Finance Transformation

Family Businesses See Largest Growth Increase In 15 years

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22 March 2023

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

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

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

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

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

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

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

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

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

Building trust through commitment to purpose

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

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

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

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

Digital capabilities for better corporate governance and customer relations

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

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

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

Board diversity is key for transformation

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

Financial Shared Services – The Approach To Mitigating Uncertainties

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15 March 2023

Financial shared services is an effective way to streamline financial operations and achieve operational efficiency.

Financial Shared Services refers to a business model in which a company consolidates its financial operations into a centralized unit that serves multiple business units or entities within the organization. The aim is to achieve economies of scale, reduce costs and streamline financial processes.

In a financial shared services model, activities such as accounts payable, accounts receivable, general ledger accounting, financial reporting, and tax compliance are centralized within a single unit. This unit then provides these financial services to different business units or entities within the organization, typically through a service level agreement (SLA).

Financial shared services can be implemented within a single company, or as a third-party service provider for multiple organizations. The benefits of financial shared services include increased efficiency, improved financial transparency and control, reduced costs, and better risk management.

Benefits of Financial Shared Services

The benefits of financial shared services can be significant for organizations that implement this model. Some of the key benefits include:

Cost savings: By consolidating financial operations into a centralized unit, organizations can achieve economies of scale and reduce costs associated with duplicate processes, technology, and staffing.

Improved efficiency: By standardizing financial processes and utilizing technology to automate routine tasks, financial shared services can improve the speed and accuracy of financial reporting, reduce errors, and increase productivity.

Better risk management: Financial shared services can help organizations to better manage financial risk by establishing consistent policies and procedures across the organization, improving compliance with regulations, and increasing visibility into financial data.

Enhanced financial transparency: Financial shared services can provide better visibility into financial data and make it easier to analyze financial performance across different business units or entities within the organization. This can help organizations to make more informed decisions and improve overall financial performance.

Increased focus on core business activities: By outsourcing non-core financial activities to a shared service center, organizations can free up resources and focus on core business activities that are more closely aligned with their strategic objectives.

Overall, financial shared services can help organizations to improve efficiency, reduce costs, and improve financial transparency and control, allowing them to make better decisions and achieve their strategic objectives more effectively.

Reasons Why Companies Are Still Not Using Financial Shared Services

While financial shared services can provide significant benefits to organizations, there are also several reasons why some companies may not have implemented this model. First of all, organizations may have a lack of understanding of the benefits of financial shared services, or they may be unaware of how this model can be applied to their specific business needs.

Secondly, companies with complex organizational structures may find it difficult to implement financial shared services. This is because the consolidation of financial processes and systems can be challenging, especially if there are multiple business units or entities with different accounting practices and systems.

Organizations may also be resistant to change as implementing financial shared services requires a significant shift in how financial processes are managed and can be disruptive to established workflows. This can result in resistance to change among employees, which can make it difficult to implement the new model.

Businesses may also be concerned with the costs of implementing such systems despite it resulting in cost savings over time. This is because, it is undeniable that there may be initial costs associated with implementing the new model, such as investing in new technology or hiring additional staff. Some organizations may be hesitant to invest in these costs upfront.

Additionally, companies may also experience outsourcing concerns. Outsourcing financial services can be seen as a risk for some organizations and they may be concerned about losing control over financial operations or the quality of service provided by third-party service providers.

While financial shared services can provide significant benefits, it may not be the right fit for every organization. Each company must carefully evaluate the potential benefits and challenges of implementing financial shared services to determine if it is the best approach for their business needs.

Examples Of Financial Shared Services

There are many different types of financial shared services that can be implemented within an organization, depending on the specific needs and goals of the business. Here are a few examples of financial shared services:

  1. Accounts Payable (AP) shared services: In this model, the accounts payable function is centralized within a shared service center. This center processes invoices, issues payments, and handles vendor inquiries on behalf of multiple business units within the organization.
  2. Accounts Receivable (AR) shared services: In this model, the accounts receivable function is centralized within a shared service center. This center handles billing, collections, and customer inquiries on behalf of multiple business units within the organization.
  3. General Ledger (GL) shared services: In this model, the general ledger accounting function is centralized within a shared service center. This center manages the organization’s financial records, including journal entries, reconciliations, and financial statement preparation.
  4. Financial Reporting shared services: In this model, the financial reporting function is centralized within a shared service center. This center is responsible for producing the organization’s financial statements, analyzing financial performance, and providing insights to senior management.
  5. Tax shared services: In this model, the tax compliance function is centralized within a shared service center. This center handles tax planning, compliance, and reporting for the organization, including managing relationships with tax authorities.

These are just a few examples of financial shared services. Other possible shared services might include budgeting and forecasting, financial analysis, or treasury operations. The specific services provided will depend on the needs and goals of the organization.

All in all, financial shared services can provide significant benefits to organizations that choose to implement this model. By consolidating financial processes into a centralized unit, organizations can achieve cost savings, improve efficiency, and enhance financial transparency and control. Financial shared services can also help organizations to better manage financial risk and focus on core business activities.

However, there are also potential challenges to implementing financial shared services, such as organizational complexity, resistance to change, and cost concerns. Each organization must carefully evaluate the potential benefits and challenges of implementing financial shared services to determine if it is the right approach for their business needs. Financial shared services can be an effective way to streamline financial operations and achieve operational efficiency, which can lead to improved financial performance and better overall business results.

Understanding People Process And Technology Priorities In Finance

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14 March 2023

Understanding the people’s process and technologies that complement it is crucial to businesses who want to succeed in such uncertain times.

Finance is a complex and multifaceted industry that involves various processes, procedures, and people. Understanding the people’s process in finance is crucial for anyone who wants to succeed in this field. In this article, we will discuss the importance of the people process in finance and how it impacts the industry as a whole.

People Process In Finance

The people process in finance refers to the individuals and teams that work together to manage financial transactions and investments. This includes everyone from analysts and traders to managers and executives. Each person plays a crucial role in the process, and their actions can have a significant impact on the outcome of financial transactions and investments.

One of the key components of the people process in finance is communication. Effective communication is essential for ensuring that everyone involved in financial transactions and investments is on the same page. This includes understanding the goals of the transaction, the risks involved, and the expected outcomes. It is also important for everyone to understand their individual roles and responsibilities, so that there is no confusion or misunderstanding.

Another critical aspect of the people process in finance is collaboration. Financial transactions and investments often involve multiple individuals and teams, each with their own unique skills and expertise. Collaboration allows everyone to work together towards a common goal and to leverage each other’s strengths. This can lead to more efficient and effective financial transactions and investments.

The people process in finance also involves managing risk. Financial transactions and investments can be risky, and it is important to have people in place who can identify and manage those risks. This includes individuals who are skilled in risk assessment and mitigation, as well as those who can create and implement risk management strategies.

The people process in finance also includes the need for continuous learning and improvement. The finance industry is constantly evolving, and it is essential for individuals to stay up-to-date on the latest trends and best practices. This includes attending conferences, participating in training programs, and staying informed about industry news and developments. By continuously learning and improving, individuals can stay competitive and better serve their clients and organizations.

The people process in finance also plays a critical role in ethical decision-making. Financial transactions and investments can have a significant impact on individuals, organizations, and even entire economies. It is important for individuals involved in these transactions to make ethical decisions that consider the interests of all stakeholders. This includes being transparent, honest, and accountable for their actions.

Understanding the people’s process in finance is critical for anyone who wants to succeed in this industry. It involves effective communication, collaboration, risk management, continuous learning, and ethical decision-making. By understanding and embracing the people process in finance, individuals can contribute to the success of their organizations and the industry as a whole.

Technology Priorities In Finance 

Technology is revolutionizing the finance industry by transforming the way financial transactions are conducted, processed, and managed. In addition to improving efficiency and reducing costs, technology is also playing a vital role in aiding the people’s process in finance. Here are some ways in which technology is helping people in finance work more efficiently and effectively:

Collaboration Tools

Collaboration tools such as project management software, virtual meeting tools, and chat platforms enable finance professionals to work together more effectively, even when they are in different locations. These tools allow for real-time collaboration and communication, making it easier for individuals to work together towards a common goal.

Cloud Computing

Cloud computing allows finance professionals to access data and applications from anywhere, at any time, using any device with an internet connection. This makes it easier for teams to work together on projects, and it also enables individuals to work remotely without sacrificing productivity.

Automation

Automation tools can help reduce the amount of time and effort required for manual tasks, freeing up individuals to focus on higher-value tasks. This includes automating processes such as data entry, compliance checks, and report generation, which can be time-consuming and repetitive.

Data Analytics

Data analytics tools enable finance professionals to analyze large data sets quickly and easily, providing valuable insights that can inform business decisions. These tools can help individuals identify patterns and trends in data, make predictions based on historical data, and track key performance indicators.

Artificial Intelligence and Machine Learning

Artificial intelligence and machine learning can automate routine tasks, improve decision-making processes, and enhance risk management. These technologies can be used to identify fraud, predict customer behavior, and optimize financial portfolios, among other applications.

Mobile Apps

Mobile apps are becoming increasingly popular in finance, providing individuals with the ability to access financial data and perform transactions from their mobile devices. This includes features such as mobile banking, mobile trading, and mobile payment options, which enable individuals to manage their finances on-the-go.

In conclusion, technology is playing a crucial role in aiding the people’s process in finance by enabling individuals to work more efficiently, collaborate more effectively, and make more informed decisions. By embracing technology and leveraging its many benefits, finance professionals can enhance their productivity, improve customer experiences, and stay competitive in an increasingly digital world.

Why Financial Business Intelligence Is A Must Have For CFOs?

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13 March 2023

Business Intelligence is an essential tool for finance teams looking to gain a competitive advantage in today’s rapidly changing business environment.

Business Intelligence (BI) refers to the process of collecting, analyzing, and presenting data to gain insights that can be used to inform business decisions. In the context of the finance team, BI involves leveraging data to understand the financial health of an organization and make informed decisions that can drive growth and profitability.

The finance team is responsible for managing an organization’s financial resources, including budgeting, forecasting, and reporting. By utilizing BI tools and techniques, finance teams can gain a better understanding of the underlying factors that impact financial performance, such as revenue, expenses, and cash flow.

BI tools enable finance teams to access and analyze data from various sources, such as accounting systems, financial statements, and market data. With the ability to integrate and analyze large volumes of data, BI can provide finance teams with the insights they need to make data-driven decisions quickly and efficiently.

BI can be used to identify trends, patterns, and anomalies in financial data, allowing finance teams to forecast future performance and make informed decisions about investments, capital expenditures, and other financial activities. BI can also be used to monitor and manage risk by providing real-time updates on key performance indicators and other metrics. With BI tools, businesses are now empowered with strategic decision-making and are better able to support business operations. 

The Importance Of BI To CFOs

BI is of significant importance to Chief Financial Officers (CFOs) as it enables them to make data-driven decisions that can have a direct impact on the financial performance of an organization. Here are some of the ways BI is crucial to CFOs: 

Real-time financial insights: BI tools can provide CFOs with real-time access to financial data from multiple sources, such as accounting systems, market data and customer data. This allows them to quickly identify trends, patterns and anomalies that may affect financial performance and take appropriate action. 

Better forecasting and budgeting: BI can help CFOs to improve forecasting and budgeting accuracy by providing insights into future performance based on historical trends and data analysis. 

Improved risk management: CFOs are responsible for managing financial risk and BI can help them to identify and mitigate potential risks by monitoring key performance indicators and other metrics in real-time. 

Increased efficiency and productivity: BI tools can automate data collection, analysis and reporting, reducing the time and effort required to gather and analyze financial data. This can free up time for CFOs to focus on strategic decision-making. 

Enhanced collaboration: BI can facilitate collaboration between CFOs and other departments by providing a shared view of financial data and insights. This can help to align strategic goals and improve overall organizational performance. 

How BI Is Being Used By Today’s Finance Teams

Planning and analysis: Dashboards for FP&A, budgeting, and forecasting aid in achieving operational and strategic objectives. BI tools are widely used by financial analysts to provide performance predictions for a firm. Finance teams can compare actual performance with what was predicted using the data they employ, which is derived from sources that offer insights on business trends, cash flow, historical data, scenario modeling, and variance assessments, and then delve deeper into any disparities. 

Operations reporting: By compiling information on the day-to-day reality of running a firm, this type of dashboard offers a tactical view of corporate operations. CFOs can focus on making quick decisions because operations data in BI systems provides precise information on immediate and short-term demands. In other words, operations reporting provides incredibly detailed information for business strategists to use. As an illustration, BI can be used to examine the time it takes to convert an invoice into cash in order to support cash-flow objectives and improve process effectiveness.

Expense reporting and management: The finance department can use dashboards and analytics to monitor expense policies, track T&E trends, and get a complete view of employee spending. Successful strategies include establishing notifications and reminders to actively manage expenditures, arranging dashboards and reports to be distributed via email to managers to help them oversee their staff, and integrating BI tools to the company’s expenses, invoices, and online travel booking systems.

Cash flow management: Managers may automatically create and regularly update AR and AP forecasts, making cash flow management simpler. In the event of a financial surplus or shortage, the business will be able to reduce spending or act rapidly on growth prospects. Business intelligence may also assist with cash flow management by assisting organizations to examine the length and cost of significant projects, become more cautious with their inventory expenditure, and choose whether to proceed with a merger or acquisition.

Profitability management: Systems for business intelligence (BI) dissect variables including channel profitability, the effect of discounts, lifetime revenue contributions for different groups, and more. CFOs and other business executives can concentrate on attracting and keeping profitable clients with the help of these insights. In the end, BI aids executives in understanding how consumer behavior and profitability are related.

Performance improvement: Monitoring performance measures like net profit, cash conversion times, and operating profit margins requires continuous attention to financial KPIs. The information provided by BI systems shows whether the company will be able to meet its goals.

Customer segmentation: Businesses can use information gained from business intelligence technologies to better comprehend the unique demands of their clients, regardless of their preferences, purchasing patterns, age, or gender. In order to sell to target audiences with pertinent campaigns and increase sales, it will be necessary to gain a deeper understanding of each consumer category, including what they value most.

Overall, BI is an essential tool for finance teams looking to gain a competitive advantage in today’s rapidly changing business environment. By leveraging the power of data, finance teams can make better decisions, improve performance, and drive long-term growth and profitability.

Financial Transformation – Key Trends And Drivers In 2023

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1 March 2023

Finance transformation in 2023 will be driven by a range of factors, including digitalization, data and analytics, ESG and sustainability, resilience and risk management.

As we move into 2023, the finance function is undergoing significant transformation. The digital revolution, the pandemic and its aftermath, and the need for businesses to be more agile and data-driven have all accelerated the pace of change. With that said, let’s take a closer look at some of the key trends and drivers behind finance transformation in 2023.

Digitalization And Automation

The finance function has been steadily moving towards digitalization and automation for some time now, but the events of the past few years have accelerated this trend. With remote work and distributed teams becoming the norm, the need for digital tools and systems that enable collaboration, communication and efficiency has become even more pressing.

In 2023, we can expect to see finance departments continuing to adopt new technologies such as AI, machine learning, and robotic process automation (RPA) to streamline processes and reduce costs. The use of cloud-based solutions and software-as-a-service (SaaS) models will also continue to gain momentum, enabling finance teams to access critical data and insights from anywhere, at any time.

Financial institutions will continue to focus on operational efficiency and cost control by automating previous manual and paper-driven processes. But the question is whether financial institutions are able to streamline processes to drive a bigger impact for customers and businesses?

“Financial services companies have traditionally been a target-rich environment for cybercriminals given their ownership of the vast volume of sensitive client and third-party information and of course money. As such, it is pertinent that data privacy and cybersecurity remain top-of-mind consideration in companies’ pursuit of digital transformation. This is achieved by adopting holistic security protection through scalable edge-enabled security solutions that improve both the security and observability of the network and application traffic, as well as the performance and reliability of your applications.

– Stephen Cumming, CFO, Edgio

“Against an increasingly competitive landscape where new entrants are offering enhanced digital capabilities, FSI players are currently hampered by aging legacy systems that diminish their ability to meet clients’ evolving needs. As such, the network infrastructure should be a key investment area. This will not only empower the organizations to remain scalable and keep pace with an increasing hostile cyber landscape but also in deploying emerging technologies – such as AI, machine learning, and blockchain.”

– Agnes Lim, CFO, Asia Pacific at NTT Ltd

“The best financial institutions harness the power of the entire organization to serve customers and businesses, who desire the same optimal consumer friendly experiences they get in their personal lives. When customer service is orchestrated via smart digital workflows that transcend people, departments and systems, financial institutions are able to deliver speed, convenience and transparency to drive fierce customer loyalty. Breaking down the digital and organizational silos will help drive greater productivity and enable financial institutions to create a model of operational resilience capable of withstanding unforeseen issues, like outages and cyberattacks.”

– Wee Luen Chia, Area Vice President and Managing Director, Asia, ServiceNow

Focus On Data And Analytics

As businesses become more data-driven, the finance function is increasingly being called upon to provide strategic insights and analysis. In 2023, we can expect to see finance teams placing even greater emphasis on data and analytics, using new tools and techniques to gain deeper insights into business performance and to forecast future trends.

This will require finance professionals to develop new skills and capabilities, such as data visualization, predictive analytics, and data storytelling. We can also expect to see increased collaboration between finance and other functions, such as marketing and operations, as they work together to leverage data and drive business growth.

ESG And Sustainability

Environmental, social, and governance (ESG) issues have become a top priority for businesses across all sectors, and finance teams are playing an increasingly important role in addressing these challenges. In 2023, we can expect to see finance departments taking a more proactive approach to ESG and sustainability, using data and analytics to identify opportunities for improvement and to monitor progress against targets. This may include the development of new financial instruments and models that support sustainable business practices, as well as the integration of ESG considerations into traditional financial reporting and analysis.

Resilience And Risk Management

The COVID-19 pandemic has highlighted the need for businesses to be more resilient and agile in the face of unexpected challenges. Finance teams will continue to play a critical role in supporting this effort, with a focus on risk management, scenario planning, and stress testing. In 2023, we can expect to see finance departments placing even greater emphasis on risk management and resilience, using new tools and techniques to identify and mitigate potential risks. This may include the development of new risk models and stress tests, as well as the adoption of more advanced analytics and simulation tools.

Talent Development And Upskilling

As the finance function undergoes transformation, it is essential that finance professionals are equipped with the skills and capabilities needed to succeed in the new environment. In 2023, we can expect to see a greater focus on talent development and upskilling, with finance departments investing in training programs and initiatives that enable their teams to acquire new skills and adapt to new ways of working. This may include the development of new career paths and job roles, as well as the adoption of new training methodologies such as gamification and microlearning. It will also require a greater emphasis on diversity and inclusion, as finance departments seek to build teams that reflect the wider range of perspectives and experiences needed to drive innovation and success in the new digital age.

Where Should Finance Leaders Focus Their Digital Transformation Efforts On?

With so many rising trends and priorities that finance leaders need to take note of, where then, should they focus their digital transformation efforts? Let’s take a look at the various perspectives of finance leaders in the market: 

“Investment in key capabilities such as networks and cloud migration will allow institutions to reap a plethora of business operational benefits. However, FSI players are hampered by limited access to relevant technologies, security, and expertise. The inability to streamline processes will translate to lost business and struggles with the increasingly complex business environment. In this regard, a partnership with service providers can help organizations to maintain the infrastructure and to work towards making it future proof.”

– Agnes Lim, CFO, Asia Pacific at NTT Ltd

“New technologies, such as edge platforms, can empower financial institutions in overhauling operations. Edge platforms allow financial organizations to bring security to the edge without compromising performance and productivity. These platforms proactively address advanced threats at the edge, providing business analytics and expedites the resolution of operational challenges. With these business intelligence, improved agility, financial organizations can focus on providing superior user experience thus promoting business growth.”

– Stephen Cumming, CFO, Edgio

“With the rise in scams, data leaks and unauthorized transactions, people are gradually losing trust in financial services. At Mastercard, security is baked into the foundation of every product and service. Any business in the financial sector today must put data privacy and security at the core of its digital transformation agenda. With privacy-enhancing technologies (PET) and other emerging technologies like distributed AI, companies have a wider range of solutions that improve data utility without compromising on individual privacy or customer experience. Financial services should focus on implementing a combination of these technologies to instill trust in every digital transaction”.

– Safdar Khan. Division President, Southeast Asia, Mastercard

In conclusion, finance transformation in 2023 will be driven by a range of factors, including digitalization, data and analytics, ESG and sustainability, resilience and risk management. And depending on the services that businesses provide, they should look closely at their consumers’ needs and measure for themselves where they should invest their digital transformation efforts in. 

Where Should the Finance Function Focus Their Digital Transformation Efforts?

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22 February 2023

Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine

As 2023 officially begins, CFOs that are facing economic challenges are maintaining their cost-cutting efforts as a potential recession looms. Yet, this does not imply that efforts like digital transformation have lost priority because CFOs still see it as strategically significant for their companies. Regardless of what is happening, it must be done and is still a top priority. However, leaders in finance are still having trouble getting their digital transformation initiatives forward. Some may not necessarily know how to move forward in their digital transformation journey hence why DigitalCFO Asia decided to speak with Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine to get his perspective on the topic. 

Finance Function’s Present Digital Transformation Efforts

“The pandemic has taught us that digitalization is key for companies to stay competitive and thrive,” says Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine.

These sentiments seem to be echoed still as the finance function contemplates what lies ahead in their digital transformation efforts. BlackLine’s latest survey with Censuswide showed that 51% of C-suite executives and finance and accounting (F&A) professionals in Singapore indicated that they will invest more in digital transformation initiatives this year. 49% of them are considering implementing or scaling automation solutions to increase and optimize working capital in 2023, proving that digital transformation is still key in the corporate agenda.

Challenges That Are Holding Finance Teams Back In Their Digital Transformation Journey

The present economic climate has inevitably presented many challenges across various functions and industries. BlackLine’s survey with Censuswide highlighted the three biggest obstacles C-suite and F&A respondents in Singapore highlighted they will face in the coming year: 

  • Reduced budget for their department
  • Increasing regulations and scrutiny
  • Being able to provide accurate data quickly enough to help the organization respond to market changes

It’s understandable when companies hold back on making new changes amid ongoing financial challenges such as crippling supply chains and unprecedented high interest rates. Organizations would choose to prioritize understanding their cash flow in real time and optimizing their operations to minimize the impact of external disruptions. Moreover, the F&A profession is struggling with an unprecedented labor shortage like many other functions, forcing them to look at solutions which aren’t dependent on staff expansion. 

“This is also why it’s critical to replace any labor-intensive processes such as conventional Accounts Receivable (AR) processes with automated solutions to free up resources which can be allocated to strategic decision-making.”

Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine

Companies which are still hesitant can weigh the benefits and costs with a simple question: How much time and money can we save if we automate a certain process? A follow-up to that would be to weigh the benefits and evaluate what would be best for the organization at that time. 

Key Priorities That Organizations Hope To Achieve With Digital Transformation

With the ongoing shortage of talent in F&A functions, organizations are looking at how they can use digital technologies to improve operational efficiencies, and manage the workload of existing employees. With legacy technology and processes, F&A professionals may spend the best part of their work week dealing with repetitive transactional tasks. Not only is this inefficient, F&A professionals are also unlikely to feel challenged, valued or fulfilled in their roles. Digital technologies such as intelligent automation take over the repetitive and tedious work, allowing F&A professionals to focus their attention on more strategic tasks.

“Ensuring compliance is another key priority, especially as businesses manage data from across different systems, business units and stakeholders, amid increasing regulations and scrutiny,” emphasized Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine.

Traditional compliance processes can typically be quite manual, fragmented and siloed, which is why organizations are turning to integrated, cloud-based solutions like BlackLine to help with compliance management.

Southeast Asia’s leading on-demand multi-service platform, Gojek, is one such example. The company deals with massive amounts of data – related to logistics, bookings, transactions and financial movements – from various sources. With the high data volume, Gojek needed a tool that would help them quickly, accurately and effectively reconcile payment data across multiple formats to match transactions with bank statements. With BlackLine, Gojek was able to generate critical reports and meet the highest governance standards through their compliance across finance and accounting operations. 

Steps CFOs Should Take To Either Begin Or Enhance Their Digital Transformation Efforts

The digital transformation process looks different for each organization, depending on their industry, company size and scale, existing technological maturity and so on. However, what is common among those who have had success in introducing digital initiatives in their organizations, is having a clear understanding of what the organization hopes to achieve with digital transformation. 

“As a first step, CFOs will need to determine the organization’s objectives, and what success would look like for their organization,” says Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine.

They can then set goals by benchmarking their organization against others of similar size and scale, which have already undergone transformation. 

CFOs will also need to get CIOs closely involved in the digital transformation initiative. According to Gartner, success in digital investments is highly dependent on strong CFO-CIO partnerships. Just as how financial operations management is not solely the CFO’s responsibility, managing data too is not the duty of the CIO alone. These are shared responsibilities, which would require CFOs and CIOs to speak the same language, to have a productive discussion on how to turn investments on digital technologies into real digital capabilities for the organization.

CFOs In Ensuring That Digital Transformation Efforts Cause Minimal Disruption To Their Workflow

CFOs should learn from others who have had experience implementing a finance transformation program, and adopt any learnings to minimize disruption to their existing workflows. Here are some tips:

  • Plan ahead, and set clear, quantifiable goals as a benchmark for progress
  • Lean on the expertise of reputable, experienced software providers, rather than dedicating significant resources to building, maintaining and upgrading a solution from scratch
  • Equip teams with the necessary tools and skill sets to run a digitalised finance function 

Why Automation Progress Is Likely To Stall In 2023?

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17 February 2023

In this new era of humans and machines, talent shortages and the demand for technical talents that are in short supply are serious problems.

The world has changed in terms of automation. Notwithstanding the substantial advantages of automation that have been established over the previous few years, the pace of automation will slightly slow down in 2023. A more sensible strategy is being driven by economic uncertainty, which is putting the brakes on change to concentrate on key business drivers like resilience and efficiency. For those with the fortitude to adapt to 2023’s reality while still doubling down on automation to gain a competitive advantage, their efforts will be rewarded.

Unfortunately, the pace of automation will probably slow down due to a lack of skilled workers. The major problem with skill shortages is that there aren’t enough individuals with the skills needed to design and maintain automation. These issues include a slower learning curve for business developers to master low-code development tools, skill shortfalls for expert developers across the AI spectrum, and a lack of qualified analysts and project managers for automation initiatives. Although there will always be a skills gap, 2023 will be particularly challenging.

When it comes to the current skill gaps in the APAC region, many business owners and finance leaders are forced to embrace a deep understanding of digital tools, from data collection to analytics and real-time feedback directly to the operating environment. This requires going beyond the fundamentals of programming. Also, emphasis needs to be placed on how people, particularly employees, will be taught to communicate with machines and systems. The ability to collaborate with “digital” workers to complete tasks will determine an employee’s ability to be productive in a highly linked and intelligent environment.

Many financial directors are beginning to realize that automation does not entail replacing people in their organizations. When firms really start the process, they frequently discover that their human employees are much more valuable than they initially imagined, which is why they need to be upskilled. Finance executives should see intelligent automation as a resource that can rethink company models, enable the attainment of higher quality results, and free up staff for higher-level duties.

Many functions, including contact centers and services, are being automated, but entire job roles are not being replaced. When senior executives consider a worker, they should consider how automation, artificial intelligence, and machinery may assist workers in performing their duties. What kind of software and intelligence will make that the most successful? Business executives must also question themselves regarding what abilities are required to complete such duties. These talents could be provided by external employees, but in the current digital age, bots with specialized skills are increasingly taking on these activities, and people will be needed to make sure that the bots are carrying out their instructions.

So where do you find these people? Must you necessarily go “out with the old and in with the new”? With the talent pool becoming more competitive, companies should not risk removing their current employees and hiring new ones. What business leaders should be doing is upskilling their workforce. Top executives should first evaluate the skill gaps that exist among their workforce and establish priority areas. This is due to the fact that developing a successful upskilling strategy will only be possible if the organization can pinpoint the precise capabilities it needs both now and in the future.

The corporation should then ask each employee what talents they are most interested in obtaining and how they see their career developing within the business. Making employee development plans is the greatest approach to collect this data. CEOs must make sure that the professional objectives of their staff complement those of the business. Plans for employee development will help executives understand a worker’s expectations for their professional future. Executives can then assign the appropriate staff to the appropriate training resources. Also, the company will be able to provide their staff with greater feedback and empower them to develop career goals that have a better likelihood of success inside the corporation.

Also, businesses should approach their upskilling initiatives from a collaborative, win-win perspective. With this strategy, businesses should give their staff members enough time to learn during working hours. Employees can completely commit to upskilling and advancing their abilities without significantly compromising their own time by setting aside time for learning. To make upskilling for employees simpler and more enjoyable, organizations should use mobile learning strategies in addition to dedicating time for it. Upskilling will directly benefit the company once a worker has mastered and is using a profitable talent.

The abilities obtained by one team member who participates in a company-sponsored upskilling program should be advantageous to the whole team. Setting up a post-training engagement where the trained person shares their newfound knowledge with the rest of the group is therefore a fantastic idea. A post-training program creates a clear channel for knowledge transfer within the firm, ensuring that businesses achieve a solid long-term return on investment. Businesses will gain from the investment in upskilling even if the trained employee receives better job offers and departs from your organization in this way. A post-training program also aids newly trained employees in comprehending the skills they have learned.

In this new era of humans and machines, talent shortages and the demand for technical talents that are in short supply are serious problems. If companies want to expand on the basis of AI and analytics technologies in the future, they may need to develop new ways to source and improve the capabilities of their current workforce due to the predicted expansion of job openings outpacing the availability of competent individuals.

Essential Changes That Will Modernize & Simplify Finance Systems

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7 February 2023

Businesses need to understand that this transition is unavoidable and that they must act now to be competitive in order to avoid falling victim to the difficulties that the uncertain market will present.

It is more important than ever to anticipate change, act quickly to address global developments, and adjust to changes in consumer and market expectations in the economic and corporate climate of today. The huge task of managing corporate assets and ensuring their proper flow rests with finance departments. But these days, chief financial officers (CFOs) and their staff shoulder more responsibilities in financial companies.

Finance is currently viewed less as a support function and more as a factor in overall strategic development. This implies that other CEOs frequently turn to CFOs for financial and business advice that can actually determine the strategic course of their own firms. It goes without saying that when a business expands, its processes become more intricate. They start to manage more finances, more clients and staff, and more big and small company decisions all at once. The quantity and complexity of the accounting tasks that a company must perform will definitely rise as it grows.

It might be time for businesses to think about investing in finance modernization especially when more people are looking to the business to lead. Automation technology can be used by businesses to simplify their accounting processes, save operating costs, and provide a single, uniform data source for all accounting data.

Transforming Dated Financial Core Systems

Businesses must adopt comprehensive, business-driven modernization that is aware. Although mainframes are heavily utilized by financial organizations, they are unable to keep up with the constant development of rules and high consumer expectations. Remaining stationary is the single thing the sector cannot afford to do. Companies in the financial services and sector must embrace modernity while being risk-aware.

Waiting till the last minute or organizing every step independently simply will not work. Instead, businesses must organize and carry out the full modernisation process as a comprehensive trip based on both technology and business aspects. By using this strategy, it is possible to maintain decades of crucial business logic and benefit from huge amounts of historical data while achieving industry-leading customer experience (CX) and security.

Despite their immense capacity, mainframes hinder financial resources, creativity, and agility. Finding substitutes is a significant concern as mainframe professionals are getting older and retire. Despite the fact that cloud platforms are a crucial part of modernization, it is clear that mainframes have prevented important financial sector organizations from converting to an agile, cloud-based development system.

Due to the risk of damaging crucial business operations, many financial institutions only access the mainframe when strictly essential. However, as the mainframe continues to lag, the company’s CX and security procedures become more obsolete, and the disparity with vanguards widens. Executives must have a thorough plan to embrace the contemporary era and create a gradual and iterative approach to build financial platforms of the future in order to reduce risk while remaining nimble and keeping up with challenges and laws that are always evolving.

Major issues can be swiftly resolved by finding a partner who can manage a mainframe well. Because many mainframe specialists are choosing early retirement or quitting the profession due to the pandemic, there is a substantial risk of talent shortages in sectors including capital markets, banking, and insurance that largely rely on mainframes. The organization will be far less likely to lose seasoned mainframe developers and engineers who are getting harder and harder to replace if the aforementioned partner can give access to qualified mainframe resources.

Business executives can also benefit from the economies of scale and mainframe-as-a-service model offered by their partner, using the savings to fund the following stage of the modernization process. These three pillars will serve as the framework for a conscious modernization program throughout the transformation process. This is a genuine win-win strategy with partners that will let businesses take use of the ecosystem’s value as well as its scale, influence, and approaches for managing costs and risks.

Moving Financial Processes To The Cloud

Adopting the new target cloud-based infrastructures and relocating the mainframe off-site are the next steps. Providers ought to provide a private cloud infrastructure of their own, or they will collaborate with a hyperscaler like AWS, Azure, or Google. The company can move to high-availability zones for ultra-low-latency connections between mainframe and cloud applications if its partner has a good working relationship with the hyperscalers. Operations may be significantly impacted by migration but moving to a cloud system has the ability to lower infrastructure costs, as well as energy use and result in significant performance gains.

Although the idea of “migrating to the cloud” may seem frightening, cloud-based solutions are widely accessible and quite simple to set up. Software systems that operate in the cloud are growing in popularity. These platforms are typically provided using the software-as-a-service (SaaS) model, in which the cost is based on a subscription. Businesses are moving away from using software that is installed in their on-premises server and toward using cloud-based technologies for finance operations. As a result, the business is exempt from the requirement to buy software upgrades.

Cloud-based workflows make it much easier for the finance staff and the entire business to interact. The cloud platform allows for the access and sharing of documents. The request-and-approval procedures that are so prevalent in financial operations can also be carried out online. Steps in those procedures can be carried out by employees from any place. As a result, procedures that were previously complex and time-consuming, like requests for capital expenditures and vendor approvals, can be carried out more quickly.

The effectiveness of finance procedures will inevitably improve with increasing collaboration and digitization efforts. Increased accuracy is a further benefit, which is unquestionably crucial for finance teams working with real money. Automated workflows can reduce or even completely remove human errors brought on by repetition or calculation error.

A process that is automated can guarantee internal control compliance, which is equally crucial. So, the cloud-based platform may automatically carry out those tasks if a particular request has to be moved to a higher level for approval or if approvers need to be notified of pending requests. This is another example of how cloud computing improves accuracy and efficiency without the trade-off between the two that characterizes manual processes and server-based software.

Simplify Accounting Systems

To achieve expansion, small firms, like medium- and large-scale organizations, must streamline their accounting processes. Failure to establish systems for managing funds might cause unnecessary strain on the company’s revenue and prevent growth. Small firms typically have a small team and may not have the resources to pay for pricey accounting services. Owners of small businesses generally manage everything, from offering services or producing goods to shipping. Nonetheless, compared to other business duties, accounting for businesses is more unique and difficult. You may be headed for failure if you don’t manage your finances well and stick to your budget.

  • Instead of saving paper receipts from each order and customer, think about automating the expenditure tracking process. Scan the receipts and enter them into a database. This way small business owners will not run the risk of losing them once they start scanning and storing each receipt. Losing paper receipts is one thing but falling behind in financial management is quite another.
  • Develop systems that will help the company’s workflow. Businesses will feel more mentally at ease the more systematic their payment and cost tracking is. Reminding every customer to pay on time takes time and could damage relationships. Invest in an invoicing system that automatically sends each client a reminder at the beginning of the billing cycle rather than contacting or mailing each client manually.

The use of technology in financial management will help firms increase their effectiveness, performance, and efficiency in the face of new disruptions and hostilities. Additionally, it will simplify complex transactions, which will enhance contemporary economic activity in terms of number and quality. Moreover, it will improve the security of corporate information and other data that might get exploited. Businesses need to understand that this transition is unavoidable and that they must act now to be competitive in order to avoid falling victim to the difficulties that the uncertain market will present.

Financial executives and business leaders who are interested to find out more about how they can further modify and simplify their financial processes, you can register for DigitalCFO Asia’s Executive Roundtable in partnership with LucaNet here.

Leading Finance Teams In The Next Decade

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25 January 2023

By reducing absolute costs and redistributing effort toward more value-added activities, effective finance teams serve as guardians of corporate value development.

Finance leaders will probably need to change their goals in order to reach the next level of effectiveness and efficiency in the financial sector. In offering higher real-time insights, reducing biases and human error, and accelerating workflows and decision-making, these two actions are extremely important.

It Is Time To Look Into More Than Simply Transactional Actions

The efficiency of transactional tasks, particularly those related to accounts payable, accounts receivable, and other key accounting areas, has significantly increased in many top firms. Although the majority of businesses have space for improvement, further efforts to increase efficiency will almost certainly result in decreasing returns as the cost base for these activities continues to decline. The more critical areas of finance, such as FP&A, optimizing capital structures, tax planning, controllership, internal audit, and financial-risk management, on the other hand, have actually seen fewer efficiency benefits. However, this seems to be about to change.

Machine learning and artificial intelligence (AI) are becoming more and more applicable to complicated jobs as computing power increases, building on the success of robotic process automation (RPA) and related technologies that automate transactional processes. Machine-learning algorithms and analytics are currently being used by one high-tech producer to assess financial and business continuity concerns. With the aid of these technologies, audits may now concentrate on the riskiest units while taking up less staff time overall.

The management discussion and analysis for a monthly operational review was also provided by a worldwide consumer packaged goods firm using natural language generation (NLG). With the help of this technology, structured data is transformed into insightful financial language that synthesizes and summarizes information. Highly skilled finance employees have more time to address concerns and pursue opportunities thanks to the automation of certain of the reports. The demand for professionals with analytical skills, such as data scientists and machine-learning engineers, has surged as a result of the growth of big data. The pool of talent is growing despite the fact that demand continues to outpace supply. This is due to higher salary, improvements in university computer science curricula, a rise in the number of free online AI resources, and private sector training efforts.

Advanced procedures and a competent workforce are combining forces to create an environment that will unlock efficiency in the value-adding sectors of finance. Following this directive, CFOs can:

  1. Focus on high-end automation instead of low-end automation. Few industry leaders are utilizing machine learning and related cutting-edge technology in “second-wave” automation use cases in capital allocation, financial planning, and audit rather than merely concentrating on mature, first-wave automation approaches like RPA. However, it is important to recognize the intricacy of these technologies. Many businesses have had trouble using AI. To find the best use cases for new technologies, CFOs must heavily invest in their pilot programs and be ready to pivot if their initial efforts are unsuccessful.
  2. Utilize staff time spent on value-added tasks more effectively. The optimum use of the time of the finance team should be to conduct analysis that influence actual business performance. By ensuring that requests for further information are based on a clear comprehension of a set of agreed-upon drivers of firm financial success, leaders can support their staff. CFOs might also establish detailed rules for how finance staff members should allocate their time. Consider imposing a rule that at least 80% of analyses should concentrate on prescribing future courses of action, as opposed to undertaking reactive analysis of historical data to explain previous performance.
  3. Sync up with the rest of the company’s use of AI and machine learning. Over the past few years, the technical environment has altered, with some platforms gaining prominence while others losing customers. A company-wide strategy on which technologies to utilize not only enables more targeted investments but also promotes more cooperation between the finance and other areas.
  4. Give employees in key positions the experience, mindset, and power they need to have an impact on the company. Even if cost reduction is a continuing priority, staff members still require ongoing skill development to effectively play the roles of advisors and counterbalances to top executives in directing the financial course of the company. For employees in senior FP&A and finance business-partnering roles, skill development is crucial.

Find Ways To Incorporate Additional Capabilities In The Finance Operational Model

In order to focus on the more urgent issues affecting their business, finance organizations are moving toward a new operating model that enables employees to change their job swiftly and dynamically. This necessitates not only a different method of task organization but also a different kind of financial specialist.

The new financial operating model starts from a leaner core, with tighter data standards, new data-management techniques, enhanced automation, and integration with a wide range of associated digital technologies, to reduce the work involved in operational operations. Several adjustments must be made in order to implement this paradigm. Create flat networks of teams instead of traditional hierarchies. The network model enables business partners in finance to access a pooled pool of analysts who are allocated to particular work items in accordance with clearly stated and accepted business priorities.

To provide deeper insights into company difficulties, mobilize temporary teams. The establishment of sprints to discover, create, and implement financial analyses that offer insights into business difficulties is one example of how agile working concepts are applied when building this capacity. Integrate digital capabilities throughout the finance department. Developing bot algorithms, leveraging analytics software, or understanding how to transform company data into useful insights are a few examples of these competencies.

Create a core of financially aware business leaders with the authority to interact with firm executives on a peer basis. Strengthening job rotations within finance as well as between finance and the business creates a pool of qualified individuals with easy access to other areas of the company. One automaker mandates that executives rotate through a minimum of two divisions, two financial departments, and two countries before moving up to senior positions. Senior finance leaders must rotate through non-financial positions at another automaker. The key distinction between the two scenarios is the focus on developing operational, leadership, and technical financial capabilities.

By creating a strict, open competency matrix, you may strengthen your financial skills. This thorough collection of standards enables managers and individuals to select between clear capability-building measures to support career advancement, helping to anchor talks about finance talent in objective criteria. For instance, advanced practitioners in a certain skill set would be obliged to devote at least 10% of their time to enhancing the abilities of other employees.

Create both formal and informal rewards for developing your skills. Examples include openly defining targets for internal promotions to pay for leadership roles, connecting incentives to knowledge and capability development, and publicly rewarding managers who grow their teams’ skills through coaching.

At the forefront of effectiveness, finance leaders provide much more than just the fundamentals of finance; their work daily directs how the entire organization operates. The next-generation finance function can develop the insights, performance, and planning capabilities leaders will need to support dynamic decision-making over the coming ten years by focusing on four key imperatives.

Alibaba Cloud Unveils Financial Service Solutions to Advance Industry Digitalization

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18 January 2023

Cloud-native products grow Singapore’s Green Fintech ecosystem.

Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group, today launched its suite of Alibaba Cloud for Financial Services solutions comprising over 70 products, to empower financial service institutions (FSIs) of all sizes with cloud computing infrastructure and enable a more transparent, efficient, and inclusive Green Fintech ecosystem. This is also in line with the Singapore government’s latest financial industry roadmap to catalyze Asia’s transition towards net-zero through Green Fintech.

To achieve ESG commitments in FSIs’ portfolios, migration to the Cloud from on-premises infrastructure became indispensable to accelerate growth and scalability whilst significantly reducing environmental impact. Moving to cloud can help FSIs reduce the carbon footprint of their IT operations, enhancing overall operational efficiency and therefore reducing cost.

Alibaba Cloud’s Financial Services solutions will support the entire digital journey of FSIs and give them easy access to cutting-edge cloud-native technology. They provide five core capabilities covering over 20 business scenarios to improve FSIs’ operational efficiency, customer experience, security, and compliance posture:

  • Robust and elastic cloud infrastructure, which is designed for FSIs to access Alibaba Cloud’s leading infrastructure, enables FSIs to effectively manage the day-to-day operations and the expansion of their digital capabilities with built-in cloud governance.
  • Security and Compliance solutions give FSIs confidence that they are operating in compliance with regional and industry-specific security and regulatory requirements.
  • Agility in business application development offers a wide range of financial-grade cloud tools, middleware, and distributed database for developing cloud native applications, as well as the ability for FSIs to manage workloads through Alibaba Cloud’s public and hybrid cloud platforms, their own premises or via multi-cloud environments in a scalable and flexible way.
  • Digital onboarding and servicing leverages various software as a service (SaaS) and hybrid cloud deployments to support mobile and digital operations, remote video-based sales platforms, and electronic know-your-customer (eKYC) solutions, which helps financial institutions verify and onboard users online anytime and anywhere.
  • Customer insight generation and analytics solutions harness AI, blockchain, machine learning, and data analytics to help FSIs analyze and visualize omni-channel digital engagement intelligence, aiding the discovery of customer insights and enabling intelligence-driven decision-making.

“Our new solutions have been built in response to growing demand from FSIs around the world for cloud products capable of accelerating their digitalization and enhancing the customer experience,” said Raymond Xiao, Head of International Industry Solutions and Architecture, Alibaba Cloud Intelligence. “By leveraging our extensive cloud capabilities and industry know-how, we have developed a comprehensive suite of solutions to advance growth and innovation in the finance sector. We look forward to further expanding our product offering as well as the geographic coverage of our services to support more FSIs in the future.”

“On top of meeting the rapidly evolving customer expectations, we are seeing a growing demand for cloud among FSIs in Singapore is coming on the back of increasing need to reduce carbon emission and improve their green credit ratings. We believe promoting the transition to the cloud is a critical measure for achieving carbon reductions and efficiency enhancements to benefit a company’s profit and loss statement (P&L), elevate its brand values and deliver on its sustainability promises. Alibaba Cloud Financial Solutions support FCIs of all sizes on their sustainability path through infrastructure digitalization, and ultimately promote a green financial ecosystem in Singapore,” Dr Derek Wang, Singapore General Manager, Alibaba Cloud Intelligence.

A trusted partner to FSIs in Singapore

A recent survey commissioned by Alibaba Cloud found that the financial service sector’s top priorities in the Asia Pacific were to accelerate multi-cloud migration, increase automation and build analytics platforms.

Alibaba Cloud’s financial service solutions are designed to help FSIs overcome challenges and meet their strategic priorities.For example, China CITIC Bank International (CITIC), a leading Hong Kong-based commercial bank, was looking for ways to enhance its flagship mobile banking platform “inMotion”. By leveraging Alibaba Cloud’s Mobile Platform-as-a-Service (mPaaS), CITIC’s remote banking services, including real-time eKYC and video-based sales are now operating seamlessly on customers’ mobile devices without geographical restrictions.

“Alibaba Cloud’s mPaaS simplifies our application development process, and the application is lighter and smoother to use, which significantly improves the user experience,” Ji Jinxiang, Chief Information Officer, China CITIC Bank International Limited, said, “We have been working with Alibaba Cloud, and we look forward to implementing other technological innovations to increase our operational efficiency and customer satisfaction through our multifaceted collaboration.”

Rapidly growing FSIs are also seeing value from cloud solutions. Tiger Brokers is a leading online brokerage with a focus on bringing smart and accessible global investing. With the need to protect its core business intelligence and maximize the potential to scale according to business growth, Tiger Brokers partnered with Alibaba Cloud for its comprehensive product suite to fortify security at its infrastructure from network, systems, database, monitoring to mailing layers, and boost the network performance and availability.

“Instantaneous communication and notifications are critical to our clients who are spread out globally. The SMS and Direct Mail products are an essential add-on from Alibaba Cloud to keep the flow of communication alive, and also to upsell and cross-sell other services. As a broking service, network availability, performance, and protection from cyberattacks are critical to our peace of mind. Alibaba Cloud is the right partner as it has provided security to us at every level,” said Kelvin Liu, Vice President of Technology at Tiger Brokers.

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.

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