy over choices, secures internal finance, and outlines what it will undertake to accomplish the goal.

For instance, if a company wishes to enhance planning, it may allow teams to work freely within a set of concrete, quantifiable, and strategic objectives. An enormous, international firm that did this by using an inefficient, expensive, and time-consuming annual planning procedure. The organization decreased the time and effort spent on planning from a “all year round” process to a few weeks by radically rethinking the planning methodology, implementing the most recent planning technology, and experimenting with agile approaches (such as sprints).

Collaboration

The FP&A team must work together and draw on knowledge from several departments inside the company. A successful team is self-organized around a goal, given the freedom to decide, and laser-focused on value while using the least amount of effort possible. Collaboration teams assemble the ideal individuals for a predetermined period of time with the sole purpose of completing the task at hand—no long-term commitments. An agile team can quickly disassemble after resolving the business issue or producing the desired outcomes and move to the next location. In a hurried timeframe, FP&A and other business associates can collaborate as a cross-functional team.

Many FP&A businesses today are faced with severe risks because they continue to operate in the old-fashioned manner and are not equipped to fulfill the functions that the leadership requires of them. To direct the company strategically and adapt to shifting market conditions, business leaders constantly strive for quick, proactive, and analytics-driven decision assistance on their side. The introduction of technology by itself hasn’t been sufficient for FP&A to evolve into this position of an “intelligent business partner.”

The availability of data, performance transparency, and automation made possible by new technology are positive developments, but they do not, by themselves, enable teams to rethink how they work, cooperate to generate cross-functional insights, or partner for results. Incorporating agile principles into daily activities and introducing new working methods made possible by new tools and technologies will elevate FP&A’s position and multiply its influence in providing genuine value for the company. The CFO is in a crucial position to drive this FP&A transformation by challenging the established quo, encouraging employees to think creatively, eschewing conventional methods, and adopting an agile attitude.

Expense Management 2023 Industry Trend

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12 January 2023

In 2022, countries started to open up again, and there was an undeniable upsurge in the number of people claiming expenditures. But what expense management trends can businesses expect in 2023?

In comparison to 2020, the corporate world is drastically different now. The way businesses operate, how their employees are paid, and how they use corporate funds have all altered during the past several years. While there has been a fast transition from traditional on-site job profiles to hybrid and remote work settings, there has also been a significant change in how businesses manage company spending.

In 2022, countries started to open up again, and there was an undeniable upsurge in the number of people claiming expenditures. But what expense management trends can businesses expect in 2023? The following are some areas that businesses might want to consider:

Driving Further Efficiency In Finance Departments

The efficiency of financial departments should be a priority for businesses, which are growing overall. Technology is being used widely and quickly to advance this development. When things change quickly, those who can adapt and those who dare to think unconventionally and are willing to question accepted solutions are the ones that succeed in the future.

For many businesses, calculating expenses is a laborious procedure that could be readily automated. Businesses should invest in software that makes it simple to submit expense claims, approve reimbursement requests, and generate reports. The organization will save time and money by using an app-based solution that enables on-the-spot expense claims and technologies for receipt analysis.

When purchasing tickets or hotels, make sure the solution can connect to the company credit cards directly to the cost management platform. The transactions are delivered straight to the app in this manner. The firm payroll system should be integrated with the cost management software to further streamline the process. Both the payroll staff and those using the expense solution will benefit from a significant time savings as a result. Everyone in the firm will benefit from it, creating a win-win situation.

Make The Move To Completely Digitize The Expense Management Process

The concept of totally digitalizing the expenditure management process has been around for a while, but have all businesses actually made the transition? The significance of having effective spending management is increased by working remotely and being continuously on the road. The management and reporting of expenses, mileage reimbursement, allowances, and benefits must be quick and easy for employees. Additionally, supervisors must have a reliable method for monitoring and approving staff costs. Therefore, in 2023, businesses should put a lot of effort into streamlining the entire expenditure management process, from the point at which an employee makes a purchase to the point at which it is paid and recorded.

Using an expense management solution with interfaces to various bank cards, automatic validation, and the capability to send reports to a number of the company’s systems is one approach to accomplish this. These are tasks that free up time for workers and reduce the likelihood of accounting errors, which frees up time for managers and guarantees accurate bookkeeping and salary payments.

Employees No Longer Need Expert Knowledge In Certain Areas

The shift is obvious when discussing administration in general: it is no longer solely administered by experts. Every employee makes use of both HR and finance software. The importance of systems having automated processes with their own intelligence (AI) and becoming faster and more secure is increasing. Employees do need to possess expert knowledge, but the system takes care of that for them. Instead of performing manual inspections, experts will be able to act on automatic warnings and devote their time to other value-adding activities.

Many financial professionals are hopeful that by 2023, the entire process will be moving rapidly rather than just the administration. Employees should be able to directly enter purchases made for the workplace, such as coffee, as a cost in their expense tool rather than having to wait until their next paycheck to be paid out and see a loss in their bank account. Future solutions must be intuitive, with a heavy emphasis on usability and built-in help, since most users won’t be system specialists who utilize them on a daily basis. Additionally, they must be simple to use, which entails being connected to other commonplace tools as well as functioning effectively on smartphones. 

The user now determines the requirements, according to finance leaders. When businesses choose to outsource their investment in digital systems in the past, the main goals were gathering and simplifying. Usability is now becoming more and more in demand. Because expenses are frequently entered while in motion and can be calculated automatically with the help of AI, the system must be adjusted to the user’s current demands. Because it is simple to accomplish, the user shouldn’t need to be aware of complicated VAT regulations or how allowances should be recorded.

The Need For Processes That Facilitate Both Users And Admins

After the pandemic, remote work has resumed, and travel and representation have also resumed. Because of this, businesses require sound procedures that support the needs of users and administrators who work from home offices and do not have the same possibilities to scan receipts or give those receipts to the finance department.

Budgets become more constrained by inflation and rising prices, thus you need tools to regulate certification flows and approval procedures. Businesses require tried-and-true cloud-based technologies that give them cost management and boost user productivity. More businesses will digitise their expense management procedures in 2023.

This is due to the pressure that an unpredictable financial environment imposes on businesses. Businesses will increasingly adopt process-optimizing technology, such as expense management solutions, as they can no longer tolerate slow procedures with significant alternative costs, such as lost time.

Customers increasingly want the ability to select and connect their favorite systems and apps because expectations for technology are always shifting. The expense management industry will start to see the effects of this transition in 2023. Banks, financial systems, expenditure management solutions, and customers all want to use their preferred payment method.

With a spreadsheet, managing little spending can be just about possible. However, an integrated expense app is the only sensible solution as the number of charges climbs into the tens, hundreds, and thousands. All employees’ demands must be met by effective expense management programs, which should also give finance teams control and be compatible with existing banks and systems.

All in all, these are the anticipated 2023 financial industry trends for expense management. It is clear from the key topics mentioned above, that businesses are rethinking their conventional finance operations and looking for solutions to streamline spend management. Businesses are now examining their financial stack and requesting better solutions that interface with their system rather than depending on what has historically been provided. From this, it is clear that business owners want to take back control of their corporate expense management software.

Addressing The Critical Skill Gaps In Indonesia

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10 January 2023

Digital literacy is essential for in the 21st century and although many ASEAN countries are nearing the peak of digital transformation, Indonesia is still lagging behind due to critical skill gaps in their workforce.

Lack of skills and inadequate infrastructure have been named as the primary causes of Indonesia’s lower labor productivity compared to other ASEAN nations. It was highlighted that Indonesia is known for having an excess of semi-skilled employees, and that the country’s education and training systems were failing to give students and job searchers the necessary skills to carry out the tasks that were available.

Digital literacy is clearly essential for Indonesia’s development in the twenty-first century. The nation’s yearly GDP growth rates have mostly stuck at 5% over the previous five years, despite having many of the characteristics thought to be favorable to rapid economic growth, such as a strong natural resource base, a young population, and an expanding services sector.

In recent years, Indonesia has started initiatives to accelerate digital skills among workers. On that note, let us take a look at the overall skilling rates of the country and the initiatives carried out by the government to upskill their workers digitally. 

At Current Skilling Rates, Digitally Skilled Workers Will Contribute US$134.5 Billion To The Country’s GDP In 2030

The economic contribution of Indonesian workers with digital skills is expected to increase based on current trends in the country’s adoption of technology. Workers in the technology industry and digital workers in non-technology sectors are anticipated to be the main drivers of this increase. Between 2019 and 2030, it is predicted that both types of workers will contribute more to the GDP. The corresponding GDP contributions of non-digital workers with digital skills in non-technology sectors, on the other hand, are predicted to increase by a relatively smaller but still sizable amount.

There are three key drivers behind these trends:

  1. Over the past five years, Indonesia’s technology sector has grown rapidly, and this trend is anticipated to continue. According to a recent study, Indonesia has the largest and fastest-growing Internet economy in Southeast Asia, with its Gross Merchandise Value (GMV) quadrupling between 2015 and 2019 at an average growth rate of 49% annually. An increase in employment in the technology sector has coincided with this sector’s expansion. According to this data, the number of workers in this industry increased by about 10% year between 2012 and 2017, which is nearly six times the average growth rate of 1.6 percent seen in non-technology sectors during the same time period.
  2. The number of digital professionals hired into non-technology sectors has increased in tandem with the rising adoption of digital technologies by these businesses. Similar to this, a 2019 research on Indonesia’s labor market shows a growth in the need for digital talent by businesses in these industries. Fintech professionals in financial services companies and e-commerce managers in retail businesses are two examples of “in-demand” digital occupations.
  3. Non-digital workers with digital abilities have also seen an increase in employment, albeit at somewhat slower rates than digital workers in non-technology areas. This is in line with more extensive research, which demonstrates that the nation has less capacity than other developed nations to cultivate and retain workers with digital skills. On the “Global Knowledge Skills” criteria, which heavily emphasizes digital skills, Indonesia was placed 84 out of 132 countries under the “2020 Global Talent Competitiveness Index (GTCI),” which rates nations based on their capacity to develop, attract, and retain talent.

At An Accelerated Rate Of Skilling, Digitally Skilled Workers Could Contribute US$303.4 Billion To The Economy By 2030

Even though the expected value of digital skills in 2030 is based on current trends, this value may grow significantly if Indonesia accelerated its rate of digital skilling to meet the current performance of global leaders. The country’s GDP contribution from digital skills could increase even more in 2030 under this “Accelerated” scenario.

It is anticipated that in the “Accelerated” scenario, non-technology industries will continue to contribute a disproportionate amount of GDP. Workers in digital roles make up a relatively minor portion of this, with the rest workers having non-digital roles but nevertheless needing digital skills to execute their tasks.

The estimated value of digital skills in Indonesia is split down by sector and reveals some intriguing patterns. The value of digital talents in the nation will reportedly be highest in the technology industry by 2030. It is not surprising that a large portion of the nation’s digital talent may continue to be centered in the technology sector given the current nascency of digital capabilities in the employment base of Indonesia’s non-technology industries.

When industries are evaluated based on projected growth in the value of their digital capabilities between 2019 and 2030, the picture begins to look very different, with Indonesia’s non-technology sectors projected to witness some of the highest rises. This is greatest in the professional services sector, where it is anticipated that between 2019 and 2030, the relevant GDP contributions from people with digital skills in that area will increase by over 10 times. Similar to this, it is anticipated that the value of digital skills will increase by 5.5 times in the financial services sectors, outpacing the estimated expansion of this value in the technology industry.

Key Trends Observed In The Financial Services Sectors:

Indonesian businesses are making more of an effort to hire IT personnel due to rising investments in technological solutions like big data analytics and automated compliance checks. According to a study of the job market in the industry, the growth of financial technology, or “fintech,” has increased the need for “fintech specialists” in financial services companies. Employers in non-digital roles are also expected to have a minimum of entry-level digital abilities that would enable them to use these new technologies efficiently.

Three Areas Of Action Will Be Needed To Fully Unlock Indonesia’s Digital Skills Opportunity

1. Equipping The Current Workforce With Digital Skills

It is crucial to make sure that Indonesia’s current employees have access to the appropriate resources to obtain the necessary digital skills training. In particular for MSME owners and employees, these include both basic and advanced digital skills such as the use of productivity software, web browsers, and other straightforward digital interfaces. 

There is a perceived dearth of both “hard” and “soft” digital skills in the nation. Thankfully, the government is taking steps to close the gap in digital skills. The Ministry of Manpower (MOM) has boosted funding allocation for “preemployment card” to assist laid-off workers, informal workers, and MSME owners as part of the national response strategy to the COVID-19 outbreak.

These cards have credit that can be used to pay for courses that will improve or update their skills. The MOM has highlighted that this will be a crucial component of their “three-part” skilling strategy, which includes “skilling,” or providing graduates with the work-ready skills they need to find employment, “re-skilling,” or increasing the employability of long-term unemployed workers, and “up-skilling” (enhancing the career options of temporarily unemployed workers). The Ministry of Industry created a list of training courses for business leaders, public servants, and vocational educators as part of the nation’s Industry 4.0 plan; however, given that this is a pilot initiative, the distribution of these courses has not yet been scaled up nationally.

2. Preparing The Next Generation Of Workers

It is crucial to start sowing the seeds for a future generation of flexible, tech-savvy workers now. This entails creating an education system that is flexible and sensitive to the evolving technological landscape as well as an ecosystem of initiatives targeted at equipping graduates with digital skills prior to their entry into the workforce. There have already been major efforts made in this direction by the Indonesian government. The government committed 20% of its state budget to education in 2019 to assist schools in educating and preparing their students for the new digital era.

These monies will be utilized to streamline curriculums, train new instructors, and educate soft skills.  The “Digital Talent Scholarship Online Academy” is a significant government project run by the Ministry of Communication and Information Technology. The school offers financial support and capacity-building programs aimed at providing online businesses with fundamental digital competences, such as cloud computing, network engineering, chatbot programming, and digital marketing, to expedite the digitalization of MSMEs during the COVID-19 epidemic. This program seeks to train 35,000 people from various demographic groups, including recent graduates, those with vocational degrees, and teachers of coding.

3. Broadening Digital Access To All

The importance of guaranteeing everyone’s access to opportunities for digital skill development cannot be overstated. To improve these neglected populations’ employability and capacity to gain from digital skills, targeted programs must be developed that are specifically suited to their requirements. This is crucial in Indonesia, where female, young, and rural workers have historically had considerably worse labor market outcomes.

To increase the inclusion of underprivileged communities in the workforce, the government is closely collaborating with business and civil society players. The “Online Academy” is a special training program for the “Digital Talent Scholarship Program 2019” that anyone can use to learn new digital skills. For instance, the “Open Distance Learning” initiative was put in place by the Ministry of Education and Culture to increase access to education for Indonesians living in rural and remote places.

Although these initiatives are essential to creating the momentum required to spread the advantages of technologies to everyone, they are currently being carried out on a small scale, and they frequently focus primarily on a small number of geographical groups. There is therefore potential for national policy measures to provide equal access to skill-building opportunities across the nation.

Key Themes For Treasury Management In 2023

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6 January 2023

Treasury priorities have evolved as a result of political uncertainty, technology breakthroughs, and global economic insecurity in international marketplaces.

The main priorities for Treasury teams in 2023 include strengthening liquidity management, boosting cash forecasting capabilities, and improving the organization’s capital structure. Many of these themes are still vital in 2023, but priorities have evolved as a result of political uncertainty, technology breakthroughs, and global economic insecurity in international marketplaces. That being stated, here are four critical elements that finance and treasury leaders must be aware of:

Enhancing Liquidity Management 

Given the uncertainties that modern financial leaders face, it is critical to adapt your liquidity management plan to shifting conditions. It should be noted that new technology can promote tactical and strategic evolution. Not only does technology influence how payments are made, but it also influences how businesses handle and account for payments. Many businesses are seeking for ways to streamline their payment procedures, and the rewards are substantial.

Companies can save money by integrating payment systems with their current treasury workstations and ERP infrastructure. A central payments system will incorporate the most recent security procedures and regulatory compliance modules, as well as the ability to accept all payment kinds. Furthermore, visibility is essential for boosting controls, and implementing cloud-based ERP or treasury workstation solutions can connect cash flow planning tools with your company’s CRM and sales management systems. This may be a great tool for providing relevant visual cash flow measurements to leaders across the firm that represent the strategic drivers of rigorous cash flow management.

Improving Cash Forecasting Capabilities

A company’s worst nightmare is running out of cash or miscalculating future cash inflows and outflows. To avoid such disaster scenarios, businesses employ cash flow forecasting tools to better understand their existing and future financial positions. It is critical to have accurate cash forecasting assessments in place because they are critical to the company’s success. CFOs can base strategic investments and financial decisions on them, and they can help CFOs decide how to shape the company’s future.

Cash flow forecasting, like most things, is easier said than done. Creating accurate forecasts can be a difficult task. CFOs must examine numerous factors, especially as the company grows in size. Fortunately, there are several excellent cash flow forecasting tools available to assist CFOs in overcoming obstacles and making forecasting easier and more accurate. Such solutions will provide CFOs with a real-time snapshot of the company’s cash situation, inflows, and outflows whenever they need it. The more recent the data, the more effectively CFOs can justify their judgments.

Since the previous year, it has been widely accepted that both the gathering of real-time information and the connectivity to all source systems should be automated, allowing CFOs to receive real-time insight into their cash position without the need for manual labor. On that topic, organizations should examine their software and seek for methods to improve or enhance such systems so that those insights can be categorized and effectively transmitted to CFOs, since finance chiefs continue to struggle with optimizing such data. Companies should identify strategies to update their current systems in order to improve cash forecasting capabilities in 2023.

Optimizing Capital Structure

There is an increasing focus on how corporations change, or fail to modify, their leverage. The adjustment pattern is interesting because it can assist to distinguish between competing capital structure theories. According to prior research, corporations are more likely to issue stocks when their market valuations are considerably higher than their book values and their past market values are high. As a result, the companies become underleveraged or have their obligations lowered in the short term.

Due to the companies’ relatively quick changes of ideal capital structures, the outcomes of long-term measurement on capital market timing do not seem to have an impact on the choices made by the firms regarding capital structures. The analysis leads to the conclusion that equities market timing is significant in the short term but not in the long term.

It is obvious that economic conditions are dynamic, and businesses cannot operate in a market that is actively using stagnant and outdated business practices. To avoid problems like those in the previous example, finance leaders and CFOs must have a longer-term view than a short-term one while attempting to optimize a company’s capital structure. Before changing their capital structure, CFOs should also keep the business objectives in mind.

Being A Value-add To CFOs & A Strategic Advisor

In terms of financial affairs, treasury experts essentially serve as the company’s trusted consultants. They are constantly thinking ahead and strategizing how they may provide value and promote success. Performance and financial results will be directly impacted by the choices they make. It is clear from the nature of their position within the organization that they must collaborate closely with the CFOs and other business leaders in finance. A working partnership between the two is necessary.

Treasury professionals will evaluate the risk, consider the benefits and drawbacks, and offer recommendations on whether a company should extend operations into a new location in order to produce significant income and get a competitive advantage. If so, they will help the CFOs create and carry out a financial plan that supports business growth.

In a different scenario, economic issues including interest rate increases, regulatory changes, and unstable currency exchange rates can seriously affect any firm. Treasury experts will examine these market conditions, predict how they may or may not affect the company, and work with CFOs to develop ways to reduce any potential financial risks to the company.

The treasury function has unquestionably become more significant and has improved in terms of the versatility that needs to be taken into consideration. Businesses must consider these important treasury management themes in 2023 if they want to guarantee the long-term survival of their enterprise during these years of highly volatile markets.

2023: Finance Functions Need To Change With The Times

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4 January 2023

Rapidly evolving technology, regulatory constraints, and relentless economic pressure may be hindering firms from making needed investments to ensure their survival.

The pressures on finance leaders are relentless in today’s interconnected world.  CEOs demand deep, forward-looking financial information to help them assess risks, identify new opportunities, and handle economic shocks and volatility. The company’s present and future value as well as the caliber of its insights are now linked to one another which gives rise to necessary changes involving technology. 

Unfortunately, a lot of finance functions still cannot provide the information necessary to navigate through the current hostile landscape. This is because digital transformation initiatives have not gone far enough. Finance might be viewed as a “traditionalist” team rather than a trailblazer in new ideas as a result, many finance teams still focus primarily on acquiring data rather than evaluating it. Many are still quite involved in typical transactional responsibilities.

So how can finance leaders get back on track with digitization? Here are 4 priorities that will help; 

1. Redefining Resilience 

The biggest obstacle to better risk management is a lack of useful data. Numerous firms are entrapped by antiquated technologies and internal silos that contain rich data that may revolutionize risk management. Few companies are able to access that data easily, integrate it with other data sources, and create the data models and predictive capabilities needed to change their methods. Systems problems in medium-sized businesses are the main impediment to better risk management. Lack of technology and tools to streamline the audit process is the main hurdle for this market.

These days, corporations deal with a massive amount of data daily. The business that can properly use that data and evaluate it can take a step toward improving how it manages risk. Predictive analytics can be used by businesses, for instance, to identify which clients are more inclined to pay their invoices on time, a factor that can have a big impact on cash flow.

To advance, finance leaders must make sure they have the systems and data management strategies necessary to locate the appropriate data, ensure its high quality, and deliver it to those who must make crucial risk-based choices. Having access to the data is obviously just the beginning. In addition to having a culture that values data-driven risk analysis, organizations will require the abilities to analyze data and create risk analysis models. Senior leaders, particularly CFOs, must be willing to speak out in favor of risk assessments for this to happen. Redefining resilience will depend on finance executives who practice what they preach.

2. Redefining Intelligence

Advanced data analytics can transform fundamental duties for the finance function. It could improve the accuracy and sophistication of revenue forecasting. Financial data can be combined with non-financial data (consumer data or data from other company systems) to produce fresh insights and provide input for scenario planning. However, not all finance teams are at the forefront of analytics, despite other departments like marketing maybe being.

Challenge Of Integrating Finance And Non-Finance Data

  • Compared to routine, highly structured financial information, non-financial information is frequently unstructured or semi-structured and may require substantial modification before use.
  • Silos in organizations and technology may make it challenging to obtain non-financial data.
  • The use of non-financial data, such as customer information, is frequently constrained by specific regulatory requirements.

Finance executives must recognize the areas where merging financial and non-financial data can be beneficial in order to address this problem. To do this, decide what inquiries you wish to make of the merged data. Finance leaders can create an investment case for the necessary IT systems, analytics tools, and analytics capacity by having a clear understanding of where value can be generated and the insights that can be gained.

Finance leaders must make sure that their team takes on a significant stewardship role in enterprise data if they want to advance data intelligence. Working collaboratively with IT to convert systems and release data locked in organizational silos and outdated systems is required for this. Beyond system change, determining which datasets—financial and non-financial—are most beneficial to the firm is another important task. Finance may collaborate with other teams to establish trust in the accuracy of those datasets once they have this clear picture. In this manner, enterprise intelligence is redefined using trustworthy, solid data.

3. Collaborative Leadership

Finance is being challenged more than ever to give the company strategic insight, the foresight to capture opportunities, and the ability to control volatility and risk. The finance team must interact and work together with a wide range of stakeholders in order to accomplish that effectively. Different working styles will unavoidably contribute to the development of connections and collaboration; nonetheless, it’s important to accept these variations in order to prevent issues.

CFOs must establish relationships with their operations counterparts, CIOs, and CHROs in order to take advantage of the mix of financial and operational data. CFOs, CIOs, and CHROs must all concur on the metrics and performance indicators that will direct their efforts in the area of data insight. They will therefore need to establish shared performance metrics to enable collaboration and efficient management of opportunity and threat. When CFOs have a comprehensive understanding of the company’s digital strategy, they can collaborate with CIOs to invest in the correct technologies and with CHROs to ensure that the talent is in place to take advantage of those technologies and that the proper KPIs are in place to focus efforts.

Future success in our increasingly digital economy depends on adopting a more collaborative mindset and way of working. The chief financial officer (CFO) must be seen as more than just the head of finance as their position becomes increasingly significant. CFOs must comprehend how their concentration areas relate to those of other executives inside the organization as part of this expanded position. CFOs must establish structures and procedures, such as regular cycles of meetings and calls, to foster effective C-suite collaboration. 

4. The Right Talent

Even while there are technical advancements to improve the finance department, CFOs may not have a team that can take advantage of such technology. In fact, many finance departments acknowledge they lack the personnel and skill sets required. This is owing to the fact that many of their current employees have traditional financial abilities, and they have difficulty finding qualified candidates due to the fierce competition in the market. In such a competitive climate, CFOs can increase the pool of available finance expertise by hiring from unconventional sources, such as individuals with various educational backgrounds.

In the current environment, several of the top finance positions are hiring individuals with degrees in the liberal arts or sciences, such as physics, rather than the conventional college graduates they might have had in the past. Additionally, this broadens viewpoints and helps find employees who can develop into business partners rather than just managing finance delivery procedures.

When it comes to the traditional financial capabilities of present personnel, CFOs can fill up these skill gaps by investing in training and development that hone digital and advanced analytics abilities. Finance executives will be in great demand in a digital economy if they combine a strong background in finance with knowledge of fields like advanced analytics, artificial intelligence, and blockchain. These executives will be needed to oversee the digitalization of finance as well as to analyze the effects of technological advancement on the company’s business model and expansion plans.

DigitalCFO Asia Finance Predictions 2023

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DigitalCFO Asia | 19 December 2022

What will be in the finance spotlight for 2023?

DigitalCFO Asia gathers predictions and trends for companies moving forward in 2023.

2023 APAC Predictions imply a more hotly contested economic market brought on by a more turbulent geopolitical environment. Considerations of the geopolitical climate, record high inflation, rising interest rates, and critical analysis on emerging technology continue into the new year as APAC financial industry sets to maintain the economic situation. South-east Asia’s economic growth rate may slow in 2023 as global headwinds worsen, but the area is still expected to be a bright light in a world that is on the verge of going into recession, according to experts.

The financial predictions for 2023 in the Asia Pacific are as follows:

1. Predicted Lower GDP Growth for the APAC region

While many high-investment APAC regions have shown sturdy resilience against recent commodity-price shocks and tighter global financing conditions, it is expected that 2023 will weaken domestic and external demand for many APAC sovereigns. While predictions have APAC growth rates generally higher than other regions, the aftermath of the pandemic outbreak continues to be felt, though at a rapidly fading pace. Investments and consumer consumptions within the APAC region are likely to be affected as financing costs continue to rise due to the impact of tighter monetary policies and rising inflation set on by less supportive fiscal policy settings.

Furthermore, economic recessions in the West following the Ukrainian War and a slowly recovering Chinese market will reduce demand for Asian imports. It is expected that pre-pandemic fiscal deficit levels are still long in the future for many APAC Sovereigns as structural consolidation measures are put into place and enacted across the region. However, the slow fiscal consolidation forecasts will only result in a small number of APAC sovereigns experiencing substantial reductions in public debt over the course of the next few years. That being said, the outlook distribution for the APAC region is fairly balanced throughout sovereigns, with only two negative outlooks from the Philippines and Maldives and one net positive in Vietnam.

According to Mike Polaha, Senior Vice President, Finance Solutions and Technology at BlackLine, economic growth in Asia-Pacific is expected to slow down amid tightening global conditions, inflationary pressures and recession fears. In Singapore, the Monetary Authority of Singapore predicts that economic growth will slow ‘below trend’ in 2023, weighed down by key external-facing sectors. This possibility’s uncertainty elevates the need for Finance & Accounting (F&A) to focus on cash flow and working capital management priorities.

CFOs can be expected to ask their organizations in 2023 to optimize and maximize cash across the enterprise. In turn, this demand requires F&A professionals to obtain clearer visibility into where cash is originating and exiting the business. A recent global survey of almost 1,500 Finance & Accounting professionals by BlackLine suggests a lack of significant confidence in cash flow visibility. In Singapore, less than 4% of C-suite and F&A professionals surveyed are entirely confident in their visibility over cash.

This is despite nearly two-thirds (61%) of survey respondents in Singapore saying that understanding cash flow in real-time has become more important for their company in 2023. In fact, one of the biggest challenges they face is being able to provide accurate data quickly enough to help the organization respond to market changes.

The survey also found that more than half (57%) are concerned that customers will have less income to spend, which will affect sales and revenue; while about half (51%) are worried that their organizations will face higher costs.

To mitigate these concerns, F&A professionals will need to seek a better understanding of accounts receivable timing to make quicker and more productive interventions, and invest in automated processes and software assisting these strategic working capital aims. Nearly half of Singapore respondents (49%) in the BlackLine survey plan to implement or scale working capital automation solutions in 2023.

2. Regional Comprehensive Economic Partnership is expected to boost rising APAC cross-border commerce

QR code-based digital currency pilots across the Southeast and East Asian region will continue to maintain strong resilience in the APAC Payment Market following into the new year. Supported by a more practical innovation focus, these cross-border banking systems use newly developed modern technology such as permissioned blockchains and APIs for interoperability between national APAC sovereign platforms, boosting the potentiality for regional commercial growth in light of rising inflation and weather-related costs coming in the new year. 

The emphasis on compatibility and interoperability between the Southeast Asian multi-central digital currency pilots, China’s Cross-Border Interbank Payment System and India’s Unified Payments System will only continue to emboss the financial portfolio of the RCEP with use in processing regional cross-border transactions that the 50-year old SWIFT system is ill-equipped in meeting the operational needs of, leading to expectations that banks and established payment firms will increase investments in continued development of new technologies that can seamlessly integrate with APAC payment networks. However, while the technology is expected to serve as a boon for APAC in the new year, the highly competitive consumer payments market is projected to draw less investments in 2023 as it did in 2022. Counter to that, B2B payments are expected to go on an upward incline with continued modernization and adaptation within the APAC region. 

3. APAC Banks are expected to remain steady into 2023

After interest rates rise in most APAC economies in 2022, with the exception of China and Japan, it will be crucial to keep an eye on how asset quality and net interest margins interact. Even as support measures wind down, it is anticipated that loan deterioration will remain mostly low throughout APAC. Loan provisioning appears to be good in the majority of markets, and relief and forbearance measures may be extended in some areas of the region, namely in EMs. Indian state banks often have the smallest buffers, but their ratings gain from the notion that the government will help them, which is a characteristic shared by APAC EM bank ratings. 

Even with normalized credit costs and loan growth being negatively impacted by the generally unfavorable external environment, we expect a better outlook in Singapore as profitability measures increase further to levels above pre-pandemic levels. However, it’s unlikely that this will be enough to raise Singaporean banks’ ratings.Because of the presumptions around support, sovereign ratings will continue to be significant for many bank Issuer Default Ratings in APAC. With the exception of the Philippines (negative), Sri Lanka (defaulted), and Vietnam, outlooks on sovereign ratings are largely unchanged (Positive).

4. APAC Firms will use emerging technologies to reduce dependency on global solutions

By investing in possibilities that lessen their reliance on global solutions, APAC companies will narrow their regional emphasis to speed growth. 43% of business and technology leaders in APAC who place a high priority on platforms employ sector-specific cloud solutions. 45% of the world’s industrial sector is currently made up of businesses engaged in manufacturing, construction, utilities, and other industrial activities. Through the use of digital industrial platforms, these businesses will drive industry-wide cloud adoption and provide enduring value to customers. While most large businesses in APAC have used RPA over the past five years, many still find it difficult to pinpoint high-value operations that can be automated. 

One in five businesses in the region will embrace process intelligence solutions in 2023 to revive stagnantly or failing RPA initiatives since APAC now holds 11% of the global market for process intelligence. Container-based, microservices-oriented architectures with distributed capabilities will be prioritized by APAC companies. These architectures can be advantageous for a variety of technology domains, including artificial intelligence (AI) and machine learning (ML), data management, the Internet of Things (IoT), 5G, edge computing, and blockchain.

5. APAC firms will struggle to meet rising customer expectations

Businesses will find it challenging to keep up with growing customer expectations regarding omnichannel experiences and environmental, social, and governance (ESG) obligations despite embracing technology-led solutions to better the lives of customers and citizens. Continued value-consumer demands for firms to publicly commit to Environmental, Social and Governance efforts in an attempt to align with current value trends. However, the pressure to maintain market position will likely cause some to overstate or misrepresent their claims to ESG efforts. This will result in penalties of upwards of US$10 million or more for those found giving misleading ESG claims. 

Increasing regulations in such cases come as APAC regulators follow in the footsteps of their US and Europe counterparts following the social impact of greenwashing. At least fifty APAC firms are under investigation for performative ESG efforts, with five expecting severe fines for their offenses. Most of those firms are financial services firms, with many expecting to lose brand equity or revenue following any reputational loss due to the claims against them. Such can be seen when companies celebrating Women’s Day had their gender pay gaps revealed on social media, leading to ensuing litigation, regulatory fines and brand damage.

6. CFOs are taking charge too, not just CEOs

According to Mike Polaha, Senior Vice President, Finance Solutions and Technology at BlackLine, if CEOs are typically seen as those who bring the company’s vision to life, map out its growth, drive profitability and for publicly listed firms, increase share prices, CFOs are the bridge to making this vision work considering the ebbs and flows in the market and the organization’s capabilities. They are responsible for financial planning and stability, all of which contribute to business health and employee well-being.

While many respondents saw that CEOs and CFOs have equal responsibility to help navigate a business through the winds of change, CFOs have a greater tendency to believe this burden is theirs alone to bear. BlackLine’s survey saw that 68% of CFOs in Singapore said they were responsible for ensuring their company’s well-being during an economic downturn, compared to 30% who said that this was the responsibility of their CEO. CFOs in Singapore also saw that it was their responsibility to help steer the business successfully through a geo-political conflict (54%), the war for talent (54%) and inflation (65%) compared to CEOs.

An unpredictable and harsh economic climate could put tremendous pressure on CFOs to co-lead the business. But their knowledge of all things finance and marketplace movements will be critical in helping businesses go through what might possibly be another challenging economic year.


As APAC continues into the new year, financial awareness of the tribulations faced by regional firms is required to adequately navigate an ever-evolving situation following post-pandemic events and the continuation of emerging technologies taking center stage within the markets. It is anticipated that more businesses will invest in automated intercompany financial management solutions in the upcoming year. Due diligence for M&A transactions, regulatory compliance, and entity data management are all made possible by this.


CFOs In Building Operational Resiliency

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Fatihah Ramzi, DigitalCFO Asia | 9 December 2022

Natural disasters, catastrophic occurrences, and operational mistakes will affect business operations and how well CFOs integrate people, processes, and technology will determine how well they manage risk.

Operational resilience is the capacity of an organization to recognize, avoid, respond to, recover from, and learn from interruptions that can affect the provision of operations or business services. Operational resilience ensures that a business can continue to operate despite difficulties and disasters. Delivering products and services is made possible by resilience. Business continuity and resilience are related, but resilience is a broader concept that encompasses other disruptive factors including cyber, technology, supply chain, and the current pandemic.

The COVID-19 epidemic and the ensuing economic upheaval are only two recent occurrences that underscore the necessity to comprehend and prepare for the probability of multiple, converging crises and their effects on operational resilience. Daily interactions between consumers and businesses and financial services include everything from purchasing coffee to paying bills or getting a mortgage. The resilience of these services is crucial. If their products are unavailable, financial services companies run the danger of losing the trust of their customers. But they also run the risk of breaking industry rules. 

Organizations must be able to bounce back quickly from any disruptions they experience in order to be considered resilient. They must comprehend how service interruptions affect customers in order for this to be possible. However, this is challenging due to the growing complexity of IT. Agile development is facilitated by contemporary methods like multi-cloud architectures and the usage of open source code libraries, however manual monitoring of IT systems is highly difficult.

Financial organizations, especially CFOs, will need to deploy end-to-end observability throughout the whole IT infrastructure to foresee and fix issues before customers are impacted. Greater resilience will be made possible as a result, and financial services providers will be able to stand out from the competition by offering seamless digital experiences to their clients.

The fact that operational hazards might not be completely predicted is one of their major challenges. The very fact that risks are interconnected—with other businesses and the infrastructure of the financial markets—can have a negative effect on society. The resulting financial and reputational catastrophe might have a cascading effect on the entire industry. CFOs must accept that third-party service failures, system failures, and cyber intrusions will occur.

Unexpected outages, natural disasters, catastrophic occurrences, and operational mistakes will affect business operations and have an effect on stakeholders, clients, and the whole economy. How well CFOs integrate people, processes, and technology inside an organization will determine how well they manage risk. It’s crucial to make sure that a solid multi-layer risk strategy integrating the newest tools and technology is used to identify and manage the risks that arise between these interlinks.

CFOs can increase business continuity and control “known unknowns” by implementing an effective operational resilience program. Operational resilience goes beyond operational risk management and business continuity. It seeks to lessen the effect on customers and the larger economy. The need for CFOs to maintain business continuity by building operational resilience into their organizational DNA has been amply demonstrated by significant disruptive events like the COVID-19 pandemic.

Steps to Build an Operational Resilience Framework

1. Define Key Business Services / Critical Economic Functions (CEFs)

Identifying pertinent important business services that, if disrupted, might significantly impact the organization, customers, and the business environment is the first step CFOs should take to streamline and strengthen their operational resilience program. Since all subsequent processes depend on the accurate identification of these CEFs, the idea of potential harm is fundamental to operational resilience and serves as the program’s central organizing principle.

To effectively do this, organizations will need to:

  • Align the organizational risk appetite with the organizational structure, corporate goals, market expectations, and supervisory objectives. This will help an organization to gain a fundamental understanding of the business service alignment to the overall business strategy and empower the organization to determine what its organizational resilience is.
  • Determine who uses each service and engage them properly because their input is essential to the process.
  • Bring the important insights into one view. This gives a company the knowledge necessary to further develop strategic and important activities that are in line with the organization’s level of risk exposure. Additionally, it offers visibility over connected third parties, associated processes, systems, people, and dependent persons that could affect corporate goals.

2. Set Impact Tolerance and Risk Metrics

Critical disruptions are caused by a variety of known and unknown events, which could endanger the organization. If businesses want to accurately report on the stability of the organization, it is crucial to try to foresee, prevent, control, or minimize these variables. When establishing impact tolerances and risk metrics, organizations need to be aware of the following:

  • Establish tolerances with complete visibility and give operations and investments top priority. This is crucial since many firms are already required to make thorough, verifiable decisions in order to maximize their investment money.
  • Become more aware of corporate services and procedures. Value-based implications that jeopardize the firm’s survival, volume-based impacts that affect consumers and market participants, and time-based impacts that undermine financial stability are among those that the board must rank and accept.
  • Set tolerances using a logical and sensible process that takes into account all interconnected regions and processes. Realistic scenarios will be made possible, allowing for a better understanding and analysis of the impact tolerance as well as a quick examination of the different risks that might have an influence on the sector in which the organization operates and impacts on the overall stability of the economy. In addition, it’s crucial to enable a precise grasp of the project’s scope and organizational impact, in connection to its effects on customers and partnerships.

3. Understand Dependencies – Upstream and Downstream

Today’s business climate is dynamic. Recognizing the dependencies is a crucial first step for a CFO to create a relational data architecture to map the people, processes, technology, and third parties needed to deliver the business service. Understanding the links and points of view between internal and external factors is essential to fostering business resilience, as is making sure the whole picture is present, up to date, and that all changes are pertinent.

Such a strategy can aid in navigating the risks offered by third and fourth parties given that companies are becoming more dependent on third-party suppliers and the outsourcing of some operations. Gaining a better knowledge of upstream and downstream relationships can be accomplished by using the following best practices:

  • Utilize technology to get a single, comprehensive view of all crucial operations that a business has identified in accordance with the primary elements to which it needs or wants to be resilient. Make sure everything is connected and understood by looking at the horizontal and vertical views of the vital capabilities in order to identify the obstacles.
  • Make sure the company approaches third- and fourth-party providers with a risk-based and balanced strategy. To continue fulfilling their commitments, they will need to take into account the type, size, and complexity of their operations. Businesses who work with these providers are required to take reasonable precautions to handle their business in a responsible and efficient manner with suitable risk management systems.

4. Leverage Scenarios for Potential Points of Failure

In order to better understand the organization’s risk appetite and skills while searching for potential sites of failure, it’s crucial to make sure the impact on the business will actually occur. When creating scenarios for potential areas of failure, keep the following in mind:

  • Include previous failures that were both under the organization’s control and uncontrollable to assist develop operational resilience and offer improved insight across processes. Examine business continuity management, data management, digital risk management, and third-party risk management to bring together various parts of the organization. Clarity when comprehending the actual possibilities might help CFOs better monitor cross-disciplinary risk scenarios.
  • Utilizing the relational data structure, identify impact tolerance scenarios for people, processes, systems, and outside parties. This can be used to evaluate the influence of interrelationships. Understanding where stakeholders come into play can be improved by superimposing the scenarios on the business framework.
  • Recognize how the risk appetite range can be used to develop action plans to reduce risks. Plot the data from risk scenarios using the service’s vitality, reliance metrics, and microeconomic intelligence. To create a solid business contingency plan, outline the action plan utilizing data on internal capital adequacy assessment, prioritizing of the recovery, governance framework, culture, corporate structure, controls, and regulatory framework.
  • By forcing people to work outside of their comfort zones, CFOs can identify the weak points in a resilience plan. This can help CFOs to better grasp the operational resilience plan’s complexity, business criticality, usage frequency, visible areas, defect-prone locations, and other quantifiable success criteria.

Building Digital Trust Amidst Rising Cyber Threats

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Fatihah Ramzi, DigitalCFO Asia | 29 November 2022

Trust must be woven into the very fabric of organizations’ digital operations.

Embrace it or miss the next opportunity for digital growth – the trust dynamic that the digital era unleashes is enormous. In the digital era, companies have more potential than ever to be quick, flexible, and innovative. The only way to maintain competition is to seize the possibilities that are presented. Organizations are becoming more and more dependent on IT systems, therefore these systems cannot break down. The role of technology in a business’ success is crucial. However, businesses must have confidence in it, and their clients, shareholders, and regulators must also share the same confidence. 

Customers that trust businesses will purchase their products and services. It suggests that they have faith in the company’s ability to protect and safeguard their data. When a business has a supplier’s trust, the supplier knows that the business’ processes will not let them down. It also implies that the business has the confidence to advance their company by embracing technology and the chances it presents. 

Trust must be woven into the very fabric of organizations’ digital operations. Business owners will be able to embrace a digital future with confidence and take advantage of the exponential impact it has on the business’ growth if they have faith in their data and security, have resilience built into their systems, and know that their digital transformations will be successful.

Only the fit will survive and thrive in the decade of digital transformation. Businesses must also be digitally trusted by their clients, suppliers, and other stakeholders if they want to be digitally fit. The ability of an organization to adapt to the new trust dynamic is more important than ever for its development. There is seldom a week that goes by without a new illustration of how the power of digital technology is continuing to upend conventional business practices and provide creative opportunities to develop new methods of value creation.

Digital opportunities cannot be ignored any longer. However, taking risks by moving too quickly and without clear direction could hurt the business. To feel confident in their decisions, business executives need to manage risk and foster trust. There are seven significant technological advancements that are already transforming the way business is conducted and are essential to the success of any digital organization;

Social media – Businesses can utilize social media to gain knowledge and communicate with customers in novel ways. Businesses who have a well-defined social media strategy and apply governance will benefit. The connection on social media will become a bigger component of the trust between a company and its stakeholders. Companies need to  interact with them, listen to what they have to say, and set the agenda for managing their reputation.

Smartphones and mobile devices – Present new business options. From the palm of their hands, clients and users can consume information, make purchases, and communicate. The use of mobile devices has evolved into a daily necessity. The digital economy today is supported by mobile payments hence why, for consumers to feel secure utilizing it, they must have trust in the business.

Analytics – data is pervasive, and its importance to the company is rising. Get savvy with data and learn how to exchange, manage, and secure it to avoid falling behind. Business owners  must be aware of what they can use it for and what they cannot. The team must also be knowledgeable about their duties related to handling data. Management must have faith in the facts and analysis used to make business choices.

Cloud – By using cloud operators to store data and source services and apps, companies are giving up the feeling of security that comes with having a specific physical location. Cloud services will be adopted far more quickly than most businesses anticipate due to cost and simplicity. Users will migrate effortlessly and unknowingly between in-house and cloud-based applications thanks to the development of a cloud-based “internet of applications.” New methods of controlling and sourcing services are necessary when businesses trust suppliers to manage their data and services.

Hyper-connectivity – Live and work in a networked society. By sharing data, business partners can access systems, and transactions that go in and out almost completely unattended. This kind of collaboration requires a certain degree of trust and businesses  cannot afford to make a mistake.

Digital identity – Knowing who the business is dealing with is essential in the upcoming digital wave. As customers share their consumption data and do business online, they will also desire more access and control over their personal data, or their digital identity. This will move to the top of the agenda due to new data protection laws, rapidly expanding cyber security risks, and concerns about digital trust across international borders.

Speed of change – Businesses rely more and more on technology-driven transformation initiatives. They can only remain ahead of the competition and keep a competitive edge by looking for novel ways to provide goods and services. Organizations require a transformation process that will produce business results. Businesses who have confidence in their capacity to implement technology-enabled transformation will stand out in this environment.

Businesses will be able to unleash their potential in these sectors thanks to digital trust and a fresh perspective on risk. By working with service providers to create a digital trust strategy for the company, decision-makers will get the confidence to act in the best interests of their organization and promote profitable expansion. The digital agenda is supported by risk management and trust-building as digital platforms take on a more vital role in the execution of company goals. Businesses must have faith in each of these five areas if they want to develop trust:

  • Confidence that identification and privacy issues have been addressed and that systems are secure to protect data.
  • Confidence in the accuracy of the data and in one’s capacity to take use of the information it can provide about a company.
  • Confidence that corporate systems, whether they are internal systems or cloud-based services, are monitored and controlled appropriately to make sure they perform as intended
  • Confidence that digital platforms will be accessible when needed (24/7) and that technology risks are recognized and effectively addressed.
  • Confidence to start and complete the following complicated digital transformation initiative in a way that produces the anticipated benefits, on schedule, and within budget.

Regulatory Challenges Businesses Faced In 2022

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Fatihah Ramzi, DigitalCFO Asia | 29 November 2022

The three most significant problems that organizations have encountered in the year.

The difficulties faced by business owners never cease. To keep their businesses afloat and relevant to the situation of the market, they are always forced to come up with new strategies. The difficulties facing entrepreneurs in 2022 are considerably larger. Despite the pandemic’s slow economic recovery, it will take some time for businesses to fully bounce back. Numerous organizations continue to face challenges, including those related to recruitment, finances, and digital transformation.

However, business entrepreneurs have always been renowned for their tenacity and ability to consistently find solutions to any problems that arise. This is true whether we’re discussing businesses that are just getting started or ones that have been operating for a while. But what are some of the most urgent issues that entrepreneurs will deal with in 2022? In this post, we’ll take a look at the three most significant problems that organizations have encountered in the year.


1. Fairness & Inclusion 

Many businesses are being forced to increase their commitments to corporate social responsibility with an emphasis on equality and justice for underserved communities as a result of pressure from activist investors, the general public, and their own employees. Over the past two years, fairness issues have gone beyond DEI.

Through the use of regulations intended to eliminate unfair advantages in personnel decisions, businesses have historically attempted to promote fairness. To prevent hiring managers from judging candidates based on their supposed gender or race, recruiters, for instance, remove the prospects’ photographs from their resumes. To prevent employees from being paid more or less than their coworkers at the same level, a business may also establish stringent pay bands.

These regulations can reduce unfairness, but they are insufficient to produce a very fair working environment. And when employers paid more attention to where workers felt injustice occurred, they discovered that hiring, promotion, and pay accounted for only 25% of this view. The majority of these encounters take place during regular work hours. Organizations require new ideas, not simply rules, to handle these increasingly ubiquitous fairness concerns. Instead of eliminating unjust advantages, they ought to look for ways to lessen disadvantages so that most or all of the workforce benefits.

2. Climate & Sustainability

Simply put, many species won’t live through the 21st century if businesses do not behave responsibly as members of the global community. According to Environmental Sustainability, the rate of species extinction due to human activity now is hundreds of times higher than it was originally.

Given that corporations account for the majority of global emissions, sustainability has thus become a crucial problem for them. This is why companies will inevitably foster a dying planet if they do not contribute to the solution. The “Race to Zero” campaign, which aims to take strict and urgent action to halve global emissions by 2030 and deliver a healthier, fairer zero carbon world in time, has forced many businesses to make organizational changes in 2022 to implement effective sustainability strategy and initiatives.

In the long term, investors, clients, and consumers may be less eager to support businesses that do not make sustainable decisions in their processes. Sustainability must be prioritized if the company hopes to stay relevant in the long run.

3. Fraud & Financial Crimes 

As the globe recovered from COVID-19, criminals adapted and took advantage of possibilities. In 2022, supply chains are still disrupted, fraud is rising, ransomware assaults are commonplace, and digital payment systems are still under constant attack. The year also saw an increase in the amount of data breaches.

Among the most frequent outside offenders are hacker groups and organized crime networks. In the past two years, their activity significantly increased. With objectives, rewards, and bonus schemes, organized crime organizations are evolving to become more specialized and professional. Additionally, malicious actors are banding together, which raises the frequency and level of sophistication of attacks. Specialists in data breach, false ID creation, attack methods, and other complex areas may connect, coordinate, and transact inside a developing criminal economy thanks to chat rooms, the dark web, and cryptocurrency.

The use of new technology by businesses is widespread. Digital platforms like social media, services (like ridesharing or accommodation), and e-commerce provide hazards for fraud and economic crime that most businesses are only now starting to recognize. Four out of five businesses that experienced fraud in the past two years have a connection to the digital platforms they use. Undoubtedly, the pandemic increased vulnerability as organizations expedited the shift to digital operations; as a result, 2022 was a year in which many firms placed a high priority on cyber security activities.


In 2023, it is likely that these issues will still persist, but there will also be a new set of priorities. This is a result of the ongoing worldwide economic situation. The effects of high inflation and geopolitical concerns would be further issues of focus in 2023. In the face of unfavorable uncertainty, it is preferable for firms to maintain their flexibility and adaptability. Businesses should make continual infrastructure investments as 2022 draws to a close.


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. 

The function and responsibilities of Treasury go beyond only managing cash today

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Photo by DigitalCFO Asia, during the DigitalCFO Asia Roundtable with Kyriba on 22nd November 2022

The pandemic has already substantially impacted the Treasury and business in general. Many challenges arose from the realities of a treasury staff being able to work remotely, but they weren’t the only ones; it also necessitated a reevaluation of treasury strategy and a study of how things need to be done in this contemporary setting.

Regarding fintech, corporate treasurers have had a difficult year as they deal with new problems, including cash flow, liquidity, and currency volatility. Treasury has duties beyond just managing cash, but providing the CFO with accurate and timely information can be challenging without the right tools and controls. During the DigitalCFO Asia Executive Roundtable – Accelerating Insights, Action and Growth with Digital Treasury Transformation in collaboration with Kyriba on 22nd November 2023, CFOs and finance leaders had an insightful discussion while sharing their treasury process challenges.

Corporate treasurers have experienced a challenging year pertaining to fintech as they deal with new issues related to cash flow, liquidity, and currency volatility. During the roundtable discussion with Shalini Shukla, Consulting Editor at DigitalCFO Asia and Eugene Chua, Head of Treasury, DTOne, they uncover the top 3 Challenges facing the Fintech industry:

  • Cash Visibility
    • Flying Blind: No single source of truth, minimal automation, no connectivity to banks, and concerns for audit and regulatory requirements eclipsed the challenges of posting errors to the wrong accounts. As banks were added, more fees added up.
  • Risks & Fraud Prevention
    • Operational Risk: $40M at risk per month with burdened by manual processes and required one Treasury team FTE to manage cash positions and consolidate transactions; including manual consolidation of 3,000+ transactions per month from emails, and spreadsheets.
  • Payment Automation
    • Massive Growth: DTOne accelerated growth to $620.3M in 2021 from $273.9M in 2017, adding 11 new product offerings. Banking presence consequently increased from 9 countries to 14 countries. Treasury now manages 122 bank accounts with 27 unique banking partners.

In a survey conducted during the session, we found that instant payments are still one of the main priorities and challenges faced by CFOs and the treasury department. Payment networks, commercial banks, and central banks compete to make payments even faster. This is all very beneficial because timing delays in payments and the information they bring with them wreak havoc on cash predictions and liquidity reserves in addition to introducing risk and uncertainty.

Understanding the attendees’ standpoint during the roundtable discussion, we can see below that most organizations are still in the starting phase of finance transformation while some are already in the ongoing and mature phases.

Steps to take in streamlining treasury operations to improve automation and mitigate operational and regulatory risk

  • Full audit to determine the impacts of accelerated growth against the already high operational risk resulting from legacy processes and systems within the finance structure.
  • Appoint a Treasury team to manage the specialized and strategic functions around cash, liquidity and bank transactions during a rapid growth stage.
  • Set up a small 4-person treasury team to solve The Big Problem, and deliver more value-added services.
  • Take an API-first approach to bank connectivity – demonstrating the best practice and innovation that solved the major problems of scalability, financial controls and strategic liquidity management for the company today and in years to come. (Bank connectivity and consolidation of accounts’ views enabled the team to negotiate a uniform fee schedule across a single banking group despite the account location. With a complete and real-time view of cash, DTOne converted idle cash to investment opportunity – yielding $450,000 per year.)

The treasury team’s responsibility is to gather and produce data for budgeting and cash flow statements, among other things. With the use of Kyriba, the team is not only able to grow as the Company does as needed, but the workflow is also more effective and fewer avoidable human errors are made. In essence, the launch of Kyriba will enable the Treasury team to scale up its network of banking partners and accounts to maintain pace with the expansion of DTOne and stay one step ahead of the competition.


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