An Interview with Chia Tek Yew, Head of Financial Services Advisory, KPMG Singapore
FST Media: What are your business and digital priorities for the next 6 months?
Chia: Collaboration has been a key theme in the financial services industry,either with external accelerators who bring multiple start-ups to a bank or within the banks’ regional network itself.
FST Media: What are your business and digital priorities for the next 6 months?
Chia: Collaboration has been a key theme in the financial services industry, either with external accelerators who bring multiple start-ups to a bank or within the banks’ regional network itself, such as using technology like Blockchain for intra-branch cross border payments. Over the next 6 months, our focus is to foster collaboration as a means to facilitate innovation in a practical way. One example of this is our recently launched KPMG Digital Village, a symbiotic ecosystem that matches, fosters and forges innovation ventures between companies and start-ups.
We will also continue to work with our banking and insurance clients to prototype and pilot solutions, and bring together start-up technology along with more established technology platforms such as Microsoft Azure in areas such as Blockchain technologies, the Internet of Things and advanced analytics. In addition to Fintech, the Digital Village will also focus on Heath Technology (Healthtech) and Logistics Technology (Logtech).
FST Media: What technology or innovation is proving to be the single biggest game changer across the financial services industry?
Chia: Many financial services firms are looking at how fintech and other new technologies can be quickly adopted. For example, the potential for Blockchain technologies to be the biggest game changer in financial services is widely discussed. While I believe fintech companies will lead the way, banks will become fast followers and in many cases may even acquire the capabilities of the fintech companies.
FST Media: What are the most significant challenges KPMG faces as innovation increases?
Chia: We are constantly challenging ourselves to innovate, and have continuously looked for opportunities to deploy new technology or solutions in our suite of audit, tax and advisory services. Apart from staying abreast of and constantly evolving with the help of innovative technologies, the challenge will always be to evolve our capabilities alongside the changing needs of our clients in ways that add the most value to their business.
FST Media: What specific insight does KPMG bring to the wider finance sector in Asia?
Chia: The challenges that banks and insurers are facing in Asia are similar to financial institutions in other countries. These include the risk of disruption by fintech companies as well as the need for speed in adoption of digital capabilities by competitors. For example, the large branch and ATM networks of local banks in all countries used to be a huge competitive advantage for local banks and a barrier to entry for other foreign competitors. Today, with digital channels taking on more prominence and digital money reducing the reliance on cash, it is now easier for foreign banks to go after the local consumer clients of the local banks.
Financial institutions with traditional IT systems will find it hard to respond quickly unless they are able to adopt fintech and digital technologies as new enablers in their business, in contrast to the traditional “customisation” approach taken for core technology. Innovation must first be embraced as a culture and an agile environment within the organisation must be cultivated so that digital innovation can thrive.
FST Media: How will the audit process continue to develop in line with digitisation?
Chia: Big data, analytics, social media, mobile and cloud computing are all game changers that redefine traditional products, services and markets, necessitating new business models. The audit business has similarly to keep up with these changes to stay relevant to market needs and play its role in building public trust. Naturally, some parts of the traditional audit business, such as the methodical review of documents will come under threat. However, the demand for independent, trusted third parties to provide assurance to the facts and figures in reporting will not only survive, but thrive.
Besides providing audit opinions on the soundness of algorithms and the security of technology systems, embracing a digital approach will free up professionals to move up the value chain by highlighting potential risks as well as possible approaches to managing the changes that come with technology.
Audit firms are currently remodelling themselves to be future-ready. The scope and structure of auditing work will probably move from routine reconciliation of figures or processes to regular recognition of risks. With more multidisciplinary teams becoming the norm, some auditors will need to acquire skills not only in the traditional finance disciplines but also in data science, computing and the like.
FST Media: How can traditional financial services continue to develop under the threat of digital disruption?
Chia: Whilst fintech companies in the U.S. have positioned themselves primarily as “disruptors” which can either access unbanked markets or can take big chunks of inefficient transactions away from banks, fintech companies in Asia have come to position themselves as enablers to the banking community. As such, digital disruption can be seen as an opportunity for traditional financial services to drive growth through collaborating with Fintech companies. For example, a Fintech company with an analytics-based credit scoring platform may find itself more powerful when deployed as an in-house platform for a bank (or multiple banks) than to set up their own lending platform and have to compete with the banks.
FST Media: What can be done across the finance sector to minimise risk and increase Cybersecurity?
Chia: The finance sector remains one of the most targeted sector for cyber criminals with cyber-attacks becoming increasingly sophisticated and highly targeted. Organisations in this sector are likely to be specifically targeted and need to take a proactive approach to cybersecurity. A key step forward is to adopt an active defence posture with a clear visibility of both internal and external threats. This includes intelligence sharing across the sector. Cyber resilience should also be incorporated into the organisation so that it is ‘safe-to-fail’ while leveraging technology to reduce human failure. Finally, the cyber-security has to be driven as a business agenda so that everyone is clear on the role he or she plays in this.
FST Media: What is the next big thing for KPMG and how will you measure its success?
Chia: Today, most organisations operate as ‘service-based’ businesses that are powered by people. In the near future, we envision businesses transitioning towards being ‘asset-based’, powered by technology and intelligent solutions such as the Internet of Things, Blockchain technologies and telematics. KPMG recognises that such assets can provide the speed and agility, quality, and higher margins demanded by today’s fast-changing landscape, and the measure of our success is in supporting businesses in their transformation journey.
FST Media: How do you build a culture of innovation in your team?
Chia: Innovation does not exist in isolation. We need to recognise that no single organisation has all the answers and hence the need to adopt an open and collaborative mindset in advancing industry-wide solutions. My colleagues in the Digital + Innovation team are encouraged to think like entrepreneurs. They constantly seek out opportunities for collaboration – to facilitate the application of innovation across our organisation and to deploy innovative new ideas which may solve our client’s challenges. This is also the thinking behind our Digital Village initiative and for KPMG Digital labs, which facilitates the development of capabilities and partnerships which empower innovation.
FST Media: What is the best piece of career advice you have received?
Chia: Don't be complacent; stay nimble and innovate constantly.