DCFO Spotlight - Page 10

ACCA and IMA Find Economic Recovery Loses Momentum in Q3 as Higher Prices and Shortages Hold Back Growth

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DigitalCFO Newsroom | 13 October 2021

Global Economic Confidence Falls Most Significantly in North America, According to Survey of Accountants

The latest Global Economic Conditions Survey (GECS) by ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) found that economic growth connected to pandemic recovery weakened in Q3 2021, with confidence falling most significantly in North America, while overall confidence and orders remain at high levels across regions. 

Global confidence fell by nine points in Q3, with the largest fall in North America (-41), followed by Western Europe (-24), pulling down the score. However, both regions are still at relatively high levels of confidence, as is the case globally. In fact, confidence jumped in Asia Pacific (+11) and South Asia (+20), after falls in the previous survey. The Middle East was the only region to record improved confidence for the six months of Q2 and Q3.

The full report is available here, or at https://www.imanet.org/insights-and-trends/global-economic-conditions-survey. 

GECS is the largest regular economic survey of accountants and finance professionals around the world jointly carried out quarterly by IMA and ACCA.

The report found that when looking at orders—which is a useful benchmark to measure real economic activity—there was a split between advanced regions and emerging markets. There were falls in orders affecting North America and Western Europe contrasted with modest improvements in emerging markets.

However, the wider economic prospects in developed economies remain brighter than in emerging markets, where low vaccination rates continue to drag on economic recovery.

Apart from Africa, all major regions are now reporting order levels above their pre-pandemic level, indicating a continued global recovery.

Another positive indication from the survey are the two “fear indices”, which measure concern that customers and suppliers may go out of business. Both declined again in Q3 and are now back in line with their long-run average levels after spiking around Q2 2020.

However, concern about operating costs is now at its highest level since the start of 2019 and increased five points globally in Q3. This is driven by higher transport and commodities costs, leading to higher inflation and weaker growth now.

“A moderation in growth was to be expected, as the pace set earlier this year could not be maintained indefinitely,” said Michael Taylor, chief economist at ACCA. “Although confidence and orders have lost momentum in regions including North America and Western Europe, we are still seeing an encouraging picture of global economic recovery overall.”

“Concerns about extra operating costs for businesses should prove temporary as the price mechanism operates to encourage increased supply and reduced demand,” Taylor continued. “But for now, the effects are to moderate global growth from a rapid to a steady pace. Nevertheless, growth should be sufficient for more economies to regain their pre-pandemic level of activity by the end of the year.”

“Although economic growth has slowed in many regions and the prevalence of the Delta variant of COVID-19 particularly in developed countries expectedly drove down global confidence, underlying demand remains strong,” said Loreal Jiles, vice president of research and thought leadership. “As COVID-19 vaccinations continue to increase and we remedy supply shortages and increased prices in advanced economies, there is an opportunity for overall confidence to increase significantly.”

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global professional body for professional accountants.

The cost of not evolving

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Article attributed to Kabir Shakir, Chief Financial Officer, Tata Communications

Kabir Shakir

CFO for Tata Communications

The global business landscape has been shifting for some time, but last year it accelerated at an unpredictable pace. Today, CFOs have a different role beyond the financial health of the organisation. We are catalysts for change. The CFO is a trusted advisor to the CEO helping in steering business transformation – to help shape their organisation for the future.

One of the biggest challenges is how can you predict and prepare for the future when you don’t know what is around the bend? For example, if you are driving a car and approach a bend at full speed you will crash, but if you drive too slow, you will be overtaken. So, what do you do if you don’t know how to navigate the road ahead at the right speed and take the right approach?

Be a future thinker to be ahead

The recent times have been unprecedented. Standard solutions and the way we look at performance have not always been ideal. But there are lessons we can learn from.

For instance, nearly all of us have been working from home — pretty much for 100% of the time for over a year across the globe. If there is any silver lining to the pandemic, it is that we had the infrastructure to enable this. There has been a rapid shift to the cloud, where software has defined everything, and app-based services have ensured seamless connectivity of people, processes, apps, and devices. Imagine if this pandemic hit us only a decade ago, the world economy would have been significantly impacted as none of this would have been possible.

So, who were the people that made these digital transformation investment decisions five years ago? Without all the facts and figures? Without knowing what would happen?

There is a great example I could give: Pokémon Go, the digital game, became an overnight phenomenon in 2016. I actually had people walking through my front garden to capture these virtual creatures on their phones through the app. The valuation of Nintendo, the franchise owner of Pokemon, went up by almost $7.5 billion in a short span of 48 hours. Despite the fact that Niantic, the American software company created the game and launched it successfully. And the game become a global phenomenon due to the cloud infrastructure Niantic already had in place – all thanks to the future-thinking they made years ago.

Ultimately, it is the decision of the CFO to invest for this unknown turn in the bend. They must develop the knack for steering and accelerating at just the right speed, in blind yet calculated anticipation of what’s coming. The CFO is making decisions today for what can transform a business and not just make it more profitable five years from now but also relevant and future-proof.

Be a catalyst; all innovation is now digital

I now see my peers in the industry evolve their enterprises from working on digital projects to initiating digital programmes and having a fully-fledged digital adoption roadmap encompassing all parts of the organisation. All innovation is now digital. Such as the hotel I stayed at recently, where everything in the room was Wi-Fi enabled and controlled by a tablet – the lights, AC, ceiling fans, room service, and more. I can imagine if manufacturers of physical switches do not evolve, their entire business will be at risk. I won’t be wrong in saying that as a company, we live or die by our digital evolution.

The CFO of a business should be trusted with leading the way. You only have to look at the four quadrants of CFOs we have today – Stewards, Operators, Strategists, and Catalysts. It’s this latter quadrant where the crème de la crème of the top-performing Fortune 500 companies are. They are making the decisions that are shaping the future – and the businesses they help steer are reaping the rewards.

Be disruptive in digital transformation

Having a solid brand is still important today. It should speak on your behalf and offer your brand values in a reliable and consistent manner. Today, a competitor brand will not disrupt your business by offering a 30% price cut – it will be because they have a fundamentally different go-to-market model. There is a CFO behind that. He or she has helped their company to lay down forward-thinking plans. More often than not, it is based on digital transformation.

Customers are crucial of course; they demand better products. You need to be online to deal with this – even if you do not have an online presence, it still affects your business. Take third party rating sites such as Trip Advisor for example, where some customers are reviewing you – and other customers are listening and making decisions that affect your business based on what they read. Your online presence matters more than ever.

You may have a great brand and customer-base, but you also need employees who will go the extra mile to evangelize on your behalf. Potential employees will now judge you on your digital transformation. It started with Bring Your Own Device, but now it is extended to software and usability – the need to consume info where and when they want. CFOs need to help their organisations attract new talent who are demanding this high level of employee experience. They are making the choice to join you based on your digital infrastructure right now.

Be agile and adapt

Today there is often less time and more data muddying the waters. But big decisions are still needed from CFOs. The answer is to fail fast.

Not all trends are successful – who remembers snail-trail beauty treatments? Yet participating in the ones that are a success allows for huge profits, if you are prepared to fail fast by making a few wrong turns along the way.

It is all mostly about agility and the right KPIs. The product lifecycle is shorter, but the mark-ups are potentially greater. CFOs need to be let loose to constantly adapt.

Be ‘Digital-First’ with a digital ecosystem enabler

Organizations who act as a digital ecosystem enabler provide the answer for CFOs. Tata Communications can help create the ecosystem for borderless growth and address challenges – in whatever form they lie. But you need to acknowledge that there is a bend coming and be prepared. We can help you make this happen.

Organisations need a digital-first infrastructure in place. And CFOs, in my view, need to be able to spend a disproportionate amount of their investment budget on digital. You need to be prepared to fail faster. To write off certain projects so that you can reap the rewards of those that don’t.

Future-facing CFOs need to make the decisions which will help their business evolve and be in the best place possible for whatever is ‘beyond the bend’.

Paving the way for payment and procurement workflows

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In an ever-advancing digital landscape, GuocoLand’s Chief Financial Officer (CFO) Andrew Chew sheds light on the risks and benefits of evolving ahead of the curve, rather than at the back of the pack.

Tatiyana Emylia | 8 October 2021

Photo by: Qinthara Fasya

Andrew Chew

Chief Financial Officer for GuocoLand

If it ain’t broke, don’t fix it. The saying seemed to ring true in the built environment sector, where digitalisation appeared incompatible with the labour-intensive nature of this industry—that is, until the pandemic hit. With employees suddenly stuck at home, a number of firms found themselves having to aggressively push for digitalisation in the hopes of resuming construction and maintenance operations. A pioneer on this front, premier regional property company GuocoLand’s CFO, Andrew Chew, spoke with DigitalCFO Asia on the long-overdue evolution and hopes for the coming future.

Evolving as an opportunity rather than a solution

The company had long been exploring avenues to digitalise even before COVID-19 hit as part of their measures towards upscaling. GuocoLand had installed real estate management software to digitalise transactions including invoicing, sending reminders, payments, credit control, and the like. Doing so meant that the company did not need to increase their headcount as they expanded, even after adding a million square feet of additional space under management when Guoco Tower opened in 2016.

Digitalisation means more than cutting costs. When the pandemic hit, there was less disruption to existing processes: most data needed was already uploaded into the cloud, so employees could easily work from home and operate without much troubleshooting. While common fears surrounding digitalisation involve a complete AI takeover, system upgrading instead provides more opportunities for employees to upskill. Staff would also be able to focus on more value-added work rather than having to devote time to mundane tasks and transactions.

Teaching an old dog new tricks

On the flipside, Chew acknowledged the difficulty of digitalisation in the built environment. More than labour, processes involved for development are heavily paper-intensive, with countless regulations to follow and documentation to track. But it also meant that an overhaul for the industry was long overdue. It was when these processes were brought to a halt during the pandemic that became the catalyst for GuocoLand, OCBC, and local fintech Doxa to come together for a strategic partnership announced earlier last month.

The three entities are currently piloting the industry’s first end-to-end digital workflow solution for development projects, named Doxa Connex for Developers. The platform digitally connects all parties involved in these projects, enabling main contractors to virtually issue e-invoices across relevant parties, including architects, consultants, property developers, and finally to banks, to finally issue payments to the main contractor. The pilot program will be in supporting GuocoLand’s luxury freehold condominium project, Meyer Mansion.

If successful, the project could have major implications on how the industry may operate in the coming years: GuocoLand has set their sights on the long-term goal of streamlining the entire procurement and payments workflow process across the built environment value chain, looking perhaps at payments for subcontractors next as well as rolling out the platform across more complicated projects, such as Guoco Midtown. 

Looking forward

For CFOs looking to digitise, it is understandable that most would not want to risk disrupting their workflow amid experimentation. One simple but significant step towards automation would be to implement a robotic process automation (RPA) within the relevant process. This sets up software to automate existing workflows, while ensuring hardly any change to the actual process—all that changes is who operates them, from human labour to digital automation.

The more tedious, but arguably more rewarding method would be to critically examine the company’s processes and changing whatever seems unnecessary. This may involve taking apart certain processes or chains entirely, but ultimately results in a more streamlined workflow.

It is clear that GuocoLand picked the latter.

With RPA, change happens only within the company, but when re-examining old cogs in the machine, firms have the potential to transform existing processes not just internally but as an entire industry as well.

Chew said: “With Doxa, various parties within the process chain are involved and transformed, and that’s ultimately what we’re trying to do here. It’s a small part of a bigger jigsaw puzzle, but an important part too.”

Managing the fine balance in cloud finance management

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Article is attributed to Nathan Besh from Apptio

By Nathan Besh

Senior Director of Product Management (Global) at Apptio, a provider of cloud-based technology business management and IT financial management solutions.

If there was any doubt left, the last 18 months of pandemic have made it abundantly clear that cloud services are essential for business – whether to enable hybrid work, expedite procurement, launch new services and processes faster, expand data protections, or to capitalise from scalable pay-as-you-go pricing structures. It is, hence, not surprising that companies are spoilt for choice in choosing cloud technology offerings. 

So much so that many organizations are not aware of how much money they are spending on cloud computing solutions, missing opportunities to optimize their financial outgoings. The findings raise questions regarding how well businesses are managing their cloud expenditure.

It’s a bitter pill to swallow, but most organisations still struggle to track and manage technology investments effectively – especially with the influx of collaboration apps and other cloud software that companies turned to in response to the COVID-19 pandemic and lockdown measures.

And without visibility, it’s even more difficult to track value-add, the impact on the quality of life of workers, the effectiveness of customer services, and so on.

Incidentally, according to a BCG report, Singapore is one of the most advanced public cloud markets in the APAC region. Investment in the public cloud is expected to grow at a CAGR of 20% over the next five years, from US$1.5 billion in 2018 to about US$3.6 billion in 2023. South East Asia’s healthy mix of global companies and small and medium-sized enterprises (SMEs) presents a significant opportunity for cloud adoption as well.

The Singapore government has also been consistently calling on the small and medium enterprises (SME) to use the public cloud as they cannot afford to invest in servers, storage, and networking gear. Multiple segments of the private sector — including tens of thousands of businesses — continue to benefit from various government digitalisation programmes, which strongly support the adoption of cloud technology.

There isn’t an app for everything

Given the increasing digitalisation of businesses, a vast number of large companies – including banks, media companies, and government agencies – are up to a third iteration of cloud.

Part of the blame lies in the perception that technical solutions are a magic bullet, and were sold as such. However, the root of the problem is that companies continue trying to solve what is (and must be seen as) a behavioural issue – including historic methods for managing spend – with technical solutions. 

Public cloud services represent a new form of computing that involves new ways of acquiring and managing computing resources. Companies should note that certain risks that arise from public cloud usage need to be managed differently from traditional on-premise IT infrastructure risks due to the unique characteristics of public cloud services.

We’ve gotten a bit lazy. When it comes to technology decisions, we want that tool that fixes everything, rather than investing in cultural and behavioural change over an extended period of time and across the whole organisation.

Currently, some of the main questions giving companies headaches include: do we still need all the services we signed up for last year? Have employees subscribed to new apps that were never flagged? What are the human costs and benefits of new investments? How can we create visibility into all spend pertaining to cloud in the long run as business needs change?

Technology – monitoring tools and the like – plays a key part, but understanding ownership costs to avoid cloud cost blow-outs requires analysis of far more than a few monthly bills.

Cloud must become a financial conversation – one focused on cloud cost optimisation (or FinOps) – and backed by tangible investment. Cloud financial management (FinOps) sits at the intersection of engineering, finance, and security.

While it might not seem an ‘ideal’ time to invest in this level of change management, particularly in the context of current economic conditions and operational hurdles, now is probably the least ‘worst’ time to do it.

This is because getting a handle on all costs pertaining to cloud – including infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS)– will only get more complex as IT spend increases.

FinOps practitioners pay for themselves

A critical starting point is how an organisation develops its cloud capability in the first place – an internal analysis of the people, processes and tools needed – whether that’s to support operations, security, or a specific project. More than basic reporting, cloud cost optimisation takes regular cadence upgrades, and the application of processes to cost models.

It’s just as important to establish a broader internal capability – make FinOps someone’s job, or bringing in talent to fill the gap – to bring together business, finance and IT.

How do you find the right capability with a guarantee they know what they’re talking about? That may appear a challenge given the nascency of FinOps in Singapore – it’s only within the last three years that companies have started experimenting – in addition to the limited depth in training in existing university degrees or commercial offerings.

But the advantage of FinOps is that it allows companies to start at a small scale, based around their current needs and anticipated future requirements. That employee needs a financial mindset, with a thorough understanding of the 101s of depreciation, TCO, and budgeting and allocation, as well as the ability to handle and manipulate large data sets. 

The concept of hiring someone to do nothing but FinOps could seem drastic, but with enterprises spending well in excess of $600,000 annually on cloud services, they not only pay for themselves, but become cost management engines.

In creating these roles, companies also create new jobs at a time when the majority of public cloud investment is going towards multinationals. And because these aren’t ‘deep tech’ jobs – they are a blend of technology, finance, and business positions, this opens significant opportunities to non-tech professionals to enter the technology and cloud domain, as well as those at the fringe of traditional technology roles.

As much as heightened technology spend reflects business recovery, in the long-term, a lack of proper cloud investment management will see companies haemorrhage inordinate sums of money as they oversubscribe to apps and services, and often without ever seeing a notable return on their investments despite paying three times: for the initial ‘waste’, to find the problem, and finally to fix it.

With financial mechanisms in place to manage, monitor and report on the value of this fiscal year’s technology budgets, organisations will understand where their operations are succeeding, and where they need to alter their remaining spend.

How has the role of CFOs Evolved through the years?

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Article is attributed to Arijit Das, Field Marketing Manager, SEA for CCG Global

CFO, Chief Financial officer is one role which we assume that we understand completely. Let me help you unravel a few of its branches to attain the importance of this role. CFO’s are playing a major role in a company as they are entitled to manage the entire financial data as well as the operational strategies. The role has its limitations and liberty in each company as it often depends on the structure, size, and processes of the organization. 

So what are the roles and responsibilities performed by Finance Chiefs

To carry out a Role & Responsibility one must carry certain characteristics and qualities. Even for our Finance chiefs, it is a must to have some of the qualities for example CFO’s needs to have a vision and foresight of the financial capabilities of the company, CFOs tell their CEOs what will happen in the future, A holistic view of the overall business, A Results-oriented mindset, Analytic, Data-Driven, Adaptive and also proactive in every action. If we were to talk about areas, it can be said that the modern age CFOs are involved into human resource authorities: 

  • Challenges faced in managing payrolls 
  • Maintaining laws and legal aspects 
  • Developing entrepreneurship and business strategies 
  • Presenting the data visualization 
  • Managing legal, financial, and administrative data

It is needless to say that the financial world has become more high-tech. Therefore, the chief financial officers need to be much skilled and tech-savvy to face the upcoming challenges in this competitive world. 

Do you know how the role has evolved over time ?

The role of the CFO has undergone some significant changes over the years. If we look back almost thirty years ago, we will see that the major role of a CFO was to keep a book or record of the company history, maintain the financial statement, and develop statutory compliance. Now, if you look at the current corporate market, the scenario has been drastically transformed. 

Some of us can predict the probable reason behind such changes in the Role of a Finance Chief. However, we are going to explore some more reasons, which are significantly influencing such evolution. 

In today’s world, accountants and strategists tend to think of some unique methods to capture the market value. It is needless to say that the usage of diversified technologies, i.e, machine learning, Artificial Intelligence, and data analytics, has changed the mindset of the CFOs. You can now assume how competitive this market has become. It is thus quite obvious, the companies have been more likely to hire new talents, who are quite adaptive towards these modern-age technologies. Who doesn’t like to deep dive into the broader exposure, especially, when they have conducted extended market research. 

We must admit that most of the CFO’s area of skillset is based on the broader aspects of the current business market. In this field, they considered first look at the conformance, i.e. conducting extensive research on the

business market that aligns with the legal and regulatory factors. However, one can always consider the stewardship of the organizational assets. 

In this competitive business market, we tend to collaborate with a set of finance chiefs. A set who are skilled, vision to make the team efficient to adapt the new Digital world & can transform the processes into completely digital with Expense Management solutions such as Happay, Esign solution such as DocuSign, ERP solutions such as Oracle, Netsuite and Contract management solution such as Ivalua wherein the finance operation reshapes itself into paperless operation. 

What skillset determines his candidature?

Skills such as managing all kinds of corporate spending, Reimbursements, Petty Cash, Business Expenses, Payments, Cards, Travel, and more are equally important. We have stepped into an Era wherein decision-makers decide with data and digital dashboards. Hence, A chief who can completely create a space for visibility & control of Finance becomes more and more important. In fact, with all these the finance operation reshapes itself into a paperless operation and helps the decision-making in the areas such as policy check, leakages, spillage, and expense records. 

What are the major KPIs of a CFO?

A CFO proactively gets the idea about the Investment planning, Money Management, and Capital Structure of the company. If we have to look at the major duties of the CFO, we can find that they are mainly managing the financial risks, keeping a track of the expenditures, structuring long term financial planning, handling both the taxation, Companies law and contracts, and investment issues. It is quite significantly noticeable that the role of the CFO has been evolving in the last 30 years. 

The KPI dashboard of CFO in the current business market must include the following aspects:

1) Current Ratio 

2) Quick Ratio 

3) Total-Debt-to-Equity-Ratio 

4) Operating Cash Flow1 

5) Working Capital 

6) Per-share earnings 

7) Gross Profit Margin 

8) Return on Equity 

9) Employee Count 

10) Compound average growth ratio 

11) Interest coverage ratio

These KPIs are the specific subcategory of the financial KPIs. These are quite helpful for a CFO to make fruitful & profitable decisions regarding the company’s financial data to drive towards the right direction. CFO takes care of these areas and presents a clear outlook to drive benefits in the future. Moreover, it helps in measuring the associated risks as well the future growth possibilities. 

What influence does a CFO have in organisational performance? 

4 ways to define 

  • Converting information into strategic insights 
  • Strategy Commercialization 
  • Alignment of Realistic Strategies with the business Decision making process ❖ Improvement of the decision making quality by developing a structured scenario planning strategy

So what additional responsibilities does a CFO perform ? 

Not only these but with time CFOs are also responsible for stabilizing the Bottom Line.. What do you often look for when you think of reducing the costs? Of course, the best procurement team secures the bottom line costs. During this pandemic situation, many of the companies have tried to do so. They were simply cutting down the operational costs. But, have you ever thought of saving the costs when the suppliers were unreachable, non active suppliers during a lockdown? 

With the help of the organic database and strong bonding with the suppliers, the current business marketers such as Consus have been able to drive such initiatives. It enables the process to provide sourcing-as-a-service when the internal team feels an urge to develop their capabilities in a specific area. In general, it can be stated that the delivery model is that of co-sourcing, where the internal operations bring the process and category

knowledge to bear, whilst relying on the local market intelligence of the in-house team to execute each market/sourcing engagement. 

Many of the procurement or financial companies deal with the complete Source-to-Pay solution, yet flourishes in the market of Standalone-Services. This service can be controlled manually or using advanced technologies. 

What benefits CFOs bring to an organization? 

Now, you must be thinking what are the major benefits CFO or the team has been receiving right? Just have a quick look at these following welfares: 

  • Predictable Implementation Cost 
  • Standard Reporting Across all Subject areas 
  • Robust Visibility Model tailored for your organization 
  • Role-based security and Secure Data Access 
  • The maximum profit on ROI 
  • Get rid of the complexity and risks 

You can compare the CFOs with the procurement heads who are constantly fighting to get the best service out of the system. One can say the CFO is the one who maneuvers the ship but Procurement will always sail the ship in the best direction. In a nutshell, if you see CFO’s are thriving to act as a driving force to such digital transformation. These cost initiatives have not only helped in flourishing the financial market, but these have also made the businesses more agile and adaptive towards challenges. So if you are the one heading the Finance don’t forget to look for opportunities to contribute and experience in these areas as the Role and Headhunters have been looking for the same. 

In a candid conversation, one of the Industry Leaders added 

“In the past, CFOs were challenged with turning the numbers into something meaningful, deriving insights, and delivering information to the rest of the organization with lots of integrity, flexibility, and speed. Today as a leader, CFO’s emphasize managing risk ( VUCA world), driving performance, and forward-looking to steer into the Future. All in all CFO (he/she) emerges as the first port of call for CEOs for advice and direction.” – 

Ravi Gosala, CFO(CPET) Indorama Ventures PCL, Thailand 

Is he running the SHIP? 

All of us need to gather some basic ideas about the efforts a CFO and a CPO have been providing to drive the company’s financial position. Do you know the procurement process is most likely quite a hard process considering the several moving parts? It is thus necessary to equip the business with the most suitable tools for maximizing the values and priorities. Here are some of the areas, which are benefited by the CFOs and CPOs 

❖ Alignment of the procurement with the business strategic procedure

CFO and CPO ensure to drive the procurement service by presenting a clear and concise outlet that gives the idea about the possible risks and potentiality of the business on a competitive ground. CPOs need to work with the CFOs for developing a balanced procurement performance scorecard. CPOs are positioned to influence the control suppliers who generally deliver strategic insight to the business CEO. 

❖ Optimization of the working capital 

When the procurement team works directly with the suppliers, they usually influence the strategic procurement process by managing associated working capital. The CFO can then present accurate cash flow information by negotiating advantageous payments and managing the stock levels. 

More Contribution to be taken into Consideration: 

During any crisis situation, the CFO’s voice plays quite a critical role. But, it is a CPO who contributes directly to a firm’s resilience. It also has a strategic role in leading the business through the tough times ahead. Thus, it can be stated that in order to ensure better management of crucial situations, a close and coordinated relationship must be created between the CFOs and CPOs. 

Without the leadership of a CFO, performance efforts will lack a meaningful benchmark to bring success to the organisation. Managers will be tempted to focus on projects that are clearly visible instead of those that promise the highest value. This is why, while planning transformations, CFOs play the broader role in modelling desired mindsets and behaviour while transforming the finance functions. 

Conclusion 

Hence, it can be stated that the contribution of the CFO and CPO are much commendable in terms of managing the organisational performance. Moreover, managing these specific financial areas help the company to drive the ship towards the positive direction where it can ensure the strategic position in a highly competitive market. So, on a concluding note, the combined effort of the CPO, CEO, and CFOs.

How Finance Functions can harness Automation and other emerging tech to deliver greater value to the business

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Qinthara Fasya | 29 September 2021

Mark Billington

Managing Director International, ICAEW

Finance functions across sectors have developed and adapted in response to an increasingly digitalized environment. The ongoing Covid-19 epidemic, as well as the increase of remote working, have hastened this change, emphasizing the necessity of new skill sets for accounting and financial professionals looking to further their careers.

Boards and senior management are increasingly expecting finance divisions to use digital technology to improve operational efficiency and reduce time spent on low-value activities. Automation is a critical tool in achieving this aim, and it has been prioritized. Finance teams utilize the technology extensively in areas such as journal processing, reconciliations, and typical help-desk enquiries, and it may enhance efficiency in month-end or quarter-end closings and all associated procedures. DigitalCFO Asia spoke with Mark Billington, Managing Director International, ICAEW, who shared more on what is required to make this change including steps to change culture, behavior, and leadership mindset.

The Evolvement of Finance Functions

The first wave of change follow transition to a remote-first environment as countries entered lockdown. Making sure that employees had access to an electronic workflow process in an audit-proof document management system was key for many businesses to help them review and approve invoices and other business transactions in a secure manner. Agile reporting and forecasting of finances became a critical tool for organisations to manage their cost flow and tighten their bottom lines amid increasing uncertainty and rapidly changing environments. 

The second wave followed when consumers settled down into a new digital norm and businesses had to evaluate not only how to sustain their business but also, how to innovate to keep pace with customers who look forward to seamless digital experiences. Across industries, businesses had to rethink how to digitalise their core internal operations such as production and R&D to interactions in supply chains to make sure they were creating long-term, instead of simply tactical changes. To support this transformation, finance functions were also pushed to adopt new processes, interpret and apply data to solve priority business challenges.

Finance automation goes hand-in-hand with wider efforts to digitalise finance operations. As paper-based processes are replaced with technology, the need for tedious, manual work diminishes. This simplifies the back-end processes for businesses and help them design in a new and more efficient way.

Automation can also lead to improved controls and compliance. In scenarios where large companies are conducting millions or even billions of transactions a month, automation can provide faster data – a growing demand from regulators- while reducing the margin for errors.

For example, Johnson & Johnson implemented Robotic Process Automation (RPA) with a goal of automating aspects of intercompany requests, invoice creation and postings. What started out as a pilot became a long-term process when the company saw improvements in its workflow and processes such as being able to handle a volume of transactions in an accurate manner and impact on staff resource who could focus on high level operations. 

Leveraging Automation & Emerging Technologies (AI, Blockchain & Data Analytics)

The introduction of technologies like artificial intelligence and data analytics has brought about many opportunities to improve efficiency, provide greater insight and deliver more value to the business, for example through being able to work with: 

  • Large data volumes –AI can process huge amounts of data (structured and unstructured) – much more than humans ever could; for example, the results of every piece of medical research carried out on a topic, or every piece of financial regulation. This provides a powerful basis for learning. 
  • Complex and changing patterns – It can also be critical in helping businesses pick up anomalies where it may be difficult for the human eye to detect. Where feedback loops can be built into the models, they can also be highly adaptive and learn from errors or new cases.
  • Consistency – AI can help manage work that may be more mundane, enabling finance professionals to innovate and deliver meaningful work like how to better connect digitally with their customers.

Successful finance transformation projects require a sensitive process with workload and management implications. For that reason, businesses should make sure that this is led by experienced and qualified staff. Indeed, many businesses are grappling with the challenge of finding, nurturing, deploying, and retaining the right blend of talent to allow finance to thrive in the digital future.

This makes it more critical for CFOs to act now to identify the skills needed in the short, medium, and longer terms, and plug any existing or predicted knowledge gaps by up-skilling existing team members or through wider recruitment policies within and outside the organisation.

In building up their dream team, business leaders might also want to consider appointing sub-project leads for individual streams within the local teams to enrich their understanding of the project and give the project stability. 

At the core, changing the culture through communication regarding the importance of transformation and embedding technologies like AI and automation is key. Finance leadership can help align the objectives of the transformation to the culture by taking concrete steps such as agreeing to service level agreement and taking time to actively listen to feedback across cross-functional teams.

As finance talent models evolve rapidly, a premium is placed on data scientists, business analysts and “storytellers”, who can communicate in an engaging way about what data means for real people in the real world. 

Core skills for the digital future will include data intuition skills to identify and understand what is important and significant from the numerous outputs and data communication and visualisation for finance professionals to describe their conclusions to technical and non-technical colleagues.

To translate their technical know-how to business value, finance professionals should also act as the intermediary and build trusted relationships with the wider business and data scientists, communicate with clarity, instigate breakthrough conversations, and bring together cross-functional teams to support data-driven decision making.

Sick of WFH? Check out these flexible Co-working platforms

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Qinthara Fasya | 27 September 2021

Who knew Singapore had so many co-working spaces at various accessible locations?

In this tiny red dot, who would’ve thought Singapore had flexible co-working spaces widespread all around the island? According to Edgeprop, there are over 200 flexible workspaces and hot desks in Singapore, with about 100 operators. With working from home being the default due to the Covid-19 pandemic since 2020, many of us are itching to step out of our mini home offices to experience a different working ambience.

Fret not, DigitalCFO Asia’s got your back if you’d like a different atmosphere than home. In 2021, options for remote working have increased, varying from office buildings, shopping malls and even hotels. Most of these co-working spaces accommodate 1-2 pax, in-line with the current Covid-19 Phase 2 Heightened Alert measures at the time this article is posted. Working in a pleasant setting does not have to be expensive, therefore we’ve prioritized our options based on affordability.

For this feature, we’ll be selecting co-working spaces from interesting co-working platforms such as MultiCo and Switch. 

Switch is the world’s first on-demand workplace platform that aims to increase productivity by providing access to workplaces around the city. Switch Members may check in and out of workplaces on a pay-per-minute basis with only two clicks in the Switch app. Founded during the Covid-19 pandemic, MultiCo transforms remote work by bringing desk workers and venues together, in a mutually beneficial pairing. Part of the sharing economy, the concept was inspired by a combination of factors including the limitations of the coworking industry, those who were working full-time from home, and the suffering hospitality industry.

Price Range Legend:

$ – Very Affordable

$$ – Average 

$$$ – Slightly Pricey

$$$$ – Costly

JustCo (Multiple Locations)

Price Range: $

Photo from www.justcoglobal.com

First up, we have JustCo, offering premium co-working spaces at multiple locations in Singapore. JustCo believes that the future of work will be driven by technology, comprising a hybrid of different workspace formats to empower businesses to determine where, when and how they work. JustCo’s smart workplaces reinvents coworking by providing maximum flexibility for the ever-changing business climate.

Their co-working spaces in Singapore also feature hot desking, printing facilities, in-house entertainment and mail handling services to support your business needs.

See a full list of JustCo’s locations here. 

JustCo offers multiple monthly plans for individual use and even private offices for team use as well. With Switch, you could work comfortably at various JustCo locations at just $3.60 per hour. 

Crane Club

Price Range: $

Photo from https://map.multico.co/place/crane-club/

Crane is a members-only club located at the Herencia on Kim Yam Road, a few hundred meters from Roberston Quay, but as a MultiCo member, you don’t need to join to take advantage of this appealing boho-industrial space that hosts co-working facilities, workshop spaces, counselling services, and opportunities for networking, business development, and lifelong learning.

Amenities include hot decking spaces, coffee and tea, power plugs, as well as wi-fi. This coworking space is great for those who needs to get some serious work done, while focusing on self-care and holistic wellness.

Crane’s membership starts from as low as $45/month and $20/day as a MultiCo member. 

Changi Lounge

Price Range: $$

Photo from Switch

Want to escape the typical workspaces you’ve been going to? Check out this workspace area at Changi Lounge!

Changi Lounge provides an exclusive and comfortable environment where you can rest and relax – with Jewel’s range of exciting attractions and lifestyle offerings right at the doorstep for your exploration. For those looking for a tranquil environment to work or study, the lounge provides high-speed internet connectivity, ample charging and power points for devices as well as, meeting rooms with video conferencing facilities.

With Switch, you could work at Changi Lounge at just $7.20 per hour.

Co. @ Duxton

Price range: $$

Photo from Switch

It’s all about the aesthetics here at Co. @ Duxton. 

A revivifying interpretation of the local community centre (or more affectionately, CC), the goal is to bring diverse people together in a warm and supportive space while inciting new perspectives through art, wellness, food and drinks.

A shophouse nestled in the heart of Singapore’s most culturally alluring neighbourhoods, the Co. takes pride in providing a warm and supportive space in which to work and host dynamic programmes towards sparking conversations and broadening horizons.

Co.’s membership starts from $45 for a day pass, $200 for a week, and an affordable $350 per month. 

Crosscoop

Price Range: $$$

Photo from Switch

Present in Asian cities such as Tokyo (Japan), Singapore, Bangkok (Thailand), Jakarta (Indonesia), Delhi (India), Ho Chi Minh City (Vietnam) and Manila (Philippines), CROSSCOOP provides premium quality Serviced Office staffed by multi-lingual employees. For more than 10 years since its founding, our Serviced Office in Tokyo has supported many companies during their development stage with premium Japanese hospitality.

Through Switch, you can work at this location for just $7.20 per hour.

Treehaus

Price Range: $$$

Photo from MultiCo

This particular one resonates such positive energy, with bright colours and comfortable working areas with multiple seating choices.

Trehaus caters to working parents of young children who want to pursue their career dreams while still prioritising family. It’s the first flexible workspace in Singapore with a creche. The creche is run by loving and nurturing caregivers so you can work in peace knowing your little one is in good hands just steps away from you.

With MultiCo, you can work at this location for $30 per day. 

Clove, Swisshotel Stamford

Price Range: $$$$

Photo from MultiCo

If you want that “atas” and luxurious feel, this may just be the spot for you.

CLOVE has got to be the smartest burger restaurant in Singapore, having recently reopened with a more casual concept – Burgers & Shakers – serving a collection of handcrafted burgers balanced by plenty of plant-based protein options as well and thick, creamy shakes, floats and concretes. Other attractions are craft beers, an opulent sweet trolley, and seating for up to 200 people in a bright, airy space. If you are looking for a workspace with natural daylight, Clove at Swisshotel Stamford is the place for you.

With the rising Covid-19 cases in recent weeks here in Singapore, do keep in mind the social distancing and safety measures put in place at each of these locations. With a wide array of co-working locations we’ve listed here, never run out of options again when it comes to finding a comfortable place to accompany your stressful work days. 

How HPC and AI are Transforming the Finance Industry

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Qinthara Fasya | 22 September 2021

Sinisa Nikolic

Director and Segment leader of HPC & AI at Lenovo ISG, APAC

As a result of the pandemic, financial institutions, like many other organizations, have definitely expedited a number of digitalization initiatives. Tech solutions have helped to sustain operations and keep things moving, whether it is to assist their employees or to guarantee they can continue to serve consumers. For example, customer interaction in Singapore’s mobile banking apps increased by 17 percent last year.

However, beyond temporary solutions to ensure business continuity, solutions such as artificial intelligence and high-performance computing (HPC) enable financial institutions to further streamline and automate processes, improve data management and utilization, and ultimately enjoy efficiencies and build resilience to weather future storms. DigitalCFO Asia spoke with Sinisa Nikolic, Director and Segment leader of HPC & AI at Lenovo ISG, APAC, on how tech such as Artificial Intelligence and High Performance Computing can support financial institutions beyond COVID-19.

Technology Trends demonstrated by Financial Institutions

While traditional systems have worked well in the past, rapidly evolving industry needs mean that financial services must adapt their processes accordingly or risk falling behind. Promisingly, the industry has witnessed a continued and aggressive focus on digitalisation and the adoption of new and emerging technologies to enjoy operational efficiencies, enhance speed-to-market, and deliver superior customer experiences. As online and mobile banking continue to increase in usage, we’ve seen banks reduce spending on physical branches, choosing instead to invest in tech solutions such as self-service digital channels. 

More players in the finance industry, including “traditional banks” are now moving away from outdated, legacy systems to data-driven technologies such as cloud, artificial intelligence (AI) and machine learning. Financial institutions have increasingly recognised that data is the new currency and by leveraging hybrid infrastructure environments that are easily accessible, scalable, and secure, they are able to better store, manage, and utilise their data – building resilience and driving innovation. 

Apart from meeting customer needs, tech has also been influencing the way people in the financial services sector work. To maintain operations and keep things moving, businesses have embraced tech solutions like Virtual Desktop Infrastructure (VDI) that provide both flexibility and security – which is extremely critical for those working in this sector. In Singapore, incumbents like DBS and UOB have even implemented flexible work arrangements that are set to continue beyond COVID-19. This transition to hybrid models of work has no doubt been underpinned by tech and we’ve seen greater demand for IT services like VDI and software-defined infrastructure (SDI).

It is clear that the use of technology is the way forward for banks, but financial institutions face some barriers to growth and sustained tech innovation. One of the biggest obstacles standing in their way is this dependence on legacy systems. As a largely traditional industry more conscious of risks, banking and finance is not known to be as agile as other sectors; since implementing new tech often requires experimentation and brings with it uncertainty. However, with the pandemic as a catalyst, many banks have started exploring partnerships with fintech companies to drive new ways of doing digital business. Once seen as fierce competitors filling the void created by ‘staid’ banks, these fintech partnerships have encouraged agility, supporting banks as they deploy new and innovative technology focused on products and services.

Meanwhile, technologies such as blockchain are a catalyst of change, shining a light on the conventional economic value offered by the banking industry. Blockchain is shaking up the foundations of traditional business models with peer-to-peer lending, smart contracts, digital payments, and eliminating intermediaries to speed up underlying processes. With its still unrealised potential, blockchain is expected to save as much as US$20 billion annually by 2022 with the replacement of legacy systems and infrastructure. 

The financial services sector is one of the most regulated industries in the world; these new regulatory requirements and data protection laws are putting additional strains on already-stretched resources. Adding to that, an increase in online activity, digital transactions and processes have naturally resulted in exponential growth in the volume of data being generated. As banks and other institutions contend with storing, managing, and securing all this information, they must also be able to flexibly address rising complexity and adhere to ever-developing industry rules. Without the right technology in place to provide support, be it emerging tech like AI and robotics, or heavy-duty servers and cloud environments, financial firms will find it challenging to be agile and respond to their changing data needs and demands.  

In addition to these concerns, financial services have to consider the amount of investment required to implement new systems or overhaul their existing infrastructure. Recognising the need to balance costs and manage their expenses, subscription-based consumption models like our Lenovo TruScale allow customers to use and pay for data centre hardware and services without having to purchase the equipment. Our priority is not just to help customers address the current challenges they face, but to also encourage a long-term and strategic approach by supporting them in preparing for their future needs and growth.

Artificial Intelligence & High-Performance Computing

With HPC and AI helping financial services derive insights and make better use of their data, businesses can enhance customer experience and increase competitiveness. For example, hyper-personalisation is a growing trend among banks especially as Generation Z grows into a larger customer segment. This segment expects individualised services instead of one-size-fits-all products. Banks must incorporate more personalisation into their offerings to appeal to and secure loyalty from this group of customers. Be it basing recommendations on past purchases of financial plans, considering customer behaviour, risk profiles, or future life stages and goals, by analysing customer data with AI, financial institutions can help customers plan and design their own suite of banking products (for e.g., investment portfolios, credit cards, or insurance plans) that best suit their circumstances and meets their needs.    

Let’s not forget that always-on fraud detection is a requirement for day-to-day business in the financial services world. Advanced technology can play an integral role in monitoring and detection. By deploying algorithms and machine learning, AI solutions can improve security and prevention – be it by verifying identities of customers or discovering and stopping unusual and potentially fraudulent transfers from being completed. Insurance companies can also rely on AI systems to spot suspicious requests for compensation based on comparisons against historical patterns of prior legitimate claims. With countless transactions flowing online at any one time, these algorithms are crucial to minimising fraud and ensuring payments are protected, all without compromising on speed or efficiency. It’s no wonder why global credit card companies are already leveraging machine-learning solutions that run on HPC systems. With the ability to process millions of transactions each hour while applying a million different rules of examination, companies can almost instantaneously spot and halt fraudulent transactions with no disruptions or delays.

The Ashika Group is one of India’s leading financial services providers that has successfully transformed by swapping its legacy data centre infrastructure for a hyperconverged solution from Lenovo and Nutanix. Offering a suite of products across currency trading to investment banking, Ashika Group’s IT infrastructure supports the entire operation, making reliability an utmost priority. With its traditional systems resulting in unplanned downtime and disruptions, The Ashika Group turned to a solution that gives it flexibility and scalability, without compromising on compute power. By replacing 30 individual servers and storage devices with only 3 nodes, the business significantly reduced physical footprint, and has enjoyed easier maintenance and management. Since implementation, they no longer face unplanned downtime and also benefit from faster rebooting of applications – empowering the business to provide better service to their clients. 

In-Solutions Global Ltd, a leading payment service provider has embraced super-scalable hyperconverged infrastructure to support growing demand for digital payments. With the rise of cashless transactions and e-commerce, the company needed a flexible solution to address varying transaction volumes. With the Lenovo ThinkAgile HX series, response time has been improved and transaction success rates have increased. But more importantly, adjusting capacity is simple and can be done without incurring any downtime. This allows In-Solutions Global to conveniently allocate resources accordingly and puts it in a good position to meet rising demand as the business continues to grow.

Will AI reduce finance operations positions in the future?

The only certainty in life is that ‘things change’ and while it’s likely that certain roles will be reduced, this can lead to the creation of new, higher-value positions. AI’s job is to augment and complement the human workforce, not to make humans obsolete. Many banks are already experimenting with various use cases of AI in their operations. When deployed effectively, the use of automated robots or chatbots for example, takes care of basic and routine tasks, freeing people to drive innovation, be creative, and spend their time on more complex interactions. Even critical functions like regulatory compliance can benefit – with machine-learning bots automatically extracting and aggregating data from various sources, quickly reconciling numbers, and generating the necessary documents for auditing processes. By replacing labour-intensive and manual workflows with reliable, cost-efficient, and fast robotic operations, banks can increasingly move to the Edge, bringing banking services even closer to the customers themselves.   

While the use of AI can alleviate bottlenecks and improve efficiency, there are other aspects that only humans are capable of. For example, customer loyalty is still largely based on trust and relationships, and human employees provide emotional connection and empathy that technology cannot. Without emotional intelligence and contextual ability, AI has its own limitations. As such, we will continue to work closely hand in hand – with AI supporting and speeding up processes, and humans providing the context and analysis.  

COVID-19 has acted as a catalyst, causing firms to re-evaluate their existing infrastructure, such as server capacity and data storage. However, as we look forward to recovery and long-term success, it is obvious that those that move beyond surface-level implementations and instead adopt end-to-end digitalization skills will have a larger competitive edge in the future.

Cristiano Ronaldo’s surprise comeback to Manchester United – Who benefits the most?

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Ryan Kwa | 1 September 2021

TeamViewer stands to get all of the marketing power of the Cristiano Ronaldo brand

without having to invest a single more marketing dollar.

TeamViewer AG, a German software company, stands to benefit the most from Cristiano Ronaldo’s unexpected comeback to Manchester United.

As the dust settles on Cristiano Ronaldo’s shocking return to Manchester United, one particular sponsor stands to gain the most out of this from a branding & marketing perspective. TeamViewer AG, a German software company / tech unicorn, has recently agreed to a £235 million shirt sponsorship with Manchester United back in March 2021. TeamViewer stands to reach out to a whopping 1.1 billion Manchester United supporters across the world by having its logo on the front of the most famous shirt in sports. This is all before Cristiano’s comeback.

With the most number of followers on Instagram (334 million) and 5th highest on Twitter (93.6 million), Cristiano Ronaldo is the most marketable athlete in the world. Hookit estimates that Ronaldo produces close to 1 billion in marketing value for sponsors on social media. 

When Ronaldo wears the renowned red shirt with the TeamViewer emblem right in front, TeamViewer stands to get all of the marketing power of the Cristiano Ronaldo brand without having to invest a single more marketing dollar.

Founded in 2005, TeamViewer is an international technology company headquartered in Goppingen, Germany. TeamViewer offers a global platform for connecting, monitoring and controlling of computers, machines and other devices. It focuses on cloud-based technologies to enable online remote support and collaboration. With the COVID-19 pandemic placing greater emphasis on remote working, businesses and individuals now require remote desktop support, remote access and worldwide connectivity. With a wide range of products and services, TeamViewer is well-positioned to be at the forefront offering these innovations. 

When data is king, how should CFOs lead?

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Diana Spalding, Head of Applications, Oracle Singapore | 30 Aug 2021

Diana Spalding

Head of Applications, Oracle Singapore

To be prepared for constant change, every business needs the one asset that can provide them the flexibility to pivot: good data. 

The problem with data is accountability. Data needs to be valid, accurate, reliable, and available. Good data has been part of finance teams’ bread and butter, helping stakeholders relate better to financial performance or make data-driven decisions. With more lines of business and external stakeholders relying on good financial data, finance has to step up.

A research done by IDC revealed that data and analytics solutions revenue in the Asia-Pacific region was estimated at USD$22.6 billion in 2020. In fact, even with financial regulatory authorities such as the Monetary Authority of Singapore, we see data analytics used to combat money laundering and financing of terrorism. Finance teams rely heavily on the cloud for analytics and insights, to balance numbers with strategy to generate the results stakeholders desire. By leading with data, CFOs can help ensure the rest of the organization isn’t overwhelmed by the data. 

A new dawn for data

Undeniably, data decides business success – provided businesses have the means to analyse and understand it. 

This task now increasingly falls to Finance. Data has always been important to the Chief Financial Officer’s (CFO) role, with every decision they make based on and justified using data. Yet, their job no longer focuses on the preparation and maintenance of it – not when there is a bevy of automated tools to cleanse data, and often data teams responsible for it. 

Instead, the emerging role of the finance team is to interrogate, interpret and exploit data for the rest of the business. As business units are most likely to invest in analytics, according to Deloitte, finance leaders use data to understand and monitor business performance in real time, making them more reliable and informed decision makers. The CFO is not only recognized as the right hand of the CEO, but he is also a trusted advisor and collaborator for every part of the business – from Human Resource to customer experience. 

The stark difference now, with how finance teams use data, is that they’re obliged to source it more widely, from every corner of the business. However, there’s a big difference between the ownership of data and the stewardship of data. Yes, one department – such as marketing – may have generated huge quantities of valuable customer information, but if that data looks different and can’t be accessed or understood by others, it’s no use. That’s why data needs to sit in one team’s domain, so one team can interpret that data for the good of the whole business. 

However, technical and political reasons make handing the reins over to finance team complicated. Data must be easily available and in order. However, most organizations are a complex patchwork of legacy data environments, hastily stitched, lacking overarching data strategy. Data hygiene is a recent invention, and for many companies, a possibility that it has never existed. These technical bottlenecks can make data stewardship achievement difficult. 

There can also be resistance from other departments within a business. Most executives understand that data is power and it’s what gives their department its value to the business. But this can make them reluctant to share data with other business functions – a byproduct where businesses lack a coherent data strategy or executives aren’t shown the bigger picture. Other resistance includes non-compliance and slow adherence to data policies, but the outcome is always the same – Finance struggles to get the data it needs. 

The tools of the trade

To overcome these obstacles, data strategy is key. CFOs need to figure out what data is most important to the business and what it needs to do with it. It’s also equally critical to ensure that the right skills are there. Data analysts will offer the most value gain from data – a gap possibly filled through new hires and upskilling across the business. 

The lesson is this: have the governance, reporting requirements and right people in place first before you attempt to exploit the data. 

Younger startups have a big advantage over established businesses. It’s easier to build a data strategy over infrastructure when you’re starting from scratch. Yet, introducing new data strategy and building a new data infrastructure remains necessary. It needs to be done concurrently while running the old systems in parallel to maintain service continuity. Upon migration of vital data and workloads to the new data infrastructure, these legacy systems can then be shut down.

For instance, a leading provider of semiconductor and electronic assembly solutions serving various global markets from automotive, communications to consumer and industrial markets. Kulicke & Soffa (K&S) was keen to move their back office and customer facing applications to the cloud for scalability and easy access to support their strong growth trajectory. In order to facilitate seamless functionality across their finance, human resource, supply chain and customer experience, K&S leveraged Oracle Fusion Cloud Applications. 

Under Oracle Cloud, K&S will have access to unified project planning, budgeting, and execution across 18 countries, leading to better business agility across finance, manufacturing, operations, customer experience and human capital management. The business is also able to make more data-driven decisions to accelerate its growth.

The cloud must be the central ‘brain’, connected to all data environments through a digital nervous system. Finance has easy access to abundant data sources through the cloud, and the latest tools for keeping that data clean and properly managed. Of course, these benefits aren’t solely restricted to the CFO and their team – all departments should have similar access. As the number of applications needed to run a successful business grows exponentially, the cloud takes on this role, freeing up employees to focus on the decisions that will grow the business. 

Finance at the helm

With Finance at the helm, a company’s data is in good hands. CFOs and their teams have the objectivity, experience and ethical code to be the ideal data stewards – which in turn makes them a real force for good within their companies. The next step is to get the right tools and understand the strategies they need to build an organization that’s truly data-driven. 

A cloud-based infrastructure that is built off the back of a watertight data strategy – one that’s there from the very beginning – offers an unrivalled breadth of insight and the tools needed to realize data’s true potential. Only then can data become the common currency by which business success is measured.

Two Thirds of Organisations Still Use Manual Search for Compliance with Trade and Export Controls

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By: DigitalCFO Newsroom | 27 Aug 2021, Friday

Latest Survey Reveals Contrasts in How Global Banks, Corporations and Non-Banking Financial Institutions Manage Trade and Export Compliance

Accuity, a LexisNexis® Risk Solutions company

Two-thirds of banks, corporations and non-banking financial institutions (NBFIs) still use search engines to comply with trade and export compliance regulations, according to Accuity, a LexisNexis® Risk Solutions company and a leading global provider of financial crime screening, payment services and know your customer (KYC) solutions. Manual search leaves organisations open to missing red flags and making misinformed decisions over whether to accept business. This can expose them to risk and potential regulatory action and may also result in missed opportunities to participate in safe and legitimate trade transactions.

Trade finance providers, as well as insurers, logistics firms and others involved in international supply chains are responsible for conducting due diligence on the parties and items involved in the transactions and shipments they facilitate. This includes verifying the legitimacy of the customer and all parties to the transaction, checking for dual-use or controlled goods (for example, those that could have a military purpose) and ensuring funds and goods are not going to or coming from a sanctioned location.

The trade compliance survey – conducted by Accuity during the first half of 2021 – questioned more than 120 professionals from leading banks, insurance and fintech organisations operating in APAC, EMEA and the Americas. The study shows how widespread manual search remains even years after the emergence of automated solutions to detect trade compliance risks, such as sanctioned entities and dual-use goods.

Key findings from the research:

  • Trade compliance is not always handled by a dedicated team: Banks are managing trade compliance mostly through a dedicated compliance function. Non-banking financial institutions (NBFIs) are handling it as part of the KYC process and corporations as part of a central compliance function or general operational team.
  • Multi-variable screening is mostly limited to banks: More than 90% of banks screen for five or more data points, including sanctions, goods, vessel names and ultimate beneficial owners (UBOs), compared to only a third of non-banks.
  • Challenges posed by changing regulation: The biggest challenges for banks and corporations are keeping up with rapidly changing regulations and increasing expectations, while NBFIs find document-heavy processes the biggest burden.
  • Efficiency gains planned: 60% of firms revealed that they plan to invest in the integration/interconnectivity of systems, with 74% looking to improve data sharing and transparency.
  • Compliance as an advantage: Competitive advantage is seen as the main benefit of trade compliance. Corporations reported less concern over fines, while prioritising improving the flow of business through smarter licence management.

Accuity customer Enas Hamed, Sanctions Unit Head at the Housing Bank for Trade and Finance in Jordan, said, “We have prioritised digitising and automating our process for screening trade finance transactions against local and international sanctions lists. In doing so, the bank increases its efficiency levels by cutting down on time spent processing and screening potential transactions manually, while simultaneously allowing for a clear audit trail and increased effectiveness in its dealings with both regulatory bodies and its customers.”

Aneta Klosek, director, trade compliance, at Accuity said, “Trade compliance is a critical function where mistakes can cost businesses millions. An area where the smallest omission can throw off the entire strategy of a business is no place to take a chance. On the other hand, the study has shown that getting trade compliance right can produce a significant competitive advantage, so there is every reason for firms across the breadth of the supply chain to make this a focus. We are seeing more banks and other organisations turn to comprehensive data and technology-enabled solutions to ensure their compliance framework is absolutely watertight – and they have flourished throughout the pandemic as a result.”

Download the infographic to view the full survey results: How Companies are Tackling Trade Compliance.

To learn more about the issues surrounding trade and export compliance, download the new Accuity Whitepaper – Trade, Trafficking and Technology: The Ongoing Fight Against Financial Crime.

Accuity, a LexisNexis Risk Solutions company, powers compliant and assured client transactions to help build an interconnected and trusted financial ecosystem. Our financial crime screening, payment services, and benefits compliance solutions help enable financial inclusion while identifying criminal activity and fraudulent players. With deep expertise and industry-leading data and analytics solutions from the Firco and Bankers Almanac brands, Accuity provides unmatched confidence, efficiency, and compliance for customers around the world. Part of RELX, a global provider of information-based analytics and decision tools for professional and business customers, Accuity has been delivering solutions to banks and businesses worldwide for 180 years.

Walking a mile in customers’ shoes through experience mapping

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John Yang, Vice President APAC of Progress elucidates understanding the customer’s perspective as an imperative first step towards enhancing customer experience in the ever-evolving digital age

Tatiyana Emylia, DigitalCFO Asia | 20 August 2021

Stuck within the four walls of their own homes, many consumers shifted their attention to the internet—whether it was for remote working, entertainment, or making purchases—to while away the hours during the peak of the pandemic. COVID-19 and its ensuing lockdowns led to a surge of digitally-savvy customers who demand easy and effortless online transactions long after the pandemic subsides.

Where consumers of all ages have found that the internet has streamlined most of their daily routines, now more than ever, businesses need to possess a robust digital platform to meet such expectations. John Yang, Vice President APAC at Progress, spoke with DigitalCFO Asia on how firms can enhance their customers’ experience with the aid of technology and crunching some numbers.

Through the eyes of the customer

John shared the two tools that should be at any company’s disposal when it comes to understanding their consumers: customer journey and experience mapping. Though often used interchangeably, the two provide different outcomes for a firm. A customer journey is a visual representation of an individual’s path towards becoming a consumer of a brand, including every single possible touchpoint. This essentially provides a framework for the second tool, experience mapping, which maps unique interactions at different points of the journey.

The key difference between experience maps and customer journeys is that the former is customisable. The innate value experience mapping then brings is its business outcome, which is its potential to drive conversion and harness the power of the intelligence (picture a cloud-based engine analysing the full customer journey 24/7, providing data-backed real-time knowledge and insight into content, engagement, and conversions).

Though both yield valuable insights into customers’ experiences with the brand, businesses should pick a tool based on their end goal. Customer journey maps are best used when the business would like to gain a macro-perspective and understand what customers experience when interacting with their brand. Consequently, experience mapping is the ideal tool for honing into a specific type of customer or persona and understanding one particular element of the business.

The benefits of mapping are tremendous. John noted that businesses can leverage customer experience maps to create the most seamless experience for the customer, especially with the ever-increasing need for customers to be able to effortlessly navigate from one channel to another. Additionally, it is through these maps that firms can understand at what points potential customers may get stuck in their purchase journey, providing invaluable insight for the marketing team to improve brand messaging for such interactions. It is only through a thorough understanding of the customer’s needs that the brand may improve retention and even sales through encouraging repeat purchases and sharing about the firm via word-of-mouth.

Future-proofing with technology

Customers now demand seamless transactions: there is little patience for businesses hosted on inefficient and slow platforms. John disclosed a growing trend of organisations re-examining their current web CMS (content management systems) in the endeavour to increase efficiency and initiatives to stay ahead. It’s an intuitive move given that CMS platforms are used daily by digital teams at the core of DXP (digital experience platform) execution.

There are a few options when it comes to choosing a CMS platform, John shared. First of them are open-source and freeware products. Though cost-effective, firms would have to evaluate the security risks that come with them. After all, security holes in these open-source solutions are handled by the community—meaning that the speed and efficiency of addressing such issues highly depend on their skills and experience. For many businesses, a cost-efficient web CMS platform from a reputable company may be a better option, since it offers reliability, stability, and security. Instead of an open-sourced product, going commercial means timely fixes for vulnerabilities as they occur in addition to reliable maintenance and support. Companies could also stick to their legacy CMS, though John advised against this. He said that software maintenance fees for legacy enterprise CMS tends to be excessive, and this is before even adding the high cost of keeping the team of developers on board to support the platform. All in all, moving to a more current and suitable CMS means that companies can take advantage of more “out of the box” usability, digital marketing self-serve, and rely less on developers for content publishing.

One potential pitfall organisations might fall into is looking at globally promoted enterprise web CMS solutions, where “globally” tends to really mean “US-centric”. For instance, a 5,000 employee strong company in North America would be considered mid-size, which isn’t the case in Asia. Companies should carefully scrutinise CMS platforms and ensure that they address their needs before committing to one. A more suitable choice for organisations in Asia would be CMS recognised as comprehensive and out of the box, as they deliver enterprise-class technology targeted at more nimble businesses of fewer than, say, 5,000 employees.

Other trends John brought attention to were the rise of PaaS cloud offerings for their CMS platforms, as well as headless CMS platforms. The PaaS model enables businesses to pay as they go, based on the achieved results, which makes operational costs more predictable. Organizations also don’t have to take care of any security, performance and IT problems since these are handled by the platform vendor. Marketing and IT can focus more on what really matters for the business instead of worrying about operational and maintenance issues.

At its essence, these trends all point towards future-proofing businesses’ technology, as the optimal CMS platform will be DXP-compliant for technology, and integratable with other DXP functions as well as offer data connectivity with the enterprise back end. All of these serve to enhance customer experience and address the digitally savvy consumer.

Transforming financial institution

As with any other sector, transformation remains a core strategy for financial institutions (FSIs) to stay ahead of the curve. FSIs today are almost unrecognisable from even a decade ago with their evolution catalysed by digital trends and technological advances. Still, FSIs are often hesitant to commit to change. The paradox they fall into is this: While FSIs, especially in retail, are heavily reliant on digital for their services—possessing the business potential and the ROI to experiment with new DXP options—the nature of their business often mandates them to be the most risk-averse in operations and IT. John stresses that despite this conflict, FSIs must be able to find the sweet spot between providing efficient operating systems and processes while still maintaining their institution’s core of traditional values and systems.

To achieve this, John suggested that FSIs look into a CMS that enables heightened self-service rather than reliance on IT or developers for content publishing. This would enable FSI users to navigate and change their product pages easily, efficiently, and most importantly, independently. A must for FSIs’ next CMS would also be table stake features like personalization and analytical intelligence as well as headless capability. It goes without saying that it must be robust and secure, with prudent vendors that have a strong track record and reliable operations.

Though digital transformation is not without risks, long-term benefits definitely outweighs initial high cost and time spent.

Tips for creating better digital experiences

Businesses need to understand how the individual customer responds when interacting with the brand, whether this is achieved through experience mapping or otherwise. The more data the business collects on their target audience, the easier it is to develop personalised conversations with individuals either digitally or via the human sales team.  When experience mapping, John also warns against a common mistake: where businesses map out what they think the customer experience should be rather than the actual customer experience, warts and all. The biggest tip for businesses would be to stop guessing, and start measuring. 

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