A Model for Advancing Financial Reporting Processes


25 April 2023

If you are part of a top financial planning and analysis (FP&A) team, you probably have at least one degree in finance, accounting, or business, and perhaps an MBA.

I’m guessing you don’t have a degree in email management for requesting and compiling information from colleagues and then tracking the status of those requests. Or, a degree in copying and pasting text and data. Or, deciphering handwritten edits and formatting charts and graphs in the right shade of blue.

Yet, that may be part of the regular routine when it’s time to create monthly management reports or execute year-end financial reporting.

A financial close with room for improvement might have finance and accounting teams working nights and weekends, with traditional tools limiting the impact of your best analysts, modelers, and problem solvers. With a more ideal close, highly engaged employees would have the right tools to complete their work with time left over for analysis, fulfilling ad hoc requests, and delivering forecasts that can shape the future of the business.

Advancing Financial Reporting Processes

Charting the path from a viable financial close to a more connected, pain-free close is easier with a maturity model. The model can serve as a guide for improving the process for month-end reporting to management, as well as assessing your current financial reporting process.

The development or maturity of a financial reporting process can be gauged by evaluating the level of connectivity between the people, data, processes, and technology involved in the financial close.

My colleagues at Workiva have worked with more than 3,400 organizations to transform reporting and compliance. In our experience, the maturity of a financial reporting process tends to evolve like this, especially from the perspective of FP&A teams:

Level 1: Viable

Siloed teams are focused on simply completing the close. Oftentimes, it means staying late and skipping dinner with loved ones to get things done, even if it’s a few days after a deadline.

Everyone pitches in, but undefined responsibilities can lead to duplicative work, unchecked errors, bottlenecks, and critical gaps if a key team member gets sick, retires, quits, or (gulp) gets called for jury duty. With undefined responsibilities, it’s hard to hold anyone accountable or for individual team members to feel ownership over their work. In fact, their contributions may be limited by legacy systems and software.

In this stage, the organization struggles to define and maintain the process. Oftentimes, management needs to make sure employees don’t burn out.

Getting to the next levelDocumenting the process ensures it is defined, measurable, and easier to scale. Templated workflows establish who does what and on what timeline.

Level 2: Documented

With structured responsibilities and timelines, teams are better able to navigate what is still a complex, manual, time-consuming process for gathering structured and unstructured data, analyzing the information, creating reports, incorporating feedback from multiple reviewers, and delivering updated, mistake-free final results to the C-suite and beyond.

Because the team’s work is measurable and roles are defined, individuals are more engaged, accountable, and proud of their contributions. They are able to execute the process.

There is improvement here, don’t get me wrong. However, teams still consistently work past normal business hours, including the weekends. Team members follow the process but are unable to perform additional value-add tasks that allow the organization to truly understand and communicate business performance.

Getting to the next level: Short of busting the budget to hire more people, investing in technology to take over low-value tasks, like collecting or typing in data, may be the smartest option. After all, you want everyone on your team to feel challenged and fulfilled, not like they’re clocking in for 12 more hours of mind-numbing tasks.

Level 3: Simplified

It’s amazing what a little automation can do.

While introducing new technology can be a bold step, that single investment can transform your team’s entire way of working. And it may not be as painful as you think. If you’ve ever dealt with implementing a new ERP project, you know it can cost upwards of hundreds of millions of dollars—but most technologies will not break the bank, especially when looking at the cloud. (The best ones will also integrate with existing technology investments to capitalize on what you already have.)

Technology can streamline workflow, so team members receive automatic alerts when information is updated, a task is overdue, or it’s their turn to go into a project. Software integrations and APIs allow users to connect directly to systems and for data to automatically flow from those systems to new technologies.

Meanwhile, cloud platforms enable automation, real-time collaboration, and data assurance, meaning more efficiency, accuracy, and control of your process. Instead of babysitting tasks, analysts can focus on developing insights. Instead of spending hours compiling information, they might actually get to go home before midnight. Instead of checking the numbers for the tenth time, analysts can rest assured knowing the numbers are accurate.

You don’t have to integrate the full capabilities of a new technology solution all at once. In fact, many organizations start by introducing new technology or a new platform to one core team first. Just make sure your new software or system can take you where you want to go in the future.

Getting to the next level: As the core team gets more comfortable using new technology, expand its use beyond your department to connect people across divisions, geographic regions, or partners.

Level 4: Enhanced

With software and systems that make it possible to have an enhanced financial close, teams enjoy increased transparency and collaboration. It’s easier to see when, why, and how numbers have changed. Reports created by different teams are more consistent, and there is better data integrity. Software integrations drive connectivity of people, data, processes, and technology that are part of the financial reporting process. Internal and external parties can collaborate more smoothly.

Employees using the full scope of their expertise have higher morale and are more motivated to pursue advancement within the organization instead of looking elsewhere.

Getting to the next level: Explore how to get more out of your technology investment. Connect data to even more reports, spreadsheets, and presentations, even outside of finance and accounting, to your colleagues in the legal, compliance, risk, and marketing departments. Connect your technology investment to each other to create a continuous and automated reporting process.

Level 5: Continuous

Teams with the most mature financial close have connected structured data (like what you find in a database) from multiple source systems and unstructured data (such as text in an email) to their tools for reporting and analysis. This enables data to flow automatically to final reports and presentations for accuracy and consistency, even with last-minute changes. Public companies can also connect the data to earnings scripts, so the CEO and CFO are confident they have accurate, updated information before they hop on an earnings call. Public and private companies and nonprofit entities can connect data to internal reports, board or trustee presentations, covenant reports, and news releases.

A streamlined, defined process means your team can focus on the end results, not execution.

An ecosphere of integrated systems and software encourages natural collaboration, transparency, and a culture of accountability.

Team members are invested in their individual roles as well as delivering strategic insights that influence the entire organization.

Download a summary of the financial close maturity model.

The Takeaway

CFOs and finance teams have a critical role to play in guiding and executing organizational transformation to fully deliver benefits to the bottom line, McKinsey & Co. partners note.

A more mature financial reporting process, with modern technology to connect the finance function to transformational efforts, enables finance leaders to clearly document goals, track progress in real time, and adjust forecasts in a transparent, collaborative way.

How mature is your financial close process? Take the self-assessment.

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Thailand’s Current Financial Landscape And Its Forecast For 2023


10 March 2023

Thailand’s financial landscape and economic outlook are positive, with expectations of continued growth and development in various sectors.

Thailand has been one of the most dynamic and successful economies in Southeast Asia for several decades. With a population of over 69 million, it is the second-largest economy in the region, after Indonesia, and the sixth-largest in the Association of Southeast Asian Nations (ASEAN). Thailand’s financial landscape has evolved significantly over the years, and in 2023, it is expected to continue on its path of growth and development.

The Current Financial Landscape

Thailand’s financial landscape is dominated by the banking sector, which is composed of both domestic and foreign banks. There are currently 34 domestic commercial banks, 16 foreign bank branches, and 23 representative offices operating in the country. The Bank of Thailand (BoT) is the country’s central bank, responsible for supervising and regulating the banking sector, as well as managing the country’s monetary policy.

In recent years, the Thai government has made efforts to encourage the development of the capital market to diversify the financial sector. The Securities and Exchange Commission (SEC) is the main regulatory body for the capital market, overseeing the operation of the Stock Exchange of Thailand (SET), the Bond Market Association (BMA), and the Thai Futures Exchange (TFEX).

The Thai baht (THB) is the country’s currency and has remained relatively stable in recent years. In 2022, it was ranked as the tenth most traded currency in the world. The BoT has maintained a flexible exchange rate regime, allowing the currency to float freely against other currencies.

Thailand’s Economic Outlook

Thailand’s economy is expected to continue its recovery in 2023 after the impacts of the COVID-19 pandemic. In 2022, the economy was projected to grow by 2.8%, and it is expected to grow at a similar rate in 2023. The government’s economic stimulus measures, including public infrastructure investment and tax incentives for businesses, are expected to support economic growth.

The agriculture sector remains a significant contributor to the economy, with rice, rubber, and other agricultural products being major exports. The manufacturing sector, which includes electronics, automobiles, and chemicals, is also an important part of the economy, contributing to about 27% of GDP. The service sector, which includes tourism, is another major contributor, accounting for around 54% of GDP.

One of the key challenges facing the Thai economy is its aging population. The percentage of the population over the age of 65 is expected to increase significantly in the coming years, which could lead to a labor shortage and a decline in productivity. The government has responded by introducing policies to encourage higher birth rates, attracting skilled workers from other countries, and promoting automation and technology to boost productivity.

Thailand’s Financial Forecast for 2023

The financial sector is expected to continue to grow and develop in 2023. The following are some of the key areas that are likely to see growth and change:

Digital banking: The COVID-19 pandemic has accelerated the shift towards digital banking, and this trend is likely to continue in 2023. Thai banks have been investing in digital technology, including mobile banking apps, online banking platforms, and digital payment systems, to offer more convenient and secure banking services to their customers.

Capital market development: The Thai government has been promoting the development of the capital market to diversify the financial sector. In 2023, we can expect to see continued growth in the bond market, with the issuance of more corporate bonds and government bonds. The government has also introduced tax incentives for listed companies, which could lead to more companies going public on the SET.

Economic Recovery: Thailand’s economy is expected to continue to recover from the impact of the COVID-19 pandemic. The government’s economic stimulus measures, including public infrastructure investment and tax incentives for businesses, are expected to support economic growth. The agriculture, manufacturing, and service sectors are likely to continue to be major contributors to the economy.

Fintech: The fintech sector is expected to see continued growth, with the government promoting the use of financial technology to increase financial inclusion and promote economic growth. The use of mobile wallets, digital payments, and peer-to-peer lending platforms is likely to increase.

Aging Population: The aging population remains a key challenge for Thailand’s economy. The percentage of the population over the age of 65 is expected to increase significantly in the coming years, which could lead to a labor shortage and a decline in productivity. The government’s policies to encourage higher birth rates, attract skilled workers from other countries, and promote automation and technology to boost productivity are likely to continue.

Overall, Thailand’s financial landscape is expected to continue on its path of growth and development in 2023. The government’s efforts to promote economic growth and diversify the financial sector are likely to result in continued expansion and innovation in the banking, capital market, and fintech sectors. However, the challenge of an aging population remains, and continued efforts to address this issue will be necessary to sustain long-term economic growth.

In conclusion, Thailand’s economic outlook and financial landscape are promising. Despite the challenges posed by the COVID-19 pandemic, the government’s stimulus measures and ongoing efforts to promote economic growth are likely to support continued expansion in the coming years. The trend towards digital banking and fintech is expected to continue, offering new opportunities for businesses and consumers alike. Moreover, the development of the capital market and the introduction of tax incentives for listed companies are likely to drive increased investment and growth in the stock and bond markets.

However, the challenge of an aging population remains a concern. Thailand will need to address this issue by implementing policies that promote higher birth rates, attract skilled workers from other countries, and promote technology and automation to boost productivity. Additionally, the government will need to continue to monitor and manage the risks associated with high levels of debt and inflation.

Thailand’s financial landscape and economic outlook are positive, with expectations of continued growth and development in various sectors. The government’s commitment to promoting economic growth and diversifying the financial sector, coupled with the resilience of Thailand’s economy, positions the country well for the future.

DigitalCFO Asia Virtual Masterclass – How Finance Transformation Can Help CFOs Navigate Today’s Business Uncertainty | 21 Feb 2023


Media Partner:

Event Synopsis:

Finance teams need a new organizational playbook.

Today’s CFOs are operating in a very different world than they were just three years ago – one in which they are expected to steer their organizations through soaring inflation, volatile market conditions, supply chain challenges, and global disruption.

They must be prepared to act, pivot, and sometimes re-pivot with speed and precision – using data to create value (or preserve it) for their shareholders and stakeholders.

While financials are the backbone of every business, and modern financial solutions and services are essential to power business growth and viability, how can finance leaders truly future-proof the finance function in an increasingly digitized world that is complicated by global headwinds?

Join DigitalCFO Asia and Workday in this exclusive masterclass on how finance transformation is shaping the future of the function and why it is imperative that organizations leave behind the limitations of traditional methods and adopt a digitally-enabled growth and strategy to help finance departments function more efficiently and optimally.

Learning Points:

1. Which factors should an organization take into account when determining if it is ready for and in need of finance transformation to navigate business uncertainty?

2. How to create a strategic roadmap to approach finance transformation in today’s volatile business environment?

3. What are the primary concerns that need to be addressed before and during the implementation of finance transformation processes such as digitization and automation?

4. How can organizations get most optimal return on investment from finance transformation after its implementation?

5. What do you think are the possible finance transformation opportunities in the next five years?

Who Should Attend:

CFOs, Financial controllers, Heads of FP&A, FP&A Professionals, Senior Finance Manager/Finance Managers, Finance Business Partners

ICAEW: Asia’s Economic Outlook in 2023 – Gloomy Start but Not for Long


Experts and analysts have warned of an impending recession come 2023. Inflation is affecting many on a global scale due to various socio-economic factors, particularly the Russia-Ukraine conflict and supply chain disruptions. The rise in commodity prices and freight rates have since been corrected, south-bent due to a sharp decline in consumer demand. Though there is a clear indication that a recession is due, Asia is expected to stand strong amidst a gloomy outlook.

Supply chain hurdles caused by the pandemic and political conflicts have caused a drastic increase in freight rates and commodity prices. However, these prices have since dropped significantly following a massive decline in consumer demand. Nevertheless, inflation is only set to drop back slowly as prices are still relatively higher than in past years. However, given the economic landscape, monetary policy reversal is not expected to make a fast return any time before 2024, as central banks try to avoid fuelling inflation and compromise to anchor expectations in the long term.

At the global level, the economy is expected to face a decline for the first two quarters in the coming year. However, this comes with a silver lining as the recession is estimated to be milder for almost every economy as compared to past recessions in history.

Despite a potential turn for the better in the second half of the year, Asia’s export-oriented manufacturing is expected to take a full hit in 2023. Korea and Taiwan will be expecting to see a sharp drop in their growth in merchandise export values by a steep 40%, with ASEAN countries faring slightly better at a drop of 20%.

Emerging economies in Asia outperform in manufacturing production, while Singapore faces a dip

Advanced economies (e.g., Singapore, Korea, New Zealand, Australia and Taiwan) are facing a dip in manufacturing production whilst emerging economies (e.g., China, Indonesia and Thailand) are outperforming in comparison. This is partly due to the delayed opening of these borders which contributed to an increase in domestic orders, leading to above-average performance. However, this is unlikely to sustain given the implementation of loosened restrictions and reopening of borders. In general, the dip of manufacturing production in advanced economies will ultimately hinder Asia’s production growth. 

Tourism recovery in Asia continues but at a slower pace

One of the key pillars of growth, tourism, has been expected to make a comeback from the world’s transition into an endemic. From 2019, Asia Pacific has witnessed a sharp decline in the number of international arrivals but has since been on the journey of recovery, with just slightly under 20% decline predicted for 2024 in comparison to 2019’s arrivals before the pandemic happened. However, the growth in tourism is expected to face slack in 2023 unlike the vast improvements seen in 2021 and 2022 when the borders first reopened.

Long-term growth prospects remain positive

China’s plus one strategy, which involves the diversification of business investment and supply chain ecosystems, have proved vital to the growth of ASEAN’s economy. Placed favourably in the ecosystem diversification, Malaysia for instance, is well-placed to pick up mid to high-value supply chain systems with Indonesia looking to catch on aggressively. In addition, countries like Vietnam remain a paramount source of labour-intensive manufacturing and production. As such, ASEAN is expected to still see promising growth in years to come.

“The global economy is facing new headwinds, partly due to Russia’s invasion of Ukraine, but also to changes in the wider economic, social, and political landscape. Just as economic activity was picking up with many businesses adjusting to new ways of working and benefitting from pent-up customer demand, we now see that spiralling energy costs and input costs, high inflation and weak consumer confidence are predicted to lead to a global recession. Our institute and members will be at the forefront as we help businesses and economies through these difficult times, much like how we did during the COVID pandemic,” said Julia Penny, President of ICAEW during her opening address.

Key findings from the economic forecast were presented by Priyanka Kishore, Head of India and South-East Asia Macro Services, Oxford Economics at the ICAEW Economic Insight Forum Q4 2022 on 1 December 2022. 

She was joined by other panellists, namely Nik Shahrizal, Risk Assurance Partner, PwC Malaysia, Reuben Wales, Head of Financial Services, ICAEW, and Wael Mansour, Senior Economist, World Bank Group, in an insightful panel discussion about economic transformations that countries may face following elections, long term investment decisions, rising interest rates and inflation. The discussion also delved into the challenges faced when transiting to net zero, noting that many steps were needed to reach the net zero goal by 2050. In addition, there were talks and questions raised on the potential incentives that businesses are looking from the governments, suggesting that these could influence their journeys in green transitioning.

Other findings from the Economic Insight Forum Q4 include:

·       Easing of China lockdowns will provide a modest boost

Though we have seen the unpredictability of lockdowns and extreme measures to curb infection rates in China, China is still expected to provide some boost to the region’s economy after witnessing a steady increase in Personal Consumption Expenditure (PCE) since the peak of the pandemic.

·       A significant growth slowdown is in the offing for 2023

Across all Asian countries, the growth in GDP has significantly slowed down. Among these countries, Singapore stood out with the slowest projected growth of 0.7%. In addition, Singapore is the only country to witness a declining growth trend for the past three years since 2021.  

View the on-demand recording of the ICAEW Economic Insight Forum Q4 2022 here

DigitalCFO Webinar Series – Optimizing Cash Flow And Liquidity In 2023 | 8 Dec 2022


Media Partner:

Event Synopsis:

Treasurers are entering 2023 with a clear agenda to improve free cash flow and build financial resilience against market volatility and a potential economic downturn. This requires a new set of practices, built upon data insights and analytics, to unlock new sources of cash flow and make more real-time liquidity decisions.

Join DigitalCFO Asia and Kyriba and expert panelist from Animoca Brands and KPMG in this exclusive webinar on how finance teams are changing the ways they can optimize liquidity, proactively managing cash conversion and working capital, and how treasury decision making is accelerating to real-time with data-driven liquidity tools such as APIs and AI.

Discussion Points:

– Improving cash forecast accuracy to create liquidity opportunities

– Reducing reliance on spreadsheets

– Moving to real-time treasury for both liquidity and payments

– Integrating data insights and analytics into treasury processes

– Building a digital transformation playbook

Who Should Attend:

CFOs, VP/SVP Finance, Finance Directors, VP of Treasury, Director of Treasury, Head of Treasury.

View the DigitalCFO & Kyriba Webinar – Optimizing cash flow and liquidity in 2023 schedule & directory.

Wrap In Finance: 2022’s High Inflation Environment


Fatihah Ramzi, DigitalCFO Asia | 28 November 2022

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

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

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

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

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

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

Many Frontier Markets Faced Defaults & Difficult Restructuring

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

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

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

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

Policy Recommendations

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

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

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

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

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

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

Businesses Must Stay Vigilant Amid More Challenging Financial Conditions


Fatihah Ramzi, DigitalCFO Newsroom | 25 November 2022

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

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

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

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

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

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

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

Global Risks Intensified

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

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

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

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

Companies Remaining Resilient

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

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

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

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

Importance Of Investing In Trend Prediction


Fatihah Ramzi, DigitalCFO Asia | 24 November 2022

With the help of trend predictions, businesses can save money by not investing in products that might not appeal to their target market and instead focus on developing goods and services that fulfill the needs and objectives of their consumers.

Business executives that embrace and uphold best practices for financial forecasting or trend prediction are better equipped to expand their businesses and handle unforeseen setbacks. Despite the fact that it is difficult to accurately forecast the future, as the COVID-19 pandemic has shown, the organization has a better chance of adapting if it can properly hedge against the worst-case situations.

The truth is that businesses don’t become well-capitalized, with solid balance sheets and positive cash flows by accident. Rationally analyzing data, being intimately connected with the business, and having the most recent customer and market insights are all essential to financial health. In prosperous times, finance teams that perform accurate forecasts benefit from the company’s success. According to data analytics, business executives are aware of how their finance teams’ careful planning helped them survive a very trying time.

Trend Prediction

By analyzing the past and the present, forecasting is the process of predicting what will happen in the future. Based on anticipated demand for products or services, it serves as a planning tool that enables organizations to respond to unpredictability.

A solid financial forecast or trend prediction includes both macroeconomic considerations and circumstances unique to the organization. Trend prediction is a financial plan that estimates the likelihood of certain disruptions occurring that could affect future income and expenses of a corporation. A comprehensive projection includes, but is not limited to, short- and long-term outlooks on variables that may have an impact on revenues and backup plans for expenses not now considered required.

Organizations that provide accurate financial trend predictions rely on model-building professionals, either employees or consultants, and combine their work with input from individuals who have a thorough grasp of the organization, the sectors it serves, and the communities it works in. Similarly, data collection and software are crucial to the financial forecasting process.

Importance Of Predicting Trends

Trend predictions are crucial for corporate planning, budgeting, operations, and funding; they merely assist executives and external stakeholders in making wiser decisions. A financial projection is an estimation of how much money a firm will make in the future, and it’s an essential step in creating the annual budget. It guides important financial choices like whether to fund a capital project, add employees, or attract investors. Business balance sheets and other disclosures provide significant information from their predictions.

Trend predictions give firms access to unified reports, enabling finance departments to set realistic and doable company goals. Additionally, it offers management important information about past and projected performance of the company. Financial predictions are crucial in investor relations and loan applications, in addition to guiding internal fiscal controls and choices. Predictions are taken into account in the decision-making processes of banks and other funders. Startups are also not exempt. As described, financial projections are a crucial component of any new business plan.

Benefits of Trend Prediction

Along with the previously mentioned practical advantages, creating a financial forecast compels finance teams and line-of-business associates to pause and consider the worth of rolling predictions.

CFOs must decide whether to employ a rolling model or project out a certain number of months. Will the projection be incremental, expanding on last year’s, or will the company start with a clean slate? Which potential new product lines need to be included in a formal prediction since facts supporting their viability exist?

With trend prediction, CFOs can confidently approve a new capital project based on data, make wise judgments even when under time pressure, and have better success securing finance or attracting investors.

Types of Trend Analysis

Numerical data are used to compute trend analysis. It usually consists of historical data, either conventional data (such as a company’s success as reported in its publicly available financial records) or alternative data (such as the number of job openings made by a rival in the previous five years). You may spot three different types of trends when you add numerical data to a chart.

Upward Trend

The company’s data points are growing, which is what an upward trend signifies. This could indicate different things depending on what kind of variable you’re looking at and what you’re trying to accomplish. For instance, if you are a business owner and are looking at the cost of the raw materials needed to make loaves, you see that the cost is rising. You may predict several outcomes using this knowledge, such as rising costs for your company or the requirement to increase ultimate consumer pricing.

At the same time, if a shareholder observes an upward tendency in the share price of a business, it could influence them to buy the company’s stock. An increase in a stock’s price typically denotes a positive situation, assisting you in deciding whether the investment would be wise.

Downward Trend

On the other hand, a downward trend shows that the value of your variable is declining. For instance, if a company’s earnings fall sharply, investors may need to exercise caution since the stock is hazardous because the price is falling. This is true if other economic or financial variables are trending downward. When researching financial assets, investors might perform trend analysis on the asset’s historical data. If the price is falling, a bearish market is present. In other words, investing is not advised in this situation because it could result in a loss if prices continue to fall.

Horizontal Trend

Finally, stagnation is indicated by the horizontal line. In other words, neither the prices nor any other measures are increasing nor decreasing; instead, they are remaining unchanged. In reality, a flat trend may rise for a time before pulling a trend reversal, attaining an overall steady general direction. It’s dangerous to base investment decisions on horizontal trends because you never know what will happen. If you do decide to go ahead with it, you must undertake a detailed income and expense analysis regarding the sales regions to determine the dangers.

With the help of trend predictions, businesses can save money by not investing in products that might not appeal to their target market and instead focus on developing goods and services that fulfill the needs and objectives of their consumers. By taking into consideration market demands, product popularity and improving their chances of producing something that their consumers will like, this can help organizations save time and money. This enables companies to capitalize on consumer preferences by spotting market possibilities as they materialize.

Indonesia 2023 GDP Growth May Slow To 4.4%


DigitalCFO Newsroom | 21 November 2022

Indonesia’s annual economic growth may slow to 4.37 per cent next year partly due to the impact of domestic monetary tightening.

Indonesia’s annual economic growth may slow to 4.37 per cent next year partly due to the impact of domestic monetary tightening, the country’s central bank (BI) governor told a parliamentary hearing on Monday. In last week’s policy meeting, BI maintained 2022 GDP growth forecast biased toward the upper end of 4.5 per cent to 5.3 per cent.

BI Governor Perry Warjiyo gave the GDP forecast as part of a discussion with parliament on the central bank’s 2023 budget. Warjiyo said predicting economic indicators was difficult due to volatility in the global economy, adding that the numbers could be discussed further with lawmakers. The governor also gave a headline inflation forecast of 6.11 per cent for end-2022 and 3.61 per cent for end-2023 at the hearing. His presentation showed the figure for 2022’s inflation were BI’s forecast as of Nov. 3.

Warjiyo last week said BI expected a headline inflation rate of 5.6 per cent at the end of the year. He did not explain why the figures were different and BI’s spokesperson did not immediately respond to a request for comment. Last week, BI raised its key policy rate for a fourth consecutive monthly meeting in a move aimed at anchoring inflation expectations, which the governor said was “too high”. In total BI has lifted interest rates by 175 basis points since August.

Indonesia’s annual headline inflation rate cooled to 5.71 per cent in October, but remained near a seven-year high of 5.95 per cent in September. BI’s inflation target is at range of 2 per cent to 4 per cent. BI’s deputy governor Dody Budi Waluyo said on Friday inflation may decelerate further this month to 5.5 per cent. Warjiyo is expected to lay out BI’s policy guidance for 2023 at an annual gathering with financial stakeholders on Nov. 30.

Source: Reuters

Unto The (Data) Breach – The Best Defense For SMEs & Startups


Fatihah Ramzi, DigitalCFO Asia | 21 November 2022

Kevin Foo, Head of Cybersecurity at Exabytes

According to a survey conducted by the CyberRisk Alliance’s Business Intelligence Unit, about 2 out of 3 businesses in Singapore experienced at least 6 cyberattacks in 2021, with almost half of businesses not being able to respond within 24 hours. That delay in response is major too, as that delay caused these incidents to evolve into full on data breaches in almost 3 out of 4 cases.

As the world becomes more and more dependent on technology and information systems, cybersecurity has become critical for anyone to carry on with their daily lives. Despite that, most corporations are still clueless on how to manage cybersecurity, and are scrambling to prepare their defenses. Even big companies, such as Starbucks, Sembcorp Marine, and Samsung, are no longer safe from data breaches. And if these players, with their massive capital and resources, are having a hard time, what hope do small online businesses have?

To find out more about how SMEs’ can safeguard their data from cyber attacks, DigitalCFO Asia spoke with Kevin Foo, Head of Cybersecurity at Exabytes who believes that the best defense is to educate the public on cybersecurity and how to safely conduct business online. Hence, Exabytes wants to educate both its users and SEA as a whole on the dangers of cyberattacks, and what small startups, SMEs, and businesses can do to protect themselves.

Common Types Of Cybersecurity Threats That SMEs Encounter

SMEs commonly encounter cyber threats that hinder their ability to conduct business online, and can lead to severe disruptions of services. These types of cyber threats include:

  • Malware Attacks, where malicious software (i.e. including worms, spyware, adware, and trojans) is uploaded into your system.
  • Phishing attacks, wherein an attacker impersonates a contact and sends the victim fake mails to steal credentials, confidential information or trick victims to install malware.
  • Ransomware attacks, where a type of malicious software is used to encrypt the victim’s files or disables basic system functions. Threat actors will then extort ransom payments in exchange for encryption keys to decrypt files or restore system functions. 
  • Distributed Denial-of-Service (DDoS) attacks, where attackers target systems, servers, or networks, flooding them with volumetric traffic to exhaust their resources and bandwidth. When this happens, online servers get overwhelmed, resulting in the business website either shutting down or slowing down.

Strengthening An SME’s Cybersecurity With All-In-One Business Cloud

As enablers for online businesses, it is crucial that service providers like Exabytes understand the cybersecurity needs of both users and the broader startup/SME community to develop solutions that can assist them, especially in this more tech dependent age. Exabytes, as an All-in-one Business, Cloud, Digital and Ecommerce solutions provider, has experience with cybersecurity products such as:

  • Acronis Cyber Protect, 
  • Sucuri Website Security,
  • SSL Certificate,
  • SpamExperts

“We believe, with the right solutions and support, SMEs can be better protected against cyberattacks,” says Kevin Foo, Head of Cybersecurity at Exabytes.

It is essential that newer and smaller companies have the assurance to do their business online effectively and safely, without the threat of cyberattacks happening to them.

SMEs: Safeguarding Their Infrastructure & Continuity Of Operations With Minimized Threats

Regardless of market conditions, there are 2 important aspects of Cybersecurity that SMEs can look into to safeguard their infrastructure and ensure continuity of their business operations – human and technology.

Humans are always considered the weakest link in Cybersecurity. Considering that some cyberattacks hinge on social engineering, it is important to educate employees to create a risk-aware culture within the workplace and basic skills on Cybersecurity to protect themselves.

  • Conducting training sessions will ensure that employees use only approved software and do not click a link directly from the email.
  • Employees should not visit suspicious websites and always verify their legitimacy of a website by checking TLS certificate information.
  • Ensure VPN is used whenever accessing company infrastructure.

SMEs can better protect themselves by adopting security technologies.  Companies can enforce strong passwords with Multi-Factor Authentication (MFA) to further secure business accounts. On top of that, they should regularly update operating systems and applications, as that will eliminate vulnerabilities that hackers can exploit. 

Additionally, they should implement layered protections to software and systems, such as endpoint protection software, firewalls, Web Application Firewalls (WAFs), intrusion prevention systems (IPS), email protection, access control, application security, etc. Companies should also consider deploying a data backup and recovery strategy and regularly testing on restoration to ensure business operational resilience. Protect data in transit with the use of encryption such as Transport Layer Security (TLS).

The First Line Of Action For SMEs Who Are Facing Security Breaches

A security breach occurs whenever any unauthorized user circumvents security control measures to access restricted systems or data. 

“No one is spared from a security breach, no matter how strong your defenses are,” says Kevin Foo, Head of Cybersecurity at Exabytes.

Thus, it is important to learn how to handle security breaches. Below are just simple steps for reference:-

  1. Keep Calm

It is stressful handling security breaches, as there are stakeholders to be managed, and may potentially lead to financial losses for the company as a whole. Nonetheless, the incident should be managed in a calm and professional manner. Panicking will only make the situation worse.

  1. Identify what was breached and eliminate threats

When did the security breach happen? How did the threat actor get into the system? Was it financial data? Was it customer data?

These are some questions SMEs should ask after a security breach. It is essential to assess which system or data was breached. Systems should be secured or taken offline to prevent further security breaches. Remote access should be restricted and credentials should be changed. 

  1. Keep information transparent

When a security breach happens, SMEs should not keep the breach a secret. Instead, it is critical to provide transparency on the breach. If notification to authority is required, SMEs should provide all the relevant information. Ideally, they should also create a team to handle the incident. This may involve lawyers, members of their human resources team, members of their communications department, as well as the SME’s management team.

  1. Get expert’s help or follow incident response plan

Typically, SMEs and startups have fewer resources and less sufficient technical expertise in handling security breaches. Thus, it is a good idea to seek external expert help (i.e. an Incident Response service) for proper incident handling. If an SME has an incident response plan, it is the time to put it into practice and update the plan accordingly as it will be a guide in the future.

  1. Enhance security controls

Restore the service with the vulnerability fixed, and work to continuously improve security controls or add layers of defense to better protect the system and data. This can further minimize the cyber threats.

Charting Holistic Development In The Fields Of Business And Accountancy


DigitalCFO Newsroom | 16 November 2022

Crowe Singapore has awarded two Ngee Ann Polytechnic students with its inaugural Crowe Scholarship, which aims to motivate outstanding students to make an impact in the society and the fields of business and accountancy.

Through the scholarship programme, Crowe hopes to nurture creative, reflective global citizens and talents who are keen to lead the future of accounting in the fast-evolving digital landscape. Apart from promoting academic excellence, the three-year scholarship programme offers career and holistic development opportunities through internships with Crowe and mentorship by Crowe professionals.

Two Year 2 Ngee Ann Polytechnic students from the School of Business and Accountancy – Mr Jonathan Chaw Junxi and Ms Kelly Ker Sze Yee were awarded the scholarships last Friday, 11 November 2022, at Crowe Singapore’s 20th anniversary celebrations dinner.

“The accounting profession has been evolving for decades, driven by disruptions, the acceleration of digitalisation and the use of artificial intelligence. To keep thriving, the future of accounting means embracing change – by moving away from simply compliance-driven work to being a well-rounded trusted business advisor to clients,” Mr Tan Kuang Hui, Chief Executive and Managing Partner of Crowe Singapore, said. “We are pleased to launch the Crowe Scholarship, in partnership with Ngee Ann Polytechnic, to support young talents who are keen to take up this challenge in the accountancy and finance industry and serve with the highest level of integrity. We congratulate the two deserving students, Jonathan and Kelly,who have not only excelled academically but have impressed us with their meaningful contributions to the community.”

Ngee Ann Polytechnic, Mr William Lim, Director for the School of Business & Accountancy, said, “As a testament to Crowe Singapore’s business acumen and foresightedness, we are honoured that Ngee Ann Polytechnic has been selected to be a key partner in grooming talents for tomorrow. These scholars will be provided with meaningful internship and mentorship opportunities to develop their skills at Crowe Singapore, to guide their career development.”

The two newly minted Crowe scholars hope to make an impact in the industry. Mr Chaw commented, “I am very honoured to receive this scholarship and thankful to have the opportunity to learn and work with leading accounting professionals. I hope to gain greater insights about the industry, sharpen my people skills and expand my professional network. Crowe’s core values are very much aligned with my own. After my internship with Crowe, I hope to share my newly learned skills and industry knowledge with my peers so they can make positive impact on their careers as well.”

Ms Ker added, “I am extremely grateful to be a recipient of the Crowe Scholarship which will support my professional development in several ways. With this scholarship, I hope to further enhance my interpersonal skills and accounting knowledge, so I can make key contributions to the accounting industry in the future.”

Founded in 2002, Crowe Singapore is a fast-growing, full-fledged professional services firm. A member of Crowe Global, which is the 9th largest global accounting network by revenue, the Singapore firm leverages its core strengths in audit, tax, risk advisory, accounting and fund administration to provide a full suite of professional services, serving the needs of public-listed entities, multinational corporations and financial institutions. The firm has recently expanded its offerings to include digital advisory, sustainability and cybersecurity services.

A bursary programme, Crowe Student Aid Grant, has also been launched to support Ngee Ann Polytechnic students from low-income families through financial assistance and mentorship opportunities. The grant is a top-up to the government bursary (for Singapore citizens) that will allow for full coverage of the annual tuition fees and supplement other study-related expenses. Beyond financial aid, the student aid grant recipients are encouraged to engage in mentorship opportunities offered by Crowe. Such engagement includes conversations to broaden the students’ worldviews and assist them to make more informed career choices.

APAC’s New Distributed Workforce Economy


Fatihah Ramzi, DigitalCFO Asia | 14 November 2022

Pedro Barros, VP of Finance at Remote

The advantages and disadvantages of remote work were already being discussed before COVID-19. Although some businesses had already created their organizations with purely remote work in mind, many others remained wary. When the COVID-19 pandemic struck, organizations that had not previously permitted flexible working arrangements were forced to quickly put up their remote working infrastructure, both technologically and culturally, in order to maintain operations.

Companies should build upon this new standard rather than revert to their antiquated ways since so much rigor and work went into refining remote working during that time. In many ways, businesses must accept this new standard because failing to do so will probably result in them losing their employees to other companies.

Remote is a company that believes in global talent employment and seeks to unveil the world of remote work for every person, business, and country. With over 900 internal employees, their entire team works remotely in their chosen locations around the world; passionate about what a game-changer it has been.

To find out more about remote work, DigitalCFO Asia spoke with Pedro Barros, VP of Finance at Remote.


2022 Workforce Challenges In APAC

The ‘forced remote’ of the pandemic is now giving way to a permanent shift to flexible, remote work. Some companies are already there, but the transition could be challenging for some companies to navigate. The change is being driven in part by employees who have higher expectations for independence and flexibility. In Remote’s newest Global Benefits Report, people ranked flexibility as one of their most important employment benefits – and workers who are already remote actually ranked flexibility as more important than compensation. 

However, it is also being driven by companies that have discovered that remote work offers significant competitive advantages. They can tap into a much wider talent pool, especially for hard-to-fill roles. They can build a more diverse and inclusive workforce. They can achieve global coverage in servicing clients. All of these factors mean that remote work is becoming more than just a convenience. It is a way for innovative companies to attract and retain talent, and compete and win on a global level. Those who are unable to evolve as quickly as their competitors could end up being left behind. 

The Possibility of A One-type-fits-all Approach To Hybrid Work

“With the right approach, there’s an opportunity for any department to work effectively in a remote setting,” says Pedro Barros, VP of Finance at Remote.

This can be in hybrid or entirely remote models. Remote, has no physical offices, so their finance team is fully remote and distributed across multiple continents. In order to succeed as a remote team, especially one that is global, businesses need to view remote work not as an exception to the norm of daily working life, but instead think “remote-first.” 

To be remote-first means treating remote work, and the needs of remote workers, as the default way of working. Transparency, documentation, communication, and trust are all critical so that everyone is equally empowered to do their best. This does not mean that everyone has to be remote and no one can work in an office. It simply means that everyone learns to communicate in a way that makes it equally easy for co-located and remote employees to do their best work.

Obstacles In Hiring Remotely

Hiring and working remotely means that teams can become more distributed geographically, including across international borders. 

“It is no longer necessary for your entire team to live in the same city or even the same country or continent,” says Pedro Barros, VP of Finance at Remote.

The biggest obstacles that are preventing this from being more common are the practical challenges involved with employing someone who lives in a different country – how to pay them, how to provide benefits, and how to manage taxes and compliance. Each of these things can involve expensive, time-consuming processes. That’s why most companies choose to hire only in their own country, even for fully remote roles.

Remote was created to help companies solve this problem. The company serves as an employer of record so that its customers can legally hire full-time employees in more than 65 countries, and give them an easy way to hire, onboard, pay, and offer benefits and stock options no matter where their teams are located. 

The Productivity Rate Of Remote Employees

In Microsoft’s Hybrid Work Report, 80% of employees say they are just as or more productive since going remote or hybrid. Flexible work policies generally lead to positive effects on productivity, and they also have other benefits like allowing employees to prioritize their families, health, and wellbeing. 

“For remote roles, it may be necessary to rethink how productivity is measured,” says Pedro Barros, VP of Finance at Remote.

An unfortunate growing trend in remote work is the practice of monitoring employees to ensure they’re working on their assigned projects at particular times, and tracking how many hours they work in a day. This is completely unnecessary. In many cases, it doesn’t matter how much time someone spends in front of their computer or what time of day they’re completing their assigned work. What is important is that an employee’s output is what you expect from someone in their role. 

Challenges In Hiring Remote Finance Professionals

Similar to recruiting talent in other sectors, the challenges with hiring remote finance professionals comes from the competition for top talent. As remote work creates access to a wider pool of world-class finance professionals, companies must also remember that they are competing for the same talent on a global scale alongside the most successful multinational companies. 

One way to stand out beyond pay and flexible work policies is with employee benefits. In Remote’s recent report, 60% of employees say they have chosen one job over another because it offered a better benefits package. For global remote roles, that means offering localized benefits that are tailored to their specific needs.

Maintaining Employee Well-Being Through Virtual Means

Employee well-being and belonging are part of the foundation of great workplace culture, whether that culture is remote or not. Employers play a large role in the lives of their employees, especially their mental health, so creating a culture of acceptance and trust helps to support people to do their best work. There are a number of ways that a company can support their remote employees’ well-being, including letting people take time off when needed, providing resources and training, and implementing a flexible, asynchronous work schedule. 

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