Speech by Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance and National Development, at The Institute of Singapore Chartered Accountants (ISCA) Professional Accountants in Business (PAIB) Conference 2020, 25 Aug 2020

Seizing Opportunities Amidst Uncertainties

Mr Kon Yin Tong, President of ISCA,

Distinguished Guests,

Ladies and Gentlemen

1.         A very good morning to every one of you. Thank you for inviting me to the ISCA PAIB Conference. It is a pleasure to join you for this virtual event.

2020 – Nobody Got it Right

2.         If you google the Internet and search for past predictions about what 2020 would hold, you will find all sorts of really interesting ones. Some are close, that we will have self-driving cars. Not quite there yet, but we’re in the works. Some are way off. One prediction was that by 2020, computers would be invisible! And some are just bizarre. In the 1900s, Dr Richard Clement Lucas predicted that humans will become a one-toed species, on the basis that our small toes are being used less and less, while the great toe is developing at an astonishing rate! An article titled “12 reasons 2020 will be an awesome year” discusses predictions of a robotic moon base, microchips in the brain controlling neural activity, and commercial space industries. None of them mentioned a tiny microbe that would dramatically change the lives of nearly 8 billion people around the globe today! There was only one line from that article, which was totally and completely accurate – the one which said: “[2020] is going to be one heck of a year”!

3.         Our world has been up-ended by COVID-19.

a.           Lives have been affected. At the time of this recording, there are more than sixteen million confirmed cases of COVID-19 globally. This number continues to rise daily. Europe and Asia are bracing themselves for second and third waves of COVID-19 infections. Some countries are considering re-imposing partial or total lockdowns.

b.Economies have been affected. Lockdowns and border controls have brought economic activities to a grinding halt and affected growth. Internationally, the International Monetary Fund (IMF)’s June 2020 forecasts project global growth to be a negative 4.9 percent in 2020. That is a 1.9 percentage point drop, compared to earlier growth forecasts in April 2020. In Singapore, we also expect significant contractions to 2020 GDP.

c.           Societies too have been affected. Families have been separated. Self-isolation and social distancing have impacted the elderly and vulnerable disproportionately. Globally, mental health cases are on the rise. 

Pushing on from COVID-19 through Transformation

4.         With the trajectory of the pandemic still unclear, the COVID-19 situation remains volatile. The road to recovery looks to be long and tough. But there will be an eventual recovery, as countries re-open their economies.

5.         As we cast our sights ahead, we should remain positive. The lessons from past crises all indicate that new opportunities await the proactive and the agile. According to research by McKinsey, the top quintile of companies extended their lead over their peers, in terms of cumulative total returns to shareholders, by more than seven-fold over the next eight years after the 2008 Financial Crisis.

6.         There are many success stories of companies that have used crises as a rallying call for change and transformation. For example, Alibaba used the opportunities from the SARS epidemic to transform its business model from B2B (business-to-business) to B2C (business-to-consumer) through Taobao. Similarly, start-ups like Uber and Airbnb also seized new opportunities from the 2008 Global Financial Crisis to set up their businesses. They are now household names.

7.         The services sector, in particular, is well positioned to rebound from COVID-19 through innovation and digitalisation.

8.         I am therefore very encouraged to see businesses and accountants adapting to the volatile times.

a.           Many businesses too have innovated. Zouk and Razer recently introduced “cloud clubbing” in response to COVID-19 challenges, allowing partygoers to party and club from home. Similarly, accountancy firms like Kong Lim and Partners are also pushing forward with transformation by using Robotic Process Automation to automate their audit processes.

b.           Many accountants are also charting a new path forward in their careers by investing in upskilling and reskilling. Let me share the stories of two who have done so.

i.            First, Ms Quek. Ms Quek was a home-maker for 17 years. She decided to leverage the Professional Conversion Programme for Internal Auditors to join Portcullis (Singapore) in late 2018. Today, she is responsible for helping Portcullis (Singapore) improve their processes and systems.

ii.           Second, Ms Leow. Ms Leow leveraged ISCA’s Infrastructure and Project Finance Qualification to extend her finance knowledge and gain an in-depth understanding of the infrastructure sector. This prepared her for her new role in advising her company on sustainable green business opportunities.

c.           We should push ahead with these efforts, and leverage on Singapore’s reputation as a trusted and business-friendly financial hub, to position ourselves as a hub for high-valued services.

9.         Let me also say something about two qualities that are needed to get ahead on the road to recovery: Adaptability and Partnership management.

Qualities for Future Opportunities

10.       First, adaptability.

a.           COVID-19 has accelerated the rate of technology penetration and adoption across a range of industries. One estimate by McKinsey suggests that COVID-19 has vaulted us forward by five years in consumer and business digital adoption. With businesses increasingly investing in new technologies, competitive advantage in tomorrow’s business environment will be determined by one’s use of digital assets. Risk management of these assets will also be increasingly important.

b.           You know even better than I, that as business partners, accountants need to evolve with these changes. It is imperative that you stay adaptable, in order to provide value to businesses. This means three things. One, keeping your skills primed and your knowledge up to date with the latest changes in the markets. Two, becoming “business translators”, meaning people who understand innovation and who can inform businesses on “the benefits of automation and find ways to foster growth while minimising disruption”.And three, keeping the accountancy function up-to-date with the latest technologies in the market, for example, by using Artificial Intelligence to supplement business judgements in financial forecasting.

11.       Second, partnership management. COVID-19 has also heightened the need for partnerships, both within and outside of the organisation.

a.           Within the organisation, there is a need to be agile, which in turn means a need for more cross-functional partnerships and collaborations.

b.           Outside the organisation, there is an increased need for cross-sectoral partnerships, as businesses search for new opportunities in the adjacencies between sectors. We are already seeing some of this. For example, in the legal services sector, some firms have been expanding their suite of services into new areas like Intellectual Property, and Environmental, Social and Governance (ESG) matters. Shook Lin & Bok is one example that comes to mind.

c.           I therefore urge all of you to maintain a spirit of collaboration, so that you can capture the opportunities, both for yourselves and the clients you advise.

Upskilling for Change

12.       I am glad that many within the accountancy industry have been supporting accountants in their journey of transformation. For example, Nexia LLP has been training Nexia staff on the use of technologies like Artificial Intelligence and Robotic Process Automation in the workplace. Similarly, since the Circuit Breaker, BDO LLP has also been increasing the frequency of staff training, to support their personal development. Please continue to support your staff in their development. It will benefit them, but it will also benefit you.

13.       The Government and our partners will walk this journey with you.

a.           The Budgets have many broad-based measures you can take advantage of.

b.           We have set up an Emerging Stronger Taskforce to refresh, re-imagine, and reset our economic strategies, and stay economically resilient in the post COVID-19 world.

c.           We have set up the National Jobs Council to help PMETS and workers to stay employed.

d.           The Singapore Accountancy Commission (SAC) has been working with ISCA, other professional bodies, and economic agencies to create a vibrant sectoral training ecosystem. Accountants can look to the refreshed Skills Framework for Accountancy, which includes information about the 18 emerging jobs in accountancy and the skills needed to access those jobs. Accountants can also leverage on the Professional Conversion Programmes, or PCPs for short, for Management Accountants and Internal Auditors to upskill, reskill, and take on new roles in accountancy. The PCPs have recently been extended to support more mid-career individuals.

14.       I urge accountants to leverage on these support and stay committed to this journey of transformation.

Conclusion

15.       With this, let me conclude.

16.       Even though the current economic conditions are uncertain, we must use this time to prepare for recovery. Press on with innovation and growth. Use this crisis to spark transformation and renewal. Plan well for the future, and position yourselves to seize the opportunities that are already there, and the many more that will come.

17.       Thank you very much, and have a fruitful conference ahead.