Singapore Business Review (January-March 2021)

Issue No. 94

Display to 31 March 2021 S$5.90

Daily news at www.sbr.com.sg

INVESTMENT

IDEAS FOR Singapore’s Best Selling Business Magazine

WHERE TO GET THE BEST RETURNS THROUGH THE RECOVERY

MAPPING OUT SINGAPORE’S POST-PANDEMIC ECONOMY HSBC’S SUSTAINABLE BANKING OUTLOOK INNOVATIONS IN E-COMMERCE LEGAL LUMINARIES: INFLUENTIAL LAWYERS AGED UNDER 40

2021

RECOGNISING THE MOST OUTSTANDING COMPANIES IN SINGAPORE DEADLINE FOR NOMINATIONS IS ON

12 MARCH 2021

For details, contact:

Jane Patiag

+65 3158 1386 ext. 217 jane@charltonmediamail.com

FROM THE EDITOR About Us

Singapore Business Review welcomes 2021 with a fresh list of investment opportuniteis for the Year of the OX. These ideas were carefull selected to guide you with your finance plans this year amidst the uncertenties and volatility brought by the COVID-19 crisis. Check out the latest version of our annual list on page 32.

AUDITED CIRCULATION: 23,116 ONLINE READERSHIP: 410,000 monthly uniques through Google Analytics The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership has an average of 215,000 unique viewers, according to Google Analytics.

We won the Business Trade Media of the Year Award at the 2017 MPAS Awards.

Do reach out to us if you would like us to tell your story to our readers via print & online advertising or events.

PUBLISHER & EDITOR-IN-CHIEF Tim Charlton MANAGING EDITOR Paul Howell PRODUCTION EDITOR Janine Ballesteros PRODUCTION TEAM Frances Gagua Beatrix Malesido Djan Magbanua GRAPHIC ARTIST Mark Simon Engracial II Ron De Los Santos ADVERTISING CONTACT Aileen Cruz aileen@charltonmediamail.com Karisse Coderes karisse@charltonmediamail.com Reiniela Hernandez reiniela@charltonmediamail.com ADMINISTRATION ACCOUNTS DEPARTMENT accounts@charltonmediamail.com ADVERTISING advertising@charltonmediamail.com EDITORIAL sbr@charltonmedia.com

SINGAPORE Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533 +65 3158 1386 HONG KONG Charlton Media Group Hong Kong Ltd 19/F, Yat Chau Building, 262 Des Voeux Road Central Hong Kong. +852 3972 7166 www.charltonmedia.com PRINTING Times Printers Private Limited 16 Tuas Ave 5 Singapore 639340 www.timesprinters.com a member of Times Publishing Limited

Can we help?

Editorial Enquiries: If you have a story idea or just a press release, please email: sbr@charltonmedia.com and our news editor will read it.

For a personal message to the editor, put the word “Tim” in the subject line.

For Media Partnerships, please email: sbr@charltonmedia.com and put “partnership” in the subject line and it will forward to the right person.

Subscriptions email: subscriptions@charltonmedia.com Singapore Business Review is published by Charlton Media Group. All editorial is copyright and may not be reproduced without consent. Contributions are invited but copies of all work should be kept as Singapore Business Review can accept no responsibility for loss. We will however take the gains.

Sold on newstands in Singapore, Malaysia, Hong Kong, London, and New York. Also out in sbr.com.sg with online readership of 215,000 monthly unique visitors*.

This issue also includes our exclusive interview with Cherie Teng, head of corporate banking at HSBC Singapore, as she discusses digital product usage in the banking industry and how financial organisations will be driven by technology and sustainability agenda in the next years. Go over to page 20 for the whole interview.

Technology has also transformed the legal industry’s typical working environment as biggest firms turn to digital transformation and evolve their practices to new tech-focused segments of laws.

Singapore’s Second Minister for Law, Edwin Tong also pushed for the Legal Industry Technology and Innovation Roadmap to promote innovation, technology, and development in the Lion City’s legal industry over the next decade. Read more about this on page 42.

Further, another batch of promising lawyers made it to our annual list of Legal Luminaries Aged 40 and Under. These lawyers have advised clients in matters such as mergers and acquisitions (M&A), criminal litigation, international arbitration and dispute resolution, with expertise in areas ranging from banking to white collar crime.

Flip over to page 44 to find out who made the cut.

Enjoy reading!

Tim Charlton Singapore Business Review is available at the airport lounges or onboard the following airlines:

Singapore Business Review is available at the following clubs and hotels: American Club Grand Plaza Park Hollandse Club Royal Laguna National Hotel InterOrchid Country Club Continental Raffles Country Club Le Meridien Orchard Raffles Town Club New Park Hotel RSYC Pan Pacific Seletar Club Raffles Hotel Sentosa Golf Club The Hilton Singapore Cricket The Regent Singapore Club The Ritz Carlton Singapore Island The Swiss Hotel Country Club Stamford Swiss Club Traders Hotel The Tanglin Club Singapore The China Club Darby Park The Legends Fort And at 16 serviced Canning Park residences The Pines Club Tower Club Singapore Fullerton Hotel

*Source: Google Analytics **If you’re reading the small print you may be missing the big picture   



SINGAPORE BUSINESS REVIEW | MARCH 2021

1

CONTENTS

FIRST 08 Lull’s over: Singapore property investment sales to rebound in 2021

09 Competitive intensity to decline for taxi industry: analyst

28

COVER STORY WHERE TO INVEST YOUR MONEY IN 2021

10 MAS unveils successful digital bank license applicants

11 SIA pushes through despite $142m loss in its Q3

STARTUPS 14 Intellect’s fight for accessible and affordable mental healthcare

14 How Simtrum lights the way in

32

ECONOMIC OUTLOOK RECOVERY EXPECTED IN MULTIPLE INDUSTRIES THIS 2021: MONETARY AUTHORITY OF SINGAPORE

34

ANALYSIS TECHNOLOGY AND WORKFORCE ARE TOP OF MIND FOR SINGAPORE’S BUDGET WATCHERS

e-commerce photonics industry

INTERVIEW 20 HSBC Singapore sees a digital, green future for the banking industry

INDUSTRY INSIGHT 22 Singapore hotels gearing up for the

42

LEGAL INDUSTRY SURVEY TECHNOLOGY SHIFT TO TRANSFORM SINGAPORE LEGAL INDUSTRY

44

LEGAL INDUSTRY SURVEY YOUNG AT LAW: THE MOST INFLUENTIAL LAWYERS AGED UNDER 40 IN 2021

‘new normal’ in the hospitality industry 24 Innovations on the rise in the retail market 26 Rough road awaits Singapore’s three largest banks in 2021

WEBINARS 46 Why digital supply chains have For the latest business news from Singapore visit the website

www.sbr.com.sg

Published quarterly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533

become vital considerations 47 How to address challenges in database management 48 Developing digital innovations in the ‘new normal’

NOMINATE YOUR INNOVATIVE

PROJECTS AND INITIATIVES AND BE RECOGNISED AS ONE OF THE

MOST OUTSTANDING COMPANIES IN MALAYSIA DEADLINE FOR NOMINATIONS IS ON

19 MARCH 2021

For details, contact:

Julie Anne Nunez

+65 3158 1386 ext 221 julie@charltonmediamail.com

News from sbr.com.sg Daily news from Singapore MOST READ

HIRING

SG’s workforce hopes for global equality amidst pandemic With massive struggles and challenges, 2020 has changed the way Singaporeans live, socialise, and do business. One of the most hard-hit areas of impact this year is the employment sector. Salesforce Singapore’s general manager Cecily Ng said that Singapore is in the midst of a jobs crisis with 81% of Singaporeans saying income equality is not improving, and 72% said access to job opportunities is not improving.

INFORMATION TECHNOLOGY

ECONOMY

NTU, PayPal to bolster cryptography research in Singapore Nanyang Technological University has reportedly partnered with online payment platform PayPal to advance cryptography research in secure multiparty computation (MPC) in Singapore. “MPC is a cryptographic technique which enables a group of participants to jointly and securely process data without compromising privacy,” said PayPal, noting that this could reduce the risk of adversaries bringing down its platform.

Aedge Group announces IPO launch on Catalist Board Multi-services provider Aedge Group has launched its placement of approximately 16 million shares at $0.20 per share in conjunction with its proposed listing on the Catalist Board of the Singapore Exchange Securities Trading Limited. The placement represents approximately 15.1% of the enlarged share capital of 106 million shares of Aedge, and the group’s market capitalisation will be around $21.2m post-placement.

A shrinking workforce and COVID-19: Singapore must automate now

BY Malina Platon Between the pandemic and population shifts, havoc is being wrecked on economies in Asia’s. Both combine to form a lethal force that is pressuring businesses to change how they usually operate, whilst doing more with less.

The report by Oxford Economics said Singapore’s labour supply will shrink by 1.7 percentage points (ppt) in the 10 years through 2026, and by 2.5 ppt in the following decade.

A blend of empathy and tech will future-proof customer support

BY Vinod Chandramouli Businesses are in the middle of reimagining many key functions to address the new world order, due to the disruptions it brought. In Singapore retail sector, sales declined 10.8% in September 2020 compared to the previous year, due to the disruptions from the pandemic.

Changes in the human experience are influencing how consumers engage with brands and what they expect from these interactions.

MOST READ COMMENTARY The road to business recovery and survival in post-COVID Singapore

BY Sean Fredericks Industries worldwide are coming to terms with a period of uncertain recovery but firms in Singapore can be certain about one thing – re-evaluating business strategy is required in these changing times.

Reactive measures to recover may no longer cut it in a post-COVID Asia Pacific. Consumer behaviours will continue to change and recovery depends on permanent changes and evolving market expectations.

4

4 SINGAPORE BUSINESS REVIEW | SEPTEMBER 2019 SINGAPORE BUSINESS REVIEW | MARCH 2021

ARE YOU ONE OF

SINGAPORE'S

LEADING COMPANIES IN TECHNOLOGICAL INNOVATION? DEADLINE FOR NOMINATIONS IS ON 5 MARCH 2021

FOR DETAILS, CONTACT:

JANE PATIAG

+65 3158 1386 ext. 217 jane@charltonmediamail.com

SINGAPORE BUSINESS REVIEW | MARCH 2021

5

AGENDA PEOPLE | PLACES | SERVICES | OPPORTUNITIES

OPPORTUNITIES

SP DIGITAL SP Digital (SPD), a wholly-owned subsidiary of SP Group, was incorporated to spearhead SP Group’s digital transformation and sustainability goals. Driven by our mission to Power Sustainability with EnergyTech, SPD leverages the latest innovations in technology to deliver solutions for SP’s various business units and the built environment.

We do this by providing consumers and businesses with timely data for decision making; and leveraging technology to optimize operations and deliver value.

OPPORTUNITIES

S P JAIN SCHOOL OF GLOBAL MANAGEMENT S P Jain School of Global Management (SP Jain) is an Australian business school with campuses in Mumbai, Dubai, Singapore and Sydney. The School offers a plethora of undergraduate, postgraduate, professional and doctoral programs with a motive of crafting leaders for the 21st century workplace. The learning experience provided by them is modern, relevant and truly global. Their full-time MBA programs have significant recognition as evinced through global rankings by Forbes, The Economist and The Financial Times to name a few.

To know more, please visit www.spjain.sg

visit

charltonmedia.com

FOR MORE INFORMATION on EVENTS AND ADVERTISING

6

SINGAPORE BUSINESS REVIEW | MARCH 2021

CO-PUBLISHED CORPORATE PROFILE

Alibaba rounds up highlights for 11.11 Global Shopping Festival 2020 Evolution from a ‘single’ to a ‘double’ festival provided more opportunities for merchants.

Alibaba embraced digital technologies in its platforms

E

-commerce and technology specialist Alibaba Group has kicked off last year’s 11.11 Global Shopping Festival. This was the Group’s largest 11.11 event since its inception , and it generated a total of $101.46b (RMB498.2b) in gross merchandise volume (GMV) during the 11-day campaign, and handled 583,000 orders per second during peak activity.

Responding to the rapidly shifting consumer trends, 11.11 leveraged Alibaba’s digital ecosystem to continue supporting merchants, whilst providing consumers with innovative and engaging retail experience.

The 11.11 Global Shopping Festival began in 2009 with participation from just 27 merchants as an event to raise awareness about the value of online shopping. Since then, the group has continued to provide consumers and merchants with an avenue for interactive shopping, boasting greater reach, debuting more brands and products across their e-commerce platforms over the years.

At the group’s 11.11 press conference held on 29 October 2020, Alibaba Group’s Chief Marketing Officer Chris Tung emphasised the importance of embracing innovative digital technologies and shared how Alibaba is helping more brands – both in mainland China and overseas – participate in 11.11 this year by doing so.

He highlighted the festival’s evolution from a ‘single’ to a ‘double’ festival with the number of participating entry platforms doubled. Last year’s 11.11 also featured not one, but two, sales periods to bring more opportunities to

participating brands and businesses for the first time, with an additional sales window added from 1 to 3 November 2020, ahead of the regular sales schedule on 11 November.

In following with the ‘double’ festival, last 11.11 also saw a double gala – with the Tmall 11.11 Livestreaming Grand Ceremony held on 31 October, and the Tmall 11.11 Gala on 10 November, providing twice the opportunities for brands and merchants to showcase their products, as well as doubling the fun for shoppers all over the world as the festival entered its 12th year.

Various executives from Alibaba Group including James Zhao, general manager of Cainiao Global Supply Chain, Cainiao Network; Alvin Liu, Tmall Import and Export president; and Jessica Liu, Lazada Group co-president and regional head of commercial, shared the objective and scale of last year’s festival, highlighting how the Alibaba ecosystem will help local merchants to participate in 11.11.

Jessica Liu emphasised Lazada’s strong

LIVESTREAMING TOOK CENTER STAGE LAST 11.11 AS ALIBABA PROVIDED A MORE REALISTIC AND ENGAGING SHOPPING EXPERIENCE partnerships across its six Southeast Asian markets, with more than 350,000 sellers and brands collaborating with the platform in this year’s festival. Lazada also unveiled their first Lazada regional brand ambassador, South Korean actor and model, Lee Min Ho. Meanwhile, James Zhao shed light on Cainiao’s preparation for 11.11, which includes investing in cutting-edge logistics technology and innovations such as Automated Guided Vehicles (AGV), automated parcel collection machines, and smart lockers to support the order volume made during 11.11. In last year’s festival, the Alibaba logistics arm processed more than 1.8 billion delivery orders.

Brands such as Golden Goose and Unilever were also invited to share their thoughts on participating in 11.11 and introduce how they partnered with Alibaba to achieve richer customer experiences.

“We have been seeing our followers growing over the months (since we established a

presence on Tmall). However, we feel that 11.11 is not about achieving targets, but about using it as an opportunity to showcase our brand DNA,” said Mauro Maggioni, Chief Executive Officer Asia Pacific, Golden Goose.

The Italian brand used 11.11 as a platform to launch two new sneaker ranges and offered fans and customers a special offline-to-online tour of its lab, where they saw artisans at work and enjoy personalised services.

Other highlights of the festival The group officially kicked off the presales for its annual 11.11 Global Shopping Festival on 21 October. The number of consumers shopping during the first hour of presales was more than double than the previous year’s, and over 300 brands recorded the results on the first full day of presales that surpassed the same period of last year.

Tung highlighted the holistic participation of business units across the Alibaba ecosystem such as Alipay, Tmall Global, Fliggy, as well as ticketing platforms, such as Taopiaopiao and Damai that helped provide more seamless end-to-end shopping experiences to consumers.

To cater to the wider international reach for this year’s sales, Alibaba Group’s cross-border e-commerce platform Kaola also joined the 11.11 festivities for the first time, featuring products from 89 countries and regions.

More brands and products also made their debut on the Tmall platform, with more than 2,600 new overseas brands, over two million new products, and an addition of around 50,000 companies introduced to the festival.

Renowned luxury brands such as Prada, Cartier, Montblanc, Piaget, Balenciaga, and Chloé also joined the festival for the first time.

In addition, over 1.2 million new imported products made their debut from overseas merchants such as Universal Music Group’s merchandising and brand management division The Bravados, which recently launched a store on Tmall Global featuring merchandise from top international artists. This includes Tupac, Guns N’ Roses, The Rolling Stones, Bob Marley, Taylor Swift, and more.

Livestreaming also took the center stage as Alibaba continued its efforts to cater to the Gen Z consumers in China by providing a more realistic and engaging shopping experience.

SINGAPORE BUSINESS REVIEW | MARCH 2021

7

FIRST

Singapore received a hefty SGD 17.3 billion worth of property investment in 2020.

Lull’s over: Singapore property investment sales to rebound in 2021

T

he economic uncertainties due to COVID-19 and the travel restrictions affecting the practicality to execute transactions, hampered deals in 2020. Still, JLL reveals investors injected SGD 17.3 billion into Singapore’s property investment sales market, comprising all private sector deals worth at least SGD 5 million each and all public sector sales. This is nearly double the SGD 9.2 billion recorded during the Global Financial Crisis in 2009. For this to occur despite Singapore entering its worst post-independence recession in 2020 underscores investor confidence in the city state’s current property market compared to that of a decade ago.

The residential sector was the most active asset class in 2020, with sales driven by the landed homes segment.

SGD 4.0 billion worth of landed homes (priced at least SGD 5 million each) were transacted in 2020, exceeding the SGD 2.7 billion accumulated in 2019. Retail was the second most active sector, with sales falling the least in 2020, at just -12.8%.

Major deals in 2020 include Frasers Centrepoint Trust’s billion-dollar acquisition of the remaining 63.11% stake 8

SINGAPORE BUSINESS REVIEW | MARCH 2021

in AsiaRetail Fund Limited which holds five suburban retail malls and one office development, and Alibaba’s purchase of a 50% stake in AXA Tower commercial development in the CBD for SGD 840 million.

With the economy expected to rebound, coupled with optimism surrounding the availability of the COVID-19 vaccine, ample liquidity and the pressure to deploy, Singapore’s property investment sales market is poised for a pickup in 2021.

Singapore property investment sales by sector in 2020

Source: JLL Research

Low supply to keep investors keen on office assets Barely one month into 2021 and the market has witnessed the conclusion of a major office deal — Allianz Real Estate secured a 50% stake in OUE Bayfront, a premium grade office asset located in the Singapore CBD, for SGD 633.8 million.

Singapore’s CBD office assets are attracting keen investor interest as the low pipeline supply supports a wider margin of safety in the light of uncertainties surrounding office demand post-COVID. Specifically, the city-state’s investment-grade CBD office inventory is estimated to grow, on average, at a slow rate of 0.5 million sq ft, per annum between 2021 and 2025. This is just half of the 1.0 million sq ft average annual net absorption recorded between 2010 and 2020 and should buffer the sector well against the impact of any potential increase in occupier adoption of work-from-home strategies.

Besides offices, investors can be expected to continue to be on the lookout for retail and industrial assets, although selectively and especially for the latter, given the generally short land tenure and strict government regulations governing their use.

Depleting unsold inventory rekindling residential collective sales activity Demand for homes should continue to gather pace, underpinned by the expected economic recovery and the gradual reopening of borders that could facilitate foreign purchases of high-end homes.

Healthy demand for homes in 2021 would reduce unsold inventory, which has already dropped significantly to 24,341 units as of 4Q20, from a peak of 37,799 units in 1Q19. This has rekindled developers’ interest in residential development land and could drive a nascent recovery in the residential collective sales market in 2021.

FIRST

A potential merger between Grab and Gojek would reduce competition in the taxi market

Competitive intensity to decline for taxi industry: analyst

T

he competitive intensity in the Singapore taxi industry could decline in the coming year amidst several developments in some companies, according to an analysis by RHB Bank.

Amongst the reasons cited is the recent news surrounding the talks on the proposed merger between Grab and Gojek, with reports suggesting that the companies have made substantial progress in working out a deal.

“This merger, if confirmed, should reduce the competitive intensity in Singapore’s taxi and private-hire car landscape, which has already witnessed a decline in demand this year due to the pandemic,” RHB analyst Shekhar Jaiswal said.

However, the reports noted that the talks are still fluid and may not result in a transaction, as the deal would need regulatory approval and governments may have antitrust concerns

about the unification of the region’s two leading ride-hailing companies.

The recent winning of the full digital bank licence by the consortium of Grab and telecommunications giant Singtel would also mean that Grab will be busy building its financial services businesses as it plans to launch a digital bank in 2022.

RHB believes that with the decline of demand for transport services, receipt of a full digital bank licence, and growing contributions from food delivery services, Grab could realign its focus away from the transport business in Singapore.

This development could be positive for ComfortDelGro’s (CDG) taxi business.

RHB has maintained its “buy” recommendation for CDG, whilst raising its target price to $1.90 and CDG’s earning estimates for 2021 to 2022 by 3% to 4%, respectively to account for a slightly higher utilisation rate for CDG’s taxi fleet.

“We maintain that gradual normalisation of business activities in Singapore and the company’s other key overseas markets should support an improvement in public transport ridership and a stabilisation of the taxi business during 2021,” he added.

Amidst the impact of COVID-19, HDT Singapore has also announced the closure of its taxi business for good. The Land Transport Authority has previously accepted HDT’s application to exit the industry.

Singapore IPO activity ‘bright’ amidst market risks

T

otal initial public offering (IPO) activities in Southeast Asia for almost 11 months in 2020 raised US$6.44b from 100 IPOs despite uncertainties from the pandemic.

Amidst the decrease of the number of IPOs by 38% from 2019 and of the IPO proceeds by 12% from US$7.34b, the total IPO market capitalisation in 2020 has inched up by 3% to US$25.96b.

Singapore saw its largest homegrown listing through Nanofilm Technologies, which raised US$345m on the Singapore Exchange (SGX) Mainboard. SGX has raised a total of US$852m as of 15 November 2020 in IPO proceeds from eight IPO deals, which includes two real estate investment trust IPOs on SGX Mainboard that raised

US$479m and another five deals on the Catalist board that raised US$29m.

Deloitte Southeast Asia and Singapore disruptive events advisory leader Tay Hwee Ling also believes that the region will continue to see good growth and should expect an upswing in listings as soon as a COVID-19 vaccine is proven safe and effective.

“COVID has made companies reevaluate their business and growth forecast; and companies are looking into windows of opportunity to raise funds from stock markets to support their growth and stay resilient in this challenging climate.

Although we are not out of the woods yet, the listing markets in Southeast Asia are still dynamic and attractive to investors,” she said.

SINGAPORE BUSINESS REVIEW | MARCH 2021

9

FIRST

MAS believes that the new digital banks will further strengthen Singapore’s financial sector

MAS unveils successful digital bank license applicants

A

new era of digital banking dawns in Singapore with the Monetary Authority of Singapore (MAS) unveiling four successful applicants for its digital-only bank licenses in end-2020, which include big names such as the GrabSingtel consortium as well as an entity owned by China’s fintech giant Ant Group.

Two applicants were awarded a Digital Full Bank (DFB) license, one of which is a consortium that comprises ride-hailing app Grab and telecommunications giant Singtel.

The consortium plans to focus on serving consumers and small businesses, starting with time-starved young Professionals, Managers, Executives and Technicians (PMETs), gig workers with flexible incomes, and micro-SMEs that face limited access to financing. It also plans to build a platform that will give them access “to transparent and convenient financial services embedded in their everyday activities.”

Grab-Singtel has appointed Charles Wong as CEO of the digital bank, and has announced plans to fill around 200 roles by end-2021 for their digital bank.

An entity owned by Sea Limited, parent of e-commerce giant Shopee, clinched the second DFB license.

10

SINGAPORE BUSINESS REVIEW | MARCH 2021

The company touted its three platforms—Shopee, Garena, and SeaMoney—saying that its digital bank will draw on insights about the needs of young consumers and SMEs from across Sea’s established digital ecosystem.

Meanwhile, one of the two slots for a Digital Wholesale Bank (DWB) license was awarded to an entity owned by China’s fintech giant Ant Group. The fintech made headlines in November 2020 after its $35b IPO was scrapped after Chinese regulators allegedly found anomalies and shortcomings in the group.

The final slot for the DWB license was awarded to a consortium comprising of Greenland Financial Holdings Group, a financial services and asset management firm backed by China state-owned real estate company Greenland Holdings; Linklogis Hong Kong, which offers money lending services and supply chain financing; and Beijing Co-operative Equity Investment Fund Management.

The next 18 months will see Singaporeans eagerly awaiting how these new entrants will do—and whether they will be able to shake-up the established trifecta of DBS, UOB, and OCBC. Established banks seemed unfazed by the prospect of new entrants, congratulating the license winners shortly after MAS’ announcement.

“Their presence will add to the healthy competition, especially in the area of digital innovations, for the benefit of Singapore’s consumers and businesses,” said UOB deputy chairman Wee Ee Cheong.

“We believe that the new entrants will spur us all on to do better and we will continue to focus on making banking more intuitive and invisible,” said DBS Singapore country head Shee Tse Koon in a separate media release.

MAS previously announced that it would award banking licenses for up to two DFBs and three DWBs. In June 2020, the regulator revealed that it whittled down the number of aspirants to 14 from 21.

It originally planned to award licenses

by June, but deferred its decision to the second half of 2020.

MAS also took into consideration the eligible applicants’ reviews of the business plans and assumptions underpinning their financial projections arising from the impact of the COVID-19 pandemic.

The regulator signaled that it is open to granting more DWB licenses in the future.

Grab-Singtel consortium and tech giant Sea were awarded with digital full bank licences

FIRST

SIA’s passenger carriage dropped 97.6% YoY

SIA pushes through despite $142m loss in its Q3

T

he Singapore Airlines (SIA) Group is transforming its operations to help it survive – and possibly even emerge stronger from the impact of the coronavirus pandemic. This is despite having faced down a $142m net loss in its third quarter of 2020, ending on December 31.

The result was down by $457m from the $315m net profit it recorded over

the same period in 2019. The loss was linked to the airline’s weaker operating performance, after travel restrictions decimated its passenger carriage by 97.6% year-on-year, but was partially offset by tax credits.

But the airline is taking a proactive response to the poor operating conditions, reorganising its brands and holding off on planned expenditures. For

example, it will integrate the narrow-body operations of SilkAir with Singapore Airlines, starting with the transfer of its services to and from Phuket, Thailand.

These services will begin operating as Singapore Airlines routes March, 2021.

The Group has also reinstated SIA services to Dubai, Moscow and Munich since January this year.

With these changes, the Group expects its total passenger capacity to reach up to 25% of its pre-pandemic levels by the end of April, 2021. It will then be serving around 45% of the points of destination before the coronavirus made its impact.

“This will deliver greater economies of scale for the Group and allow it to deploy the right aircraft to meet the demand for air travel as it returns,” the company has advised.

The Group has also agreed to revise its initial aircraft delivery agreements with Airbus and Boeing to recalibrate the rate at which it will re-introduce capacity. The airline, in effect, has deferred over $4b of capital expenditure from 2021 to the 22/23 financial year.

Further, in spreading out the delivery of aircraft, SIA was able to respond to changes in its projected long-term fleet needs beyond FY25/26 with the conversion of 14 Boeing 787-10 aircraft into 11 additional Boeing 777-9 aircraft.

CHARTIST

Pandemic fails to dent Singapore fintechs’ hiring plans: study 6. FinTechs see digital banks as key to boosting local talent

T

he pandemic has failed to slow the hiring plans of Singapore-based fintech firms, with majority indicating that they will expand their headcount in the coming months, a joint study by the Singapore FinTech Association (SFA) and PwC Singapore found.

Amongst the 1,491 surveyed individuals working at fintechs with a Singapore presence, 97% said that their company plans to hire more people in the next 12 months, according to the latest Fintech Talent Survey released. Meanwhile, for the 3% who said no, COVID-19 was cited as the main reason.

Instead, surveyed fintechs cut costs by reducing their office space or moving to a smaller location (36.4%) and reducing staff costs (33.3%). Meanwhile, 34.8% said that they did nothing to manage or reduce costs.

The majority of FinTechs view the arrival of

Exhibit 15: Digital banks positively impacting talent supply in Singapore Question: How do you think it would impact the

In terms of employment, supply of talents in Singapore? digital banks as a contributing factor towards boosting the supply of local fintechs in Singapore are FinTech talent (Exhibit 15). Further, they 1.5% increasingly hiring local talent, theonpandemic expect aHow positiveis effect the talent availability across most job functions in the with more than one in four or 7.6% industry.affecting the fintech 28.1% saying they plan to hire 19.7% 6.1% The combination of banking and FinTech is industry?

19.7% mostly local talents. Meanwhile, seen as attracting fresh talent and driving interest among locals to learn necessary over three in five or 62.5% of skills to work in such institutions. As a respondents are still in favour spillover effect on the wider FinTech of hiring a combination of both community, the availability of local talent is 31.8% 31.8% expected to increase. foreign and domestic talents.

33.3% The interest in local talent 33.3% could be driven by enhanced capabilities of local talent as a result of numerous government For a growing business the upskilling initiatives, the SFA andfundamental challenges are costs and Very positive impact talent availability. If bigger companies PwC noted. Moreover, attractingin small markets offer massive Positive impact and hiring foreign FinTech talentsalaries in to average talent, as they are Slightly positive impact a post-COVID environment couldthe best locally, then how can No impact startups compete?

Hence, a larger be quite challenging. talent pool is a must, irrespective of Slightly negative impact However, hiring local talent is where people come from” Negative impact not easy as most are attracted toFintech Talent Survey 2020 respondent Very negative impact larger and more established firms aside from their unrealistic salary Source: Singapore FinTech Association (SFA) and PwC Singapore expectations, SFA and PwC said.

SINGAPORE BUSINESS REVIEW | MARCH 2021

11

FIRST Residential property investment maintaining pace: report

Banks, and the SGX lauded for their gender equality moves

Signs are pointing to a possible re-activation of collective sale tenders

A

great buzz is expected in residential investment activity from early 2021 as residential property sales keep pace, according to Cushman & Wakefield’s market outlook 2021 video series.

In the real estate services firm’s latest tally, “private residential prices registered a gain of 0.8% in Q3 2020 compared with Q2 2020, bringing prices to its peak since Q3 2013.” In 2020, sales had been expected to log at least 20,000 units.

According to head of research services Christine Li: “The residential collective sales market is back in focus after a three-year hiatus. Signs are pointing to a possible re-activation of collective sale tenders but the long gestation period makes government land sales and private plots a preferred choice at the moment.”

The unsold inventory continues to decline and currently stands at 26,600 units. That said, Cushman & Wakefield had expected developers to sell about 9,800 to 10,000 in 2020, potentially exceeding the 9,912 units that were transacted over the same period in 2019.

“Excluding related party transactions including REIT mergers, residential sales make up the bulk of investment sales activity for the whole of 2020 at 43%,” Cushman & Wakefield reported.

“Commercial, industrial and mixed or others make up 29%, 19% and 9%, respectively.”

Meanwhile, single-owner sites were also in the spotlight, according to executive director of capital markets Shaun Poh. “ The sale of the GuillemardJalan Molek site recently at $93m has sparked a wave of interest by residential developers, particularly, mid-sized ones, to look at sites that will help them ride the current cycle—these include single-owner plots and older CBD offices that can take advantage of the CBD Incentive scheme.”

In addition, office assets would remain a favoured asset class in 2021. According to Li: “The office market is poised for more transactions in 2021, given that investors have slowly adjusted to the new normal, together with positive sentiments around the Phase 3 reopening of the economy, spurred by the arrival of the vaccine. There is growing interest in office properties by institutional players, opportunistic private-equity investors, wealthy individuals and family offices that continue to provide support for demand once the price gap between buyers and sellers narrows.”

12

SINGAPORE BUSINESS REVIEW | MARCH 2021

DBS Group leads ASEAN in the top global quartile this year

S

ix Singapore companies have made it into the 2021 global Gender Equality Index, by Bloomberg, with DBS Group leading the Southeast Asia region in the top quartile for the year.

Also included in the list are City Developments Limited, Singapore Exchange Limited, UOB Group, Singtel and Genting Singapore Limited, a new addition to the list.

DBS CEO Piyush Gupta said that to be in the GEI’s top global quartile attests to the firm’s commitment to advancing parity and its efforts in building a respectful and inclusive workplace that embraces gender, generational, and cultural diversity.

“We believe gender equality is essential to sustainable growth.

At DBS, women comprise 50% of our workforce, 40% of our senior management, and run our largest businesses and key functions across the bank,” Gupta added.

Meanwhile, City Developments is the only Singapore real estate company to have been included in the index.

Group CEO Sherman Kwek said the company was honoured to be named in the index for the fourth consecutive time. In 2017, CDL established an internal Diversity and Inclusion Task Force to promote diversity and inclusion within the workplace and the wider community.

UOB Group meanwhile, has

also taken a long-term approach to achieving gender equality across its workforce and senior ranks.

Before the end of 2020, UOB’s workforce comprised 61.3% of women, an increase from 60.9% in 2019. Women represented 35% of senior management and 52% of middle management.

Dean Tong, UOB’s head of group human resources, said that UOB is committed to ensuring equal opportunity for all on the basis of merit and to attract and to develop enterprising talent.

“We focus on building a workplace that values every individual and motivates them to reach their highest potential,” he added.

The Gender Equality Index is a recognition for publicly listed companies that bring transparency to gender-related practices and policies, increasing the breadth of environmental, social, governance data available to investors.

This year, the index comprised 380 companies across 44 countries and regions, and 11 sectors including automotive, banking, consumer services, engineering and construction, and retail, up from 325 companies in 2020.

Firms on the 2021 index have a combined market capitalisation of USD14 trillion, up from USD12 trillion last year. On average, the index’s companies have 29% of their board positions filled by women.

FIRST not be enough to sway countries with the “zero case” approach.

Though Singapore still keeps a tight watch on its borders, it is gradually opening up by allowing short-term visitors in via the Fast Lane/Reciprocal Green Lane arrangements, Air Travel Pass, and Air Travel Bubble arrangements with countries that Singapore has agreement with like Mainland China, Republic of Korea, Germany, Japan, Indonesia, and Malaysia.

Singapore is gradually opening up by allowing short-term visitors via reciprocal Green Lane arrangements

COVID-19 ‘elimination’ strategy might delay opening borders past 2022

G

overnment responses to battle the COVID-19 pandemic have divided countries into two camps that will affect how soon each country opens its borders for international travel, according to a research by Jefferies.

The research said countries that fall under the “suppression” category are those that aim to minimize COVID-19 cases, whilst countries under the “elimination” category are those that aim for “zero cases”.

Jeffries believes that countries that fall under

the elimination category will take longer to open their borders than those under the suppression category. Singapore is one of the countries aiming for zero COVID-19 cases.

Other countries Jefferies mentioned that also fall under this category are Hong Kong, China, New Zealand, and Australia Like other countries with an elimination strategy, Singapore may likely see an opening of its borders for those with the ‘suppression’ strategy well past 2021 and into 2022. Even a significant decrease in COVID-19 cases might

Vaccination won’t hasten reopening With vaccination programs rolling out, countries with high cases like the United Kingdom and United States may see a significant drop in COVID-19 cases, but Jefferies argues that governments invested in the “zero case” approach will be hard pressed to open borders. Singapore still continues to have a cautious approach towards the vaccine, even with the government’s own plans to have every citizen vaccinated by the end of 2021.

According to Multi-ministry Taskforce co-chair Lawrence Wong, vaccinated travellers to the country are still subject to Stay-Home Notice requirements.

Singapore is now transitioning to Phase 3 with gatherings scaling up to eight people from five, increase in capacity limits of premises, and other changes. However, outside factors like the new coronavirus variants, may affect how travel to and from the country.

Four in 10 employers to expand headcount this year

F

orty percent of Singapore employers plan to increase the number of their employees this year, according to professional recruitment services firm Michael Page Singapore’s Talent Trends 2021 Report.

The headcount expansion plans indicate an “optimistic recovery path”, according to the report, notably bouncing back as hiring activities have declined by 35% amidst the COVID-19 pandemic last year.

“In view of the economic demands, the sectors earmarked for highest hiring activity are technology and telecommunications, banking and financial services, industrial and manufacturing, FMCG, as well as professional services,” reported Michael Page.

New job opportunities in the technology sector are driving

the boost in employment.

Since many organisations in Singapore weren’t ready to adapt to the “new normal” introduced by movement and travel restrictions, the fintech and e-commerce sectors became role models.

“2021 will see further drive to upgrade and digitise businesses where technology professionals skilled in data engineering, data visualisation, software developing, and cybersecurity will see the most demand,” the report added.

The report also revealed that 20% of Singapore businesses expressed their plans to prioritise short-term contractors or temporary employment options in their hiring strategy for 2021 with the aim to “bridge skill gaps arising from increased investment in digital tools.”

The headcount expansion plans indicate an “optimistic recovery path”

SINGAPORE BUSINESS REVIEW | MARCH 2021

13

STARTUPS

Theodoric Chew, CEO and co-founder of Intellect

Intellect’s fight for accessible and affordable mental healthcare

I

t was something he himself had gone through that CEO and co-founder of Intellect, Theodoric Chew, made him determined to build a new system of mental health care that is more accessible and affordable for everyone.

“Intellect started when I started to solve a problem I personally faced initially, having gone through therapy since I was younger for anxiety, and regularly thereafter to manage stress and everyday life. I experienced its immense benefits firsthand, but it was expensive to feasibly upkeep regularly,” Chew said in an exclusive interview with Singapore Business Review magazine.

Intellect was started to provide an easy way for anyone to work on their mental health through their app, either through self-guided programs developed by their team of psychologists, or by connecting with a live coach or counsellor.

Chew said their company is solving for three things: the high cost to care where an average therapy session costs between $100 to $300, the stigma and the shortage gap of mental health professionals, especially in Singapore where according to the Ministry of Health there are only 4.4 psychiatrists and 8.3 psychologists for every 100,000 Singaporean citizens

The app has a worldwide reach.Profit comes from working with companies and organisations to provide Intellect as a mental health benefit to their employees.

“A key edge we have is that we have our own in-house clinical team of psychologists, researchers and experts that constantly innovate and push the boundaries of digital therapy. We also partner with leading institutions to lead clinical studies in the space,” Chew said “Mental health tech is a space that is nascent in Asia, but rapidly picking up in need and market size. Amongst other things, the pandemic has shined a spotlight on mental health and how urgent the issue is, advancing its adoption by a few years in this region,” Chew he added.

The company recently concluded an undisclosed seed round led by VC Insignia Ventures Partners, and notable angels and advisors including co-founder & CEO of Carousell, Quek Siu Rui,, J.J. Chai, and former Sequoia partner, Tim Lee. Chew’s vision is simple—to make mental healthcare for everyone and something that anyone, old or young, can turn to without burden or hassle.

They plan to continue to improve access to care, and to advance the field of digitised mental health interventions in the years to come.

How Simtrum lights the way in e-commerce photonics industry

S

ingapore-based e-commerce photonics technology startup Simtrum has only one goal in mind: making photonics technologies more accessible and affordable.

Photonics is the science and technology of generating, controlling, and detecting photons, which are particles of light. The photonics industry involves the manufacturing and selling of light-based technology.

“Currently, the business-to-business side of the photonics industry is plagued by technical and business concerns,” said John Yuan, CEO and cofounder of Simtrum.

He pointed out two concerns. First, a customer must be familiar with the components he is purchasing. “Due to knowledge gaps or being unaware of solutions on the market, processes might become expensive or not perform optimally,” Yuan explained.

The second is that the market for products in the photonics industry is so big, middlemen are needed to understand the resources available and the production chain of system solutions to make the best use of their budget. “This is especially so with new technologies or startups delivering cutting-edge technology directly from other universities. More often than not, these companies do not get any exposure where their product can be useful,” Yuan said. This is where Simtrum steps 14

SINGAPORE BUSINESS REVIEW | MARCH 2021

John Yuan, the CEO, and co-founder of Simtrum

in to the equation.

Through its website and simulation software platform, Simtrum creates a seamless communication medium between customers and suppliers, and provides a knowledge resource of the tools available.

The team takes the massive wealth of information and breaks them down into smaller chunks for businesses and customers.

“One of the biggest driving factors we have going for us is that Simtrum has a core team with a strong knowledge base, from disciplines of spectroscopy to ultrafast lasers. We currently have three PhDs and four bachelors in Engineering and Physics on our team of 10 plus people.”

Using its online platform, Simtrum cuts down the four to 12 weeks of business-to-business purchasing process into a one-week process.

Its software compares suppliers, specifications, quantity cost and lead time, and handles order and demonstration of the product.

Several market studies predicted that by 2025 the photonics industry will be worth around $1.6t (US$800b), a promising investment for research and innovation in the industry. And where else but Singapore is the perfect hub for it.

“Singapore is a hub for driving research and innovation with constant collaboration between the government, universities, research groups.”

EXCLUSIVE: SPACE WATCH

Rackspace Technology provides ‘fanatical experience’ from the heart of CBD The multicloud solutions expert inaugurated the new office space in One Raffles Place late last year.

U

S-headquartered multicloud solutions expert Rackspace Technology has inaugurated a new 4,867 ft office in the One Raffles Place building, at the heart of Singapore’s Central Business District in the fourth quarter of 2020.

With four times the size of the firm’s previous office space, the Singapore office offers a “flexible-working environment with expansive workstations equipped with the best-in-class IT equipment that facilitate hot-desking,” said Rackspace.

In addition, the office design’s large and open-plan space provides opportunities for collaboration and creativity

1

Every meeting room and space was designed with Singapore’s cultural and social landscape in mind

amongst the firm’s teams.

Commenting on the design process of the new office, Rackspace said: “The process of designing the new office has been a collective and detailed exercise to ensure we provide a space that fosters innovation, creativity, and most importantly, fun; creating a ‘Fanatical Experience’ for our Rackers and ensuring that it is a ‘Great Place to Work.’”

Every meeting room and collaboration space was designed with Singapore’s cultural and social landscape in mind, with the scenic Marina Bay Sands which is part of the office’s view, the firm added.

2

Rackspace has a welcoming reception area with natural greenery adorning its entrance and other spaces, providing a warm and inviting environment for employees

1

A highly motivating workspace with expansive workstations equipped with the best-in-class IT equipment is good for business

2

3

4

A scenic meeting room’s large and open-plan space provides opportunities for collaboration and creativity amongst the firm’s teams.

3

4

The new space is four times the size of the firm’s previous office space and has a clean and tidy office entrance which could help motivate employees to go to work

5

6

5

Rackspace employees can enjoy delicious meals with their co-workers in Rackspace’s new cozy lunch room

6

Rackspace offers a spacious shared area which is a great place to hold team meetings

SINGAPORE BUSINESS REVIEW | MARCH 2021

15

LEGAL BRIEFING

New data protection measure highlights compliance and accountability Organisations that handle consumer data face stricter compliance and harsher penalties for misuse.

G

oing digital has made it easy for consumers to give access to their personal data, which has naturally also opened avenues that could threaten their individual privacy. But, are consumers at all aware of where their data goes and what rights they have?

Much has changed since Singapore first enacted its Personal Data Protection Act (PDPA) in 2012, prompting the parliament to amend the law to hold organisations handling personalised data accountable in case of data breaches.

The Amendments to PDPA that took effect on 1 February 2021, have therefore prompted much discussion in the IT and Legal departments of Singapore’s biggest organisations.

One of the key highlights of the Amendment Bill is its emphasis on the accountability for organisations that handle personalised data from consumers.

During the second reading of the bill, Minister for Communications and Information S Iswaran called to attention the growing volume of data generated by internetof-things (IoT) devices and sensors, real and virtual world activities, and smart devices and machines in manufacturing and supply chains.

“Data is also a key economic asset in the digital economy.

The bill incorporates the concept of a data breach into the PDPA, and expands it to also cover the loss of storage devices that contain personal data Data analytics provides valuable insights that inform decisions, generate efficiencies, enhance products and services, and power innovation. It is a critical resource for emerging technologies like artificial intelligence, which hold much transformative potential,” Iswaran said.

He emphasised the need for the regulatory structure to evolve and keep pace with the magnitudinal shifts in the digital economy.

The Amendment Bill introduces an accountability principle to strengthen consumer trust. Currently, there is no statutory requirement for data intermediaries to notify their clients of a data breach.

It incorporates the concept of a data breach into the PDPA and expands it to also cover the loss of any storage medium or device on which personal data is stored in circumstances where unauthorised access, collection, use, disclosure, copying, or modification occur.

According to law firm WongPartnership LLP, organisations who store data will now be required to make reasonable security arrangements to prevent the loss of any storage medium or device on which personal data in their possession or under their control is stored.

Drew & Napier added that the introduction of an accountability clause in the amendment significantly 16

SINGAPORE BUSINESS REVIEW | MARCH 2021

The bill emphasizes on the accountability for organisations that handle data

impacted an organisation’s compliance regiment, particularly in terms of notifications of data breaches.

With the introduction of a mandatory Data Breach Notification Obligation in a new Part VIA, organisations must notify the PDPC if the data breach will result in significant harm to an affected individual or of a significant scale (i.e. possibly 500 or more individuals).

Under new section 26D(1), organisations must notify the PDPC no later than three calendar days after the day the organisations make an assessment.

A following new section, 26D(2), will also require organisations to notify individuals affected by the data breach if the data breach results in, or is likely to result in, significant harm to an individual. The notification should be in the form and manner as prescribed and should contain information to the best of the knowledge and belief of the organisation at that particular time.

However, an exception is if the organisation takes action in accordance with any prescribed requirements that will prevent the use of the data breach to bring significant harm to an individual, or if prior to the breach the organisation implemented any technological measure that renders it unlikely that the breach will result in significant harm to the affected individual.

According to Wong Partnership, the amendments to the PDPA and the enhancements to the enforcement regime signal the expectation that businesses should devote resources and pay close attention to how personal data is being processed and handled.

“At the same time, in widening the ambit of deemed consent and introducing the concept of legitimate interests, businesses should now have greater flexibility to tap on their personal data repositories and data analytics tools to improve their business offerings,” the firm said.

Meaningful consent The new amendments will also expand the concept of

LEGAL BRIEFING deemed consent.

The expansion will cover deemed consent by contractual necessity, where the collection, use or disclosure of personal data is reasonably necessary to conclude or perform a contract or transaction between the individual and organisation and deemed consent by notification, where individuals have been notified of the purpose of the intended collection, use or disclosure of personal data, and given a reasonable opportunity to opt-out, and have not opted out Wong Partnership, however warns that organisations seeking to rely on the expanded concepts of deemed consent may be required to fulfil certain requirements, such as the taking of reasonable steps to bring certain information to the individual’s attention before the organisation is able to rely on deemed consent by notification.

“Accordingly, organisations should review existing data protection policies and processes to account for the prescribed requirements,” they added.

Harsher penalties The present PDPA may seek up to $1m in financial penalties on organisations that have not complied with the data protection provisions.

With the new provisions introduced, the PDPC may seek up to up to a maximum of 10% of the organisation’s annual turnover in Singapore which will be ascertained from the most recent audited accounts of the organisation that is available at the time the financial penalty is imposed. In other cases, the PDPC may seek up to $1m.

The amendments signal the expectation that businesses should pay close attention to how personal data is being handled

Aside from seeking damages from organisations, individuals can now be prosecuted for ‘“egregious mishandling” of personal data with the introduction of criminal offenses for: (1) unauthorised disclosure of personal data; (2) unauthorised use of personal data for a gain for the individual or another person or causing harm / loss to another individual / person; and (3) unauthorised re-identification of personal data.

The penalties for each offence is a fine not exceeding $5,000 or imprisonment for a term not exceeding two years or both.

The new amendment also aims to clarify advisory guidelines on new offences not intended to cover.

Concerns were raised about the higher financial penalties, but Iswaran said during the second reading of the bill that the PDPC will ensure that financial penalties imposed are proportionate to the severity of the data breach. He added that the increased financial penalty will take effect no earlier than one year after the amendments come into force.

With these new measures, a good strategy according to Wong Partnership, would be proactively review existing policies and practices for handling personal data to ensure that they are updated to reflect the new requirements of the PDPA. They must also consider updating their data protection policies so firms may avail of the new bases for processing personal data.

Lastly, businesses handling data should carefully review their agreements with third party service providers to ensure that they are consistently meeting the new requirements under the amended PDPA.

SINGAPORE BUSINESS REVIEW | MARCH 2021

17

MARKETING BRIEFING

The new “realities” that are transforming the retail scene in Singapore Augmented and virtual reality technology is giving consumers exciting shopping experiences in their own homes and has helped them form new shopping habits across both online and brick-and-mortar platforms.

T

he “new normal” in the retail sector has led to a huge decrease in footfall amidst safety restrictions and a huge economic downturn.

Since the onset of the pandemic, retailers have innovated ways to manage their operations in an uncharted territory and to hook consumers despite a recovering economy. They have mainly relied on immersive technologies such as augmented reality (AR) and virtual reality (VR) to give consumers the perfect shopping experience in the comfort of their homes.

According to the latest report on consumer trends by Euromonitor International, technologies like AR and VR have helped consumers form new habits around shopping and socialising.

Brands like Nike, UNIQLO, and SK-II have already implemented both AR and VR technology by offering virtual foot size checking function for sneakers, in-store magic mirror to try on apparel items, as well as an AR-featured pop-up store.

Euromonitor International research manager Herbert Yum has noted that the use of AR and VR boomed in e-commerce in 2016, when companies like Sony and Google launched VR gears, allowing the virtual experience in gaming and other platforms.

Delivering virtually enabled at-home experiences remains imperative to drive e-commerce sales and gather data amidst the recovery of the retail industry, Euromonitor also noted.

Being able to try on and experience the product itself is crucial in making a purchase, especially for consumer goods.

“For consumer goods that product or service experience acting as a more important factor when making purchasing decisions, virtually enabled at-home experiences would then be an effective tool to fill such incapability of online shopping, hence helping drive e-commerce sales,” Yum said.

As such, businesses are using these technologies and processes to encourage consumers to safely visit onsite as well with the help of smart devices.

Virtual experience help drive e-commerce sales

18

SINGAPORE BUSINESS REVIEW | MARCH 2021

Herbert Yum

“Adopting mobile reservation systems, QR codes for touchless menus and payments, and in-store virtual fitting rooms are strategies companies are taking to minimise human interactions,” the Euromonitor report stated.

They can also offer services such as personal shopping appointments through video conferencing, VR travel experiences, and crafting personalised goods through artificial intelligence.

Moreover, consumers are also seen to be growing accustomed to the inclusion of immersive technologies in their retail experience.

An Accenture survey found that consumers in Asia Pacific are some of the greatest advocates for immersive technologies in the world - with an average of 68% more likely to buy from a brand that focuses on better experience

AR and VR are in its “rapid developing phase” as most consumers are still having their “novice experience” with the technology using immersive technologies like AR and VR. The survey also found that nearly three in five consider experiencing products before purchasing to be their top motivation for trying immersive technologies.

Given the necessity of AR and VR in the midst of the “new normal”, the technology is most likely to be seen further in the retail experience as it becomes integral to the daily operations of retailers. Whilst the trend of immersive technologies is rising, Yum described AR and VR to be in its “rapid developing phase” as most consumers are still having their “novice experience” with the technology.

“Untapped potential is huge as the technology advancement on future AR and VR hard and software would be the key determinator of the future growth of this segment,” he said.

However, Yum mentioned that integrating the virtual world in physical spaces would increase the cost for businesses, with those reliant on a high number of physical retail networks suffering the most amidst a drastic push in the expected setup costs.

“This is particularly important to Asia cities such as Hong Kong, Singapore, Shanghai and Tokyo, where the rental and labour costs are relatively higher than other major cities in Asia,” he said.

Yum advised businesses, especially those struggling, to rethink and transform the composition of their retailing channel and the role for each, before allocating a significant

HR BRIEFING

Ageism still rocking Singapore workplaces New research shows around 20% of Singaporeans experience age discrimination in the workplace, significantly higher than the 12% Asia-Pacific average. Singapore Business Review finds out why. procedures that relate to discrimination and harrassment.

Mitigating age discrimination in the workplace Another related study, “Ageism in the Workplace”, has been published by global HR services leader Randstad in August 2020. It finds employers need to “enforce nondiscriminatory HR policies and intervene quickly” as well as “create multi-generational teams to encourage collaboration and learning” in order to prevent age discrimination from happening.

Interestingly, the Randstad study also mentions that the “prominence of the phrase ‘OK, boomer’ not only highlights the widening generational gaps, but also displays the unwillingness to understand different viewpoints of others.”

This tension creates a poor and uncooperative working environment.

Both older and younger workers experience age-based discrimination

A

bout one in five (17%) Singaporeans experience age discrimination in their workplace, according to global payroll and human resources (HR) leader ADP’s new Global Workforce View 2020 report.

The rate of age discrimination in the Singaporean workforce is higher than the APAC average of 12%.

According to the report, which has surveyed 1,908 employees, the eldest and youngest workers are the ones most likely affected by age discrimination, with 31% of surveyed respondents aged over 55 and 20% of surveyed respondents aged 18 to 24 have attested to have experienced age discrimination in the workplace.

Concurrently, the sectors which recorded the highest levels of age discrimination were finance, manufacturing, retail, and transporation and warehousing.

“Whilst the issue certainly isn’t unique to Singapore, I am sure many will be surprised at just how common an experience it is,” says Yvonne Teo, ADP’s vice president for HR in APAC. The report also says that three in five employees, or 60%, don’t know who to contact in case discrimination happens at work, and only 31% cites confidence in raising a claim in the event discrimination does happen in the workplace.

“Our data shows that the incidence of age discrimination is high, and the processes and protocols to address it are lacking,” Teo says.

Notably, 20% of surveyed respondents claim that the organisations they’re working for aren’t following good HR practices with regards to the prevention of discrimination. On the same note, 12% say their companies don’t even have HR functions.

“Businesses who do not have this dedicated function are likely to be least prepared to effectively prevent and respond to discrimination in the workplace,” Teo remarks. “As a minimum, business owners and managers need to educate themselves on antidiscrimination laws; not only is discrimination illegal, but employers have a duty of care to protect their teams from harassment or unfair treatment at work.”

Teo adds that every workplace must have established

Government action against ageism The Ministry of Manpower (MOM) affirms that the Singaporean employment laws protect employees against Yvonne Teo

Both older Singaporeans, and those newly joining the workforce, say they experience age discrimination in their careers discriminatory practices. According to local government portal gov.sg, the approach to handling workplace discrimination is via “education and enforcement” which the government applies by correcting stereotypes and changing employers’ mindsets, as well as by not hesitating to act against offending organisations.

In the event of possible workplace discrimination, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) investigates before reporting the errant employers to the MOM for enforcement. TAFEP was established in 2006 and has been quickly followed by the launching of the Tripartite Guidelines on Fair Employment Practices (TGFEP) to guide employers in adopting fair hiring practices.

In 2020, penalties for all forms of workplace discrimination were increased, with the view of stamping out such practice from throughout the labour market.

In March 2020, five employers were penalised by the MOM for putting up advertisements that showed preference for a specific age bracket. These companies were barred from employing foreign workers as well as renewing the work passes of its current foreign workers for a year.

Aside from investigations, the MOM will also “hold culpable key decision makers responsible, whether it is the CEO, chief HR officer, or line managers,” and won’t hesitate in naming them publicly as well as revoking their work passes should they be foreigners.

SINGAPORE BUSINESS REVIEW | MARCH 2021

19

INTERVIEW

HSBC Singapore sees a digital, green future for the banking industry Digital and sustainable products are the key to resilience, says Cherie Teng, head of Corporate Banking with HSBC Singapore.

T

he year 2020 saw a rapid shift in financial institutions and customers’ adopting digital tools for their financing needs—a trend expected to continue well into, and even beyond, 2021. Moreover, the rise of environmental consciousness amongst consumers across countries meant that the future of banking will be one that is both technology-driven and sustainable.

These facts are well-known to HSBC Singapore, who is no laggard in either field of digitisation or green financing—in fact, on the contrary.

“2020 has shown us how we need to be agile to weather through unforeseen circumstances and support our clients in times of need. Both digital and sustainability have shot up in the ranks of importance amongst businesses in Singapore,” Cherie Teng, Head of Corporate Banking at HSBC Singapore, told Singapore Business Review.

“Indeed we’re now seeing the decision-making process on these issues extend further than just the treasury functions. CFOs, key individuals and board members of businesses are now prioritizing the resilience of their businesses—digital banking and sustainable finance lie at the heart of building a stronger future,” she added.

Earlier in 2020, the bank launched the HSBC SME Green Loan, making them the first bank in Singapore to offer green loans designed specifically for SMEs. The service reduces the time, costs, and complexity SMEs associate with green financing, giving them a more accessible way to grow their operations whilst heading firmly towards a sustainable future.

“We hear from our clients that they often want to play a role in the sustainability agenda, but don’t know how or where to begin,” according to Teng. “That’s why we’re supporting businesses in accessing easier finance which is specifically allocated to green or sustainability-linked projects.

The COVID-19 pandemic also drove the takeup of digital services amongst HSBC Singapore’s commercial banking customers. Teng shared that 94% of the bank’s commercial banking clients are now on digital channel offerings on HSBCnet, whilst the number of PayNow Alias registrations more than tripled (239% up) since 1 April 2020.

Singapore Business Review caught up with Teng to learn more about her thoughts about the changes in the finance and banking space—and where the future of banking, as well as that of HSBC Singapore, is headed.

20

SINGAPORE BUSINESS REVIEW | MARCH 2021

2020 shows how banks need to be agile to weather through unforeseen circumstances and support clients in times of need

Cherie Teng, Head of Corporate Banking, HSBC Singapore

Could you walk us through trends you’ve observed in the digital payments space in 2020?

Those who had not already enabled online transactions prior to the pandemic may have found themselves grinding to a halt; this has prompted an unprecedented change in the way banking is now conducted.

At HSBC, 95% of our Commercial Banking clients have made the switch from manual to digital, not just on the payments front but also with their collection methods and other working capital functions of their businesses, so that they can monitor these transactions from their end as well.

Prior to COVID, cheque payments were still a commonly used payment method in certain segments of the market. Whilst this has dropped in recent years, largely due to government efforts to go paperless, there are still businesses that have struggled to make the shift.

The pandemic, partnered with the government’s efforts, has spurred digital payments take-up not just in Singapore but across the region. What trends or developments do you see happening in the digital payments space in 2021 and beyond?

There’s no doubt about that digital will continue to dominate in payments, whether for local or overseas payments. Indeed, the total value of digital payments in

INTERVIEW Singapore is expected to exceed US$21b by 2024, growing by 9.2% annually.

For companies conducting payments, they typically have to consider a myriad of things—whether they are performing salary GIROs to their employees or liaising with their overseas suppliers which often means they are juggling different currencies and different time zones.

There are different kinds of enhancements and support mechanisms that businesses can adopt to monitor their funds to and from different stakeholders locally and abroad, whether through their personal computers or their mobile devices.

The use of PayNow Corporate, for instance, allows digital payments to quickly be made via a QR code without the need to obtain bank details from beneficiaries. Such initiatives are practical, cost effective and meaningful solutions to help keep businesses transacting with their customers.

Moving forward, we are definitely seeing that there is going to be an increased expectation for this level of ease and convenience, no matter the dollar, denomination, and currency.

Finance will play a pivotal role in transitioning Asia towards a more sustainable future

How do you see ESG factors changing Singapore and the region’s banking industry in the next few years?

Singapore is raising the bar through the build of its green financing infrastructure and capability. Indeed it is participating in global and regional forums to discuss common language in what is considered ‘green’ so that consumers, investors, regulators, companies, and financial institutions are defining environmental objectives, measurement and performance criteria in the same way.

There is also a lot of collaboration in Singapore to build industry capabilities; HSBC Singapore is a founding partner of the Singapore Green Finance Centre –Singapore’s first research institute dedicated to green finance research and talent development.

We’re also seeing initiatives to bring green and sustainable financing into the mainstream of business and society. Just last 24 November, the Monetary Authority of Singapore (MAS) announced the Green and Sustainability-linked Loan Grant Scheme which we believe will support financial institutions’ endeavours in developing verified sustainable financing frameworks catered to SMEs, thereby allowing FIs to better support SMEs. In HSBC Singapore, we launched our Green Deposit Account for corporate clients to finance green initiatives such as renewable energy, energy efficiency and biodiversity conservation, providing a simple way for entities to support environmentally beneficial projects.

Apart from digital payments, what other online banking initiatives and activities have seen a massive surge since February this year? Have you noticed any trends? Which products do HSBC Singapore customers prefer?

Whilst going digital could be as simple as reviewing a business’ customer-facing online channels, there’s a grave mistake in thinking that it only applies to what stakeholders see.

Treasury and procurement functions across sectors are quickly needing to adapt to use digital to ensure business continuity, not just in the payments space but in every aspect of the corporate ecosystem.

Digital also supports the ability to trade, enabling businesses to digitally send instructions on letters of credit and guarantees, apply for trade loans and upload invoices for receivables financing. With many customers in business continuity planning mode we are seeing increased use of the ability to download digital copies of documents from business’ overseas suppliers’ banks.

In the past few years, and especially this 2020, consumers and businesses alike have become more conscious of their environmental impact. How has this affected the banking industry?

Finance will play a pivotal role in transitioning Asia towards a more sustainable future.

With the upcoming transfer of significant wealth to the millennial generation in Asia over the next decade, the new generation of investors are also more socially conscious and environmentally friendly than their parents. It is therefore not a choice for businesses anymore to incorporate green financing into their businesses, it is highly essential to stay relevant and competitive in order to make a difference in the market and be distinguishable.

HSBC recently set out an ambitious plan to prioritise

financing and investment that supports the transition to a net zero global economy—and helps to build a thriving, resilient future for society and businesses. At the heart of the plan is a pledge to reduce financed emissions from our portfolio of customers to net zero by 2050 or sooner, in line with the goals of the Paris Agreement. In Singapore, HSBC has delivered a total of US$1.2b of sustainable financing and investment as of the end of 2019.

HSBC Singapore

SINGAPORE BUSINESS REVIEW | MARCH 2021

21

INDUSTRY INSIGHT: HOTELS

Singapore hotels gearing up for the ‘new normal’ in the hospitality industry Innovation and a domestic focus have been the keys to surviving the upheaval.

W

ith the “new normal” for the hospitality industry arising, hotels in Singapore are now challenged to implement new and innovative business activities to recover from the economic effects of the ongoing COVID-19 pandemic.

Some hotels have continued their daily operations with stricter health and safety regulations, as well as different marketing strategies to attract more customers.

Hotels were among the hardest hit when Singapore’s nationwide circuit breaker (CB) measures were implemented in the second quarter of 2020. But the pain was set to continue as the other phases of the recovery were put in place without any movement on international borders.

With tourists effectively banned from entering Singapore, the vast majority of hotel rooms were being left unslept in - but relief of sorts was made through the increase in “staycation” promotions.

Pan Pacific Singapore - Work from Living Room

22

SINGAPORE BUSINESS REVIEW | MARCH 2021

In spite of such, the Singapore Tourism Board (STB) has allowed hotels to operate during Phases Two and Three of resumption of activities subject to compliance of safe management measures (SMM) and other appropriate guidelines.

STB has approved 234 hotels to resume service as of 27 November.

Amidst slow economic recovery and the decline in people’s trust in going out, different hotels in Singapore are now strategising their own “new normal” activities postcircuit breaker. Hotels now have to be creative in enticing customers to stay and avail hotel packages, whilst still complying with safety guidelines.

Maximising digital technology For Shangri-La Hotel Singapore, its focus remains on resuming operations cautiously despite gradual relaxation of restrictions.

Underpinning all their efforts is their commitment to create a

Hotels in Singapore are now strategising their own ‘new normal’ activities

trusted and safe environment for guests and hotel employees.

General Manager Tane Picken mentioned that the hotel has to ensure that all staff associates are comfortable and familiar with the new technologies and processes upon launching new initiatives, which include digital compendiums, holding virtual events, contactless order systems, amongst others.

“In order to uphold the level of service that the hotel is known for, we embarked on a series of training and simulation resulting with our team being fully fluent and embracing the new formats with full confidence,” Picken said.

The hotel is going contactless for restaurant menus and launching a digital concierge and compendium.

Guests can now request for housekeeping services and amenities, and in-room dining. They can also find out more information about the hotel through a simple QR scan and a

INDUSTRY INSIGHT: HOTELS Hotels need to rise to the occasion and identify opportunities and innovations in times of crises and seize them

Shangri-La launches digital concierge and compendium

couple of clicks on their smartphones or other mobile devices.

Clients may also conduct their hybrid virtual meeting events with ease in the hotel’s safe and comfortable spaces equipped with professional video-streaming capabilities. The hotel offers the option of catering meal experiences to the virtual event attendees’ satellite locations.

Shangri-La’s popular “buds” birthday party experience goes online as well. The celebrants can gather with their friends online as a buds ambassador hosts them through the event, complete with themed craft activities, birthday cake cutting, and singing along from the safe comfort of home.

The virtual birthday party package also comes with a selection of themes and activities that are bundled up in a lovely birthday box delivered to each guest’s home, to celebrate this milestone real-time over a video call.

Aside from the mentioned projects, Shangri-La Hotel also looks forward to bringing their digital initiatives as part of the ‘new normal’. Such initiatives include implementing new languages and a chatbot system for the hotel’s recently launched digital concierge and compendium for the hotel, which will allow for a more immersive guest experience.

“We hope that these initiatives will help to elevate our guest experiences in the hotel as well as ensure a peace of mind for the health and safety of our guests and colleagues. We want to provide a hassle-free experience for our guests and allow them to fully enjoy the unique experiences that the hotel has to offer,” Picken said.

Leveraging on domestic market With the gradual recovery for the hospitality industry set in 2021, hotels are starting to cater to locals first.

For Pan Pacific Hotels Group, they have to ensure they uphold their core philosophy of serving and caring for their guests whilst they launch new initiatives in meeting challenges to keep their business afloat amidst the crisis.

“Despite business activities being affected by the pandemic, we have been looking at our long-term plans to prepare ourselves for recovery and when business returns. We leveraged on this downtime to work on asset enhancement initiatives,” Chief Executive Officer Choe Peng Sum said.

The Pan Pacific Hotels Group has launched its Pan Pacific Cares programme formed by four pillars— caring for guests, caring for the community, caring for the associates, and caring for the environment.

Amongst their projects under the programme is the HERO (Healthcare Employees Recognition & Ovation) initiative launched in August. It aims to recognise healthcare professionals for their dedication to the nation amidst the pandemic by contributing 25,000 complimentary room nights.

The group also curated staycation experiences for locals amidst travel restrictions. This is in line with STB’s campaign to encourage Singaporeans in rediscovering the city.

“Our hotels are offering an array of experiences for Singaporeans such as offering interesting activities in partnership with local operators at Arab Street such as Batik Tulis workshop and Perfume Discovery workshop,” Choe said.

Pan Pacific Hotels Group also has launched their “work from hotel” daycation package, which include an 11-hour room access, secretariat services, in-room dining credits, complimentary afternoon tea set, and access to the gym and swimming pool, for those who are experiencing work-from-home fatigue.

Corporate businesses can also avail of Pan Pacific Hotels Group’s “Ezymeet” virtual meeting service.

The project allows professionals to conduct virtual meetings with ease as the hotels organise the necessary coffee/lunch breaks and meeting amenities that will be sent to the location of their clients’.

Taking it slow The industry may still be recovering from the impact of the pandemic, but recent events have certainly brought new lessons, especially in the hospitality management sector.

Picken noted that hotels need to rise to the occasion and identify opportunities and innovations in times of crises and seize them.

“These include identifying new ways to reach and interact with our guests, introducing new processes to improve efficiency and effectiveness, and supporting the health and safety of our colleagues and guests,” he said.

“In this period, we have also witnessed the resilience and selfless spirit of our fellow hoteliers, who are staying in the frontlines for the passion for what they do,” Picken added.

Meanwhile, Choe believes that even as the pandemic upended the hospitality industry, organisations have been forced to rethink their operational structure.

Organisations like Shangri-La Hotel Singapore and the Pan Pacific Hotels Group remain optimistic in welcoming the world back the soonest as they initially focus their services on locals in early 2021.

“We will be poised to receive international guests with value-added stay offers complemented with local travel experiences as travel restrictions ease and borders reopen over time,” Picken said.

“Hospitality organisations need to unify and rally together to overcome these challenges as another lockdown or circuit breaker will impact the industry in the longterm,” Choe noted.

SINGAPORE BUSINESS REVIEW | MARCH 2021

23

INDUSTRY INSIGHT: E-COMMERCE

E-commerce has become more prominent amidst the changing consumer trends

Innovations on the rise in the retail market Online shopping festivals and livestreaming are becoming the trend for e-commerce players in the region

T

he pandemic has led to limited consumer activities, but with e-commerce on their side, retailers have found a way to keep them shopping.

E-commerce platforms, according to the Consumer and Competition Commission Singapore (CCCS), each start off as a player in a single market, incrementally expanding into broader, multiple segments. Along the way, these platforms face major challenges in gaining a critical mass of multiple user bases on board.

With this, e-commerce platforms implement user acquisition strategies, engaging in efforts to convert offline consumers into online consumers.

Some of the strategies being employed include supplementing online businesses with physical brick and mortar stores, use of online reviews and ratings, feedback systems for consumers, comprehensive customer protection policies, and integration of offline experiences into online experiences to rebuild consumer confidence and trust in the platforms.

24

SINGAPORE BUSINESS REVIEW | MARCH 2021

Moreover, the platform user survey conducted by CCCS revealed that whilst customers display a certain degree of platform loyalty due to nonprice factors and strategies employed by e-commerce platforms, price continues to play an important role in attracting and retaining customers as a significant number of customers currently practise multi-homing.

These findings can be crucial in rebuilding the retail industry amidst declines in retail sales.

Recently, SingStat has reported an 8.6% fall in retail sales in October 2020 on a YoY basis, marking an improvement over the 10.7% YoY decline recorded in September 2020.

The estimated total retail sales value in October 2020 was about $3.3b, of which online retail sales made up an estimated 10.5%.

Despite where the sector stands at the moment, there have been visible efforts made by brands to rebound from drops in retail sales.

Leveraging on digital ecosystems Livestreaming and online shopping

Leveraging on digital ecosystems became a trend due to social restrictions and physical distancing measures imposed

festivals have also become a trend this year, partly because of social restrictions and physical distancing measures imposed to mitigate the spread of COVID-19.

One of the companies that rode on this trend is e-commerce and technology specialist Alibaba Group, which commenced its 11.11 Global Shopping Festival in November 2020 with focus on helping more merchants tap the surge in Chinese consumers’ demand for cross-border online shopping as a result of the ongoing global travel restrictions.

“We designed this year’s 11.11 festival based on this understanding of consumer behaviours and preferences, optimising the kinds of products being offered to shoppers, as well as developing more innovative ways to engage our shoppers,” according to Alibaba Group chief marketing officer Chris Tung.

The event was extended to 11 days this year to give merchants affected by the pandemic a longer period to interact with and build up

INDUSTRY INSIGHT: E-COMMERCE relationships with a bigger audience.

As Alibaba continues to cater to younger consumers in providing a more engaging shopping experience, livestreaming shopping took the center stage of this year’s 11.11.

About 300 celebrities and 400 company executives held individual livestreaming sessions for the first time during the festival, in addition to sessions hosted by top livestreamers.

According to a report by KPMG and AliResearch, livestream shopping has already taken firm roots in China’s e-commerce landscape, with the country’s livestreaming e-commerce market estimated to grow to $204.48b Tung mentioned the appeal of livestreaming lies in the trust between merchants and consumers, and how consumers can have authentic reviews of products on the spot.

“Livestreaming e-commerce adds value by its ability to showcase products in more detail, and offers consumers a better shopping experience than through the usual static online browsing,” he said.

A report from Knight Frank also noted that companies have been increasingly looking to hire influencers or opinion leaders to sell their products online, with some investing in their own in-house ecosystem of live streamers to create a hybrid online selling platform.

“Brands that can entertain and interact effectively with their customers online through entertaining and witty banter, livestream comments and information- sharing, are perceived to be more authentic and in tune with their followers as compared to those which use digital platforms purely for commercial transactions,” according to the report.

Recently, CapitaLand and Sea Group, the parent company of e-commerce giant Shopee, has also convened the Alliances for Action which aims to pioneer new operating models to help Singapore retailers digitalise, diversify their revenue streams, and export their brands overseas.

This is done to address everevolving consumer preferences in the current COVID-19 landscape.

Adapting to the changing trends Both participating for the first time in the 11.11 Global Shopping Festival,

brands Irvins and SecretLab noted that they fared well in the event. Both companies saw their sales exceed expectations as more customers turn to livestreaming studios to make their purchases instead of just browsing the online store, which has opened new doors for merchants like them.

SecretLab saw a massive surge of 13x in their 11.11 sales compared to a regular day. Its co-founder and chief executive officer Ian Alexander Ang stated that many customers are investing in home workstation upgrades which include a comfortable and supportive chair amidst work from home arrangements being the norm globally.

Meanwhile, Irvins’ debut saw their sales double and shoppers triple as compared to Tmall’s 618 mid-year sale earlier this year.

“Livestreaming helps to drive deeper brand awareness and product storytelling. Most importantly, it brings a strong level of credibility to our products, which translates to more buyers and sales,” said Irvins general manager Raymond Lo. Irvins said that with more small and medium enterprises and international brands being introduced into mainland China, it needs to continue maintaining close ties with its platform managers to outline unique selling points and develop differentiating strategies that will broaden their brand exposure.

“We need to be agile and be flexible in our branding and marketing strategies, be open toupgrading our digital skills and product showcases, and be aware of consumer trends and adapt to them accordingly,” Lo added.

Despite this progress, an American Express survey showed over half of

Livestreaming helps to drive deeper brand awareness and product storytelling

local shops in Singapore are worried that their business cannot stay open for more than six months if their sales do not recover to pre-COVID levels by end-December In addition, nine out of 10 of those surveyed also said their business sustainability is likely to be moderately to severely impacted if tourists do not return by mid-2021.

With this, the survey noted that three business model changes are expected to continue beyond the pandemic, which include communicating to customers via social media (83%), providing digital and/or delivery options (81%), and accepting more payment types (80%).

Staying on top Amidst a more digitised retail industry, retailers are urged to transform their businesses in order to stay on top.An Accenture survey revealed that 71% of Singapore consumers would be more likely to buy from a brand that focuses on better experience using immersive technologies such as augmented and virtual reality and 3D content.

Moreover, about three in five (59%) felt they would better remember brands that regularly engage them with immersive technologies.

With brands and consumers also generally having a positive experience in the 11.11 festival last November, innovations introduced in the event will likely remain.

Over 470 brands each generated more than $204m gross merchandise volume during the event, a sign that merchants have adapted well to the changes as well as the value creation facilitated by the event’s digital transformation.

Total retail sales in 2020

Source: SingStat

SINGAPORE BUSINESS REVIEW | MARCH 2021

25

INDUSTRY INSIGHT: BANKING

Rough road awaits Singapore’s three largest banks in 2021 With fiscal and monetary relief set to be withdrawn from across markets, the big three—DBS, OCBC, and UOB—are just about to feel the full brunt of the pandemic

W

hilst the major Singapore banks’ improved earnings in Q3 2020 marks a positive sign for the country’s banking sector, big challenges still await the trio of OCBC, DBS, and UOB as they face the full brunt of the pandemic in 2021.

Fiscal and monetary relief from across markets is set to be withdrawn by the first half of 2021—marking the period when the adequacy of the three banks’ core profitability, credit provisions, and capital buffers will be more rigorously tested, Fitch Solutions said in a report.

Already, OCBC and UOB saw their loans under relief contract as at end-September, following the expiry of a blanket moratorium on loan repayment in Malaysia. Such loans make up less than 7% of the three banks’ total loan portfolios, down from nearly 10% in Q2.

The ratio may yet increase as borrowers are still eligible to apply for targeted relief in Q4, but Q2 has likely been the peak. All three banks acknowledged that loan impairments remain uncertain.

The trio also face persistent pressure on net interest margins (NIMs), with ample liquidity chasing quality assets and driving lending yields lower.

Fitch does not see any substantial improvement in the big three’s NIMs in 2021, even with a reduction in the banks’ cost of funds in the second half of the year likely mitigating interest-income headwinds. This is echoed by DBS Group Research analyst Rui Wen Lim, who says that NIMS would likely decline between 2-9 basis points (bps) across the big three banks for 2021.

As of late 2020, DBS management is guiding for NIM to

Profits of Singapore banks will continue to remain under pressure in 2021

26

SINGAPORE BUSINESS REVIEW | MARCH 2021

Credit provision declines was unsurprising as Singapore banks made large general provisions in the first half of 2020

stabilise between 1.45% to 1.50% for the fiscal year, whilst UOB’s management is looking at a run rate of ~1.5% for FY2021.

Calm before the storm The quarter ending 30 September saw more positive outcomes for the banks. In particular, DBS and OCBC beat expectations by posting more than $1.29b and $1.02b in net profits, respectively. This is higher than UOB Kay Hian Koh’s projections of $1.11b and $922m.

UOB’s credit provisions are slightly higher in Q3, whilst DBS and OCBC shaved provisions in Q3 compared to Q2, dropping 35% quarter-on-quarter (QoQ) and 55% QoQ, respectively.

The decline in credit provisions was unsurprising as the Singapore banks made large general provisions in the first half of the year that made their credit costs

INDUSTRY INSIGHT: BANKING Singapore banks are expected to retain a defensive strategy all throughout 2021

Credit costs in Asia Pacific banking systems

Source: Fitch Ratings, bank reports

amongst the highest among developed markets in APAC, according to Fitch Ratings.

But Fitch warned that credit costs are likely to stay high until H1 2021 as relief tapers off. “Credit costs at the bottom of the banks’ guidance over 2020-2021 will provide them with additional earnings cushion but will not be large enough to change our scoring on the profitability rating factor.”

On the upside, operating income is consequently likely to improve only slightly in 2021 as trading and investment income normalise from 2020’s high base and fee revenue recovers with the reopening of economies across APAC, according to Fitch.

On the defense Earnings will continue to lag through 2021 as the trio continues to resolve impaired loans from the pandemic-induced economic shock. Lower risk-adjusted earnings in 2019 will also keep the accumulation of retained earnings slow. This, in turn, will weigh on banks’ capital ratios, noted Fitch.

S&P Global Ratings echoed the same sentiment in a separate report, noting that banks have ramped up provisioning to prepare for expected credit losses in a postCOVID world. The three banks’ are forecasted to report 2021 net profits 20%-30% lower compared with pre-pandemic 2019 levels.

“Profits of Singapore banks will continue to remain under pressure in 2021 due to significant provisioning set aside for expected credit losses from the COVID-19

recession. Ultra low interest rate environment will likely persist and put the squeeze on interest margins,” says S&P’s primary credit analyst Ivan Tan. On the other hand, analyst DBS Group Research’s Lim has a more positive outlook, and expects the banking sector’s earnings to grow by 21% YoY next year compared to 2020, at least. Growth will reportedly be driven by lower provisions as total income is likely to face some pressures from lower interest rates, amidst recovering non-interest income.

For 2021, UOB Kay Hian analyst Jonathan Koh forecasts DBS to register an earnings growth of 4.7% and OCBC to report an earnings growth of 34.2% on the back of lower credit costs.

The banks’ operating expenses may also come in lower than expectations as Singapore banks embark on cost cutting initiatives, including occupancy cost, although higher than in 2020, said DBS’ Lim. Meanwhile, compared to 2020’s low base, discretionary expenses may be 5-7% higher for the fiscal year of 2021 as banks continue to invest in technology infrastructure.

Singapore banks’ ample provisioning for the year of 2020 could also equate to lower credit costs for FY2021, and DBS’ Lim forecasts credit costs to decline 22-44bps in during the fiscal.

Overall, banks are expected to retain a defensive strategy all throughout 2021 and continue to build their buffers and increase provision coverage to combat high-

er delinquencies, especially as loan moratoriums gradually expire.

Loans and dividends The non-performing loan (NPL) ratio may also rise in 2021 to around 5-15% of total loans, says S&P’s Tan. However, Tan is not expecting a dramatic spike in NPLs unless the recession deepens or drags on.

“The progressive phase out of the moratorium over the course of 2021, with the longest extension granted to businesses needing the most help, should also smooth the transition,” S&P’s Tan added.

The country’s banking system’s overall NPL ratio rose to 2.7% in Q3 2020 from 2% in the same quarter in 2019.

As for loan growth, Jefferies Equity Research has taken a cautious stance given that whilst local banks are expecting a rise in credit demand from corporates in the fourth quarter of 2020 and first quarter of 2021, the operating environment remains weak for businesses.

However, whilst MAS’ financial stability review cautions households to be mindful of debt keeping in view the rising unemployment, Jefferies noted that new housing loans granted are up in Q3 2020 and has reached the same level seen before the July 2018 cooling measures, at about $12b per quarter.

“In our view, mortgages may continue to grow at the expense of construction loans. Trade loans are more interesting, which seems to have stagnated despite trade recovery,” the report noted.

Dividend-wise, DBS and OCBC are expected to provide attractive 2021 yields of 4.8% and 5.6%, respectively. Dividend yield may also further improve to 5.9% for DBS and 6.3% for OCBC for 2022, assuming dividends are restored back to pre-COVID-19 levels, concluded UOB’s Koh. However, the Monetary Authority of Singapore (MAS) may decide to extend the 60% dividend cap it imposed in 2020, given that capital ratios are weaker than when the regulator first imposed the cap, Maybank Kim Eng Thilan Wickramasinghe warned.

SINGAPORE BUSINESS REVIEW | MARCH 2021

27

COVER STORY

Investors will face plenty of risk, but also opportunity, during the Year of the Ox in 2021

Where to invest your money in 2021 2020 was a year of disruption for many investors but there is light at the end of the tunnel. Here are eight diverse investment ideas to consider for the year ahead in 2021.

P

olitical upheaval, social unrest, and continuing trade wars marked a tumultuous year for business and investors alike in 2020. And that’s even before the global impact of the COVID-19 pandemic – and the ongoing lockdowns and business restrictions – were factored in.

But while what goes down doesn’t necessarily have to come back up, the overwhelming view of economists and investment managers is that recovery is on the cards in 2021.

Fast work on several COVID-19 vaccine options, coupled with a greater understanding of spread minimization techniques among policymakers, has meant many have rung in the New Year with a renewed sense of confidence.

Andrew Tilton, Chief Asia Pacific Economist with Goldman Sachs Research, has told the firm’s Exchanges podcast that he is also optimistic about growth in the Asia Pacific region in particular.

“China – the biggest economy in the region – has already recovered quite a lot, and is now showing growth on a year-by-year basis,” he said, adding that effective vaccination programmes will be provide another kick-start to local markets. “It’s really widespread vaccination that will allow those remaining restrictions to be lifted and have another reacceleration of growth to get back to more or less normal.”

Nigel Green, CEO and founder of independent fintech advisory deVere Group, says 2021 is set to be a year of major investment risks – but also massive opportunity.

28

SINGAPORE BUSINESS REVIEW | MARCH 2021

Andrew Tilton

Ronald Chan

“2020 was a year for which nobody had planned,” he said.

“This included investors, many of whom were caught spectacularly off-guard by not having properly diversified portfolios, he added.

“Looking ahead to 2021, it is likely that investment headwinds will still exceed the tailwinds – but, I believe, that there are also more major investment opportunities to be had in the next year than perhaps in the last decade.”

Whilst we here at Hong Kong Business have no crystal ball, and can’t predict the future, we have talked to some of the leading analysts and institutions from across Asia and around the world. What follows are eight of the most interesting examples from their advice to clients for the year ahead.

Whichever way your investment portfolio heads in 2021, and the Year of the Ox, we wish you all the best of luck and prosperity. Stay well, and invest with care.

Idea 1: Asian equities When it comes to regional views of the stock markets, Asia is seen as a likely strong rebounder in 2021, according to a wide range of analysts and guidance.

Ronald Chan, Chief Investment Officer (Equities, Asia ex-Japan) for Manulife, describes the investment outlook for the Asia region as “greater than the sum of its parts”. He says robust fiscal and monetary stimulus globally and in Asia allowed equities to recover the worst of the pandemic-

COVER STORY induced downturn, with regional equity indices ending the year with a nearly 19% return in 2020 (albeit with significant volatility across different markets and industries).

He is expecting growth of roughly 5.5% overall during what will still be a period of gradual and uneven recovery.

BlackRock, meanwhile, says the region is well placed to take advantage of the global recovery. “Many Asian countries have been more effective at containing the virus – and are further ahead in the economic restart,” it has advised clients.

“We see the region’s tech orientation allowing it to benefit from structural growth trends.”

Schroders is also bullish on Asia, but has a particularly confident outlook for Chinese equities. These have already rebounded faster and stronger than other markets, in line with the “first-in, first out” story of the Chinese economy’s pandemic. “We believe sectors providing exposure to long-term growth themes in the country will continue to outperform. In particular, we like areas including industrial automation, electric vehicles and components, and supply chain localisation,” said Louise Lo, Head of Greater China Equities for the global fund manager, based in Hong Kong.

Idea 2: Asia-Pacific REITs Many real estate investment trusts (REITs) took a significant hit from the lockdowns of 2020, but several analysts say that gives them strong room for renewal and growth in 2021.

Hui Min Ng, Portfolio Manager within Manulife Investment Management, says this is particularly true where “lower for longer” global interest rates are now providing a generous tailwind for property development.

“Moving into 2021, we envisage the macroeconomic backdrop should gradually improve across the region, with significant dispersion in economic growth across the region,” she says. That should create a recovery in cashflows for retail landlords (given the low base of 2020), while industrial REITs are likely to remain stable throughout 2021 “with growth boosted from accretive acquisitions”.

“The main attraction of Asia Pacific REITs as an asset class is the stable, sustainable payout of dividends to investors. While this assumption was challenged in early 2020, the response by governments and central banks helped to stabilise the real estate sector (and) moving into 2021, we believe an improving economic outlook and continued low interest rates should be beneficial for the asset class,” Ng said.

In Singapore, DBS Bank is also confident of the local REIT Top 10 Asia Pacific REITS

Source: The MSCI AC Asia Pacific REITs Index, December 2020

Louisa Lo

Mary Jane McQuillen

market, but says mid-cap trusts are offering particularly good value to investors at this time.

“In general, mid-cap REITs are usually able to produce better returns because of their ability to act quicker than large-cap REITs, while also being more financially stable than their small-cap counterparts,” the bank has advised.

“And now, mid-cap industrial S-REITs have ample valuation buffers, while some have also gradually increased their overseas portfolio over the years, making them more diversified.”

Idea 3: Technology Technology assets, particularly those with exposure to cloud computing and the work-from-home revolution that was a hallmark of 2020, enjoyed a surge in valuations over the past 12 months. While many have predicted that rate of growth to slow down in 2021, some analysts are predicting an unprecedented rally well into the New Year.

Scott Glasser, Co-Chief Information Officer and Portfolio Manager with ClearBridge Investments is one such investor still bullish on big tech. “Simply looking at valuations would suggest technology stocks are overbought and most at risk of disappointing investors in 2021,” he says. “Yet much of market forecasting is based on past analogs and we would argue that given the unique nature of the COVID-19 pandemic, which caused voluntary shutdowns of broad swaths of the economy, such analogs are not as applicable today.”

Research from State Street in Asia Pacific goes some way to backing this theory up. Its survey of institutional investors in the region found a majority (64% in Asia Pacific, and 68% globally) expected continued and improved investment in new technology in 2021. Those moves to replace legacy IT systems with new tech and services are likely to maintain demand and revenues across the global tech market.

Idea 4: ESG Investing Successfully managing environmental, social, and governance issues has become so vital for organisations throughout the developed world, that it even has its own investment trend that has gained plenty of interest – and funds – from the finance community. UBS’ Chief Investment Office says sustainable, or “Impact Investing” is also seeing some strong relative returns for its dedicated funds, portfolios, and indicies.

“So far, during the global coronavirus outbreak, MSCI Asia ex-Japan ESG Leaders have outperformed the regional benchmark by over 200 basis points,” it advised clients in 2020. “While past performance is no guarantee of future performance, we expect ESG considerations to continue to influence corporate and investor actions in Asia in the future.”

Mary Jane McQuillen, Head of ESG Investment at ClearBridge is similarly upbeat about the sector’s growth prospects in 2021.

‘We expect many of the drivers of strong returns for stocks with strong sustainability characteristics to continue in 2021,” she says. “We believe renewable energy will enjoy long-term secular growth as the world SINGAPORE BUSINESS REVIEW | MARCH 2021

29

COVER STORY transitions to a less carbon-intensive economy and as solar and wind power has become more cost-competitive with fossil fuels. The push to lower emissions and increased energy efficiency will (also) continue to support the growth of electric vehicles (EVs) and their evolving supply chains.”

Idea 5: Gold While the world is looking forward to a year of recovery and growth in 2021, the previous year has taught us that uncertainty will likely persist for many years to come. That has brought some of the tried and tested safe haven investments back into focus, and the most trusted of these continues to be gold.

HSBC is describing gold as an important “portfolio diversifier” in 2021, particularly with ultra-low yields on highquality bonds expected to persist. “(Gold’s) strong relationship to real interest rates should offer protection against positive inflation surprises,”it added. “There remains an abundance of uncertainty, with the imminent risks of Brexit, continued geopolitical uncertainty, and the as-yet uncertain success of a coronavirus vaccine.”

Goldman Sachs is also preparing for a continued rally of gold prices and associated assets. It holds a US$2,300 per ounce target for 2021, which would represent a 22% rally from current levels. In a recent investors’ note, Goldman analysts Mikhail Sprogis and Jeffrey Currie said this prediction was based on expectations for renewed concerns over inflation globally.

But not everyone is convinced. Some analysts suggest gold’s safe haven status has come under pressure during the current crisis, leading to greater than expected volatility last year. There is also growing demand pressure from a very different asset that many are claiming has alternative safe haven properties.

That forms the basis of our next investment idea.

Idea 6: Bitcoin It’s been a tumultuous ride for the world’s best-known cryptocurrency over the last few years, but 2020 saw it catch the eye of a serious level of institutional investment. Bitcoin’s price grew over 300% last year, boosted in part from its acceptance by mainstream companies such as Paypal. Many now see it as an alternative safe-haven for gold over the long term (the term “digital gold” is now being used to describe bitcoin), although with significantly greater price volatility in the short term.

Nikolaos Panigirtzoglou, Senior Global Markets Strategist with JP Morgan, believes that the adoption of Bitcoin by institutional investors has only just begun compared to holdings of gold. He sees Bitcoin’s intrinsic value rising significantly over the coming years as mining activity improves, although near-term risks are clearly skewed to the downside.

“The sponsorship we have seen for bitcoin through corporates and respectable asset managers is changing the views of many baby boomers (who have long-held a preference for gold as their investment safe haven of choice)”.

Idea 7: Green hydrogen It’s the first, lightest and most abundant element in the universe, and it could provide a low-impact solution to the world’s energy needs. While currently, 99% of hydrogen is captured using fossil fuels, climate scientists say the technology to “greenify” these carbon-heavy processes is now within sight.

Bank of America Global Research says the stars are about to 30

SINGAPORE BUSINESS REVIEW | MARCH 2021

Gold price rises during volatile 2020

Source: www.gold.org/goldhub

Nikolaos Panigirtzoglou

Nicholas Hardingham

align for a potential $11 trillion market, with green hydrogen supplying up to 24% of energy needs by 2050. It says the falling cost of electrolysers (down 50% in the past five years, and estimated to fall 60% - 90% further before the end of the decade) used to produce green hydrogen, technology improvements, and the global focus on sustainability all highlighting the potential of green hydrogen as a revolutionary fuel source.

“Scaling up any new technology entails challenges, but we think now is the time to look at it, before it goes mainstream,” the Bank advised in a Hydrogen Primer report from September last year.

Beneficiaries of an effective green hydrogen solution will include the renewable energy sector, utilities, industrials, and chemicals. The oil and gas industry and coal sectors, meanwhile, can expect significant loss of global demand, Bank of America Global Research says.

Idea 8: Emerging market bonds Both corporate and government-based bonds offer a stable investment choice in 2021, but analysts have an overwhelming preference for emerging market bases for these assets.

Nicholas Hardingham, a Senior Vice President with Franklin Templeton Fixed Income, says the growth gap between advanced economies and the emerging markets is set to widen further this year, with China in particular heading for an 8.2% expansion of GDP. “This is important because China is a growth engine to which many other emerging markets sell their commodities,” he said.

Emerging market government bonds are currently yielding around 4% more than their counterparts in advanced economies, and Hardingham sees that trend likely to continue into the year ahead. “As 2021 starts, government debt is expected to rise to 125% of GDP in advanced economies, compared with 62% in emerging markets.”

Standard Chartered’s Wealth Management Advisory is also positive on emerging markets, particularly Asia. “We prefer Asian USD bonds and Emerging Markets bonds as they should benefit from the weaker USD, stronger inflows, reduced geopolitical risks given the US election results, and potential for capital appreciation given cheap valuations,” it advises in its Market Outlook 2021 report.

THOUGHT LEADERSHIP ARTICLE

Achieving a greener future across Singapore’s built environment

Sustainability is the new focus for the real estate industry, and the key to success lies in renewed innovation.

Singapore’s government has pledged to have 80% of their buildings to be certified “green”

W

hen it comes to the drivers of climate change, it is the world’s cities that are by far the biggest source of the carbon emissions warming the planet. The built environment accounts for nearly 40% of carbon emissions globally.

So it’s no surprise that those responsible for developing urban centres are now looking at strategies to reduce their impact on the wider environment. Sustainable solutions have been particularly sought after in commercial real estate where three factors are driving a new surge in innovation.

Firstly, governments are sensing a new level of urgency in the need to reduce the carbon footprints, and are now enforcing strict standards and targets. In Singapore, the government has pledged to have 80% of the buildings in the city-state to be certified “green”. Its commercial real estate developers have been quick to embrace the challenge, and after just nine years of the pledge - some 40% of local buildings have been transformed.

Change is also being driven by the end users of urban infrastructure: consumers are the second driver, and are demanding much greater attention be paid to the total carbon footprint of the facilities that they use. They want greater flexibility and tailored solutions to fit their own individual goals and lifestyle.

Besides compliance and market demand, continuous development in digital technology has been a third and equally important enabler of the trend towards more sustainable building solutions. The smart technologies provide customers with the tools necessary to move into a new era of connected and lowcarbon operations, while allowing businesses to manage resources more efficiently to meet stakeholder expectations. The rise of digitally connected and sustainable smart buildings has created a whirlwind of innovation that continues to meet and then raise consumer expectations.

Digital to the rescue As we move into a new decade, all of these drivers are combining to challenge long-held perceptions of what a building is and does.

Gone are the purely functional designs that provided accommodation for workers or infrastructure – today a building can be its own integrated digital ecosystem.

Developers that place the need for sustainability, along with the experience of their end consumers first and foremost, are finding they can continuously create new value and build on these digital economies of scale.

Organisations need to map what the future of their business will look like in this more sustainable era. They need to understand the threats and opportunities, whilst defining a plan to ensure the greatest overall impact.

SP Digital’s mission is centred on this paradigm. It pushes itself to develop and to deploy sustainable energy solutions for businesses that make an otherwise complex journey simple and streamlined. The wide range of innovations that make up its Smart Digital Suite focuses on cost optimisation, energy efficiency, and improved occupant wellbeing.

Chang Sau Sheong, CEO of SP Digital, says that this combined focus allows its partners and users to push forward on the far-reaching goals demanded by the world of 2021. “SP Digital offers a foundation to advance the sustainability goals of the built environment with our EnergyTech solutions,” he says. “We believe that each of us must play our part to ensure a low carbon, smart energy future for Singapore.”

Embracing digitisation Some of the most visible examples of innovative digital solutions in the built environment are based around the Internet of Things (IoT) and artificial intelligence (AI).

With this in mind, SP Digital has developed

its Smart Digital Suite platform that integrates different building systems, data sources and solutions, providing customers with a holistic and seamless experience when managing their buildings and interacting with their occupants.

The platform leverages AI and IoT to empower building managers with the knowledge and tools to make informed decisions, enabling high-performance buildings by almost every sustainability measure, and further driving positive behavioural changes amongst occupants.

THE SMART DIGITAL SUITE LEVERAGES AI AND IOT TO EMPOWER BUILDING MANAGERS AND FURTHER DRIVE POSITIVE BEHAVIOURAL CHANGES AMONGST OCCUPANTS With energy management as the core, customers have the option to select from various add-on modules in the areas of tenant sub-metering, managing distributed energy, electric vehicle charging systems, asset management, sustainability, indoor environment, user engagement, and much more.

To drive greater sustainability branding for commercial buildings, an available module is the Sustainability Display. This digital display, typically installed at high-traffic spaces such as lift lobbies or reception areas, provides timely data on the building’s aggregated utilities consumption and its resulting carbon emissions, which can be monitored over time and compared to other similar buildings or facilities.

The Sustainability Display further complements the SP Utilities app, which leverages behavioural nudges, gamification and sustainability tips to engage and to reward users for taking more environmentally friendly actions.

Across the full Smart Digital Suite, SP Digital’s knowledge and innovation enable energy efficiency, operational efficiency, and improved occupant well-being and comfort for the built environment. The company vows to continue enhancing its Smart Digital Suite of solutions to better serve customers.

To know more about SP Digital, the Smart Digital Suite, and its full portfolio of advice and services, contact: spd@spgroup.com.sg.

SINGAPORE BUSINESS REVIEW | MARCH 2021

31

ECONOMIC OUTLOOK

MAS expects a gradual and uneven growth trajectory for the Lion City

Recovery expected in multiple industries this 2021: Monetary Authority of Singapore

More vulnerable sectors will take a longer time in seeing potential relief, say analysts.

A

fter the pandemic-induced recession in 2020, the Monetary Authority of Singapore (MAS) expects the country’s economy to finally expand in 2021, discounting a worse resurgence of COVID-19 cases. GDP growth has already rebounded in Q3 following a steep decline in the preceding quarter, but the momentum is likely to be subdued given headwinds in some domestic markets and the still-struggling travel sector.

The recovery witnessed in Q3 was brought about by a resumption in domestic economic activity as circuit breaker measures were relaxed and policy stimulus took effect, MAS said.

The consumer services and construction sectors rebounded, whilst positive growth was seen again in the manufacturing industry as the global demand for semiconductors saw a sustained rise and petrochemicals output soared. Whilst activity in the Lion City’s major trading partners have recuperated, expansion is set 32

SINGAPORE BUSINESS REVIEW | MARCH 2021

to moderate due to a pickup in COVID-19 cases.

On their part, the Ministry of Trade and Industry (MTI) revised its 2020 outlook, forecasting the economy will shrink between 6% to 6.5%, narrower from the previous range of 5% to 7%. Based on estimates released by the MTI in October 2020, the economy bounced back 7.9% on a QoQ seasonally adjusted basis in third quarter.

Darren Tay, senior Asia country risk analyst for Fitch Solutions, agreed with the MTI’s revised forecast, saying it is close to Fitch’s own 6% contraction. Looking ahead into 2020, he believes that the financial sector will still outperform, whilst “more vulnerable” sectors such as retail and hospitality will have to wait for some quarters before seeing potential relief. “Lower consumer demand will continue to be an issue amidst higher unemployment for some time,” he said.

Indeed, the finance & insurance sector fared better than other sectors

GDP growth is likely to be subdued given headwinds in some domestic markets and the still-struggling travel sector

in Q3, when it reversed the 1.4% QoQ drop SA recorded in Q2.

“Pockets of resilience” were found in insurance, MAS said, as the industry gained from robust demand for life products. However, the performance of the banking sector remained lukewarm as credit demand fell, with ACU loans dipping 0.5% in August from end-June whilst DBU loans stayed in the red at -0.3%, dragged down by manufacturing and housing loans, the central bank reported.

What will the new year bring?

MAS expects a “gradual and uneven” growth trajectory for the Lion City as 2021 knocks on its door. As most industries have already reopened, the next few quarters will see a decline in supply-side growth momentum, but demand shocks will endure as income loss and uncertainty still plague households. As a result, economic growth momentum is likely to be sluggish in Q4 2020 and remain modest in 2021, not counting

ECONOMIC OUTLOOK Some pockets of the economy are not expected to recover to preCOVID levels even by the end of next year

DBU and ACU non-bank loan growth

Source: MAS

more work resumptions in industries dependent on foreign workers.

“Some pockets of the economy are not expected to recover to preCOVID levels even by the end of next year: in particular, activity in travel-related and some contact-intensive domestic services could still fall short of pre-pandemic levels until health risks abate,” the central bank wrote.

The rebound experienced by the consumer-facing sector should wane come Q4. In the demand side, it is still muddy whether the pickup in F&B and retail could be maintained as tourist arrivals remain abysmal and economic unpredictability will hinder household spending, MAS argued. Besides, the possibility of more firm closures in the coming months should not be discounted as government wage subsidies decline, it added.

On the other hand, industries that rely on foreign workers can anticipate a more notable recovery in the last quarter of 2020. Backlog in the construction sector should ease as contracts awarded should rise in the succeeding months, buoyed by public residential developments and upgrades, as well as projects such as the Jurong Lake District, new healthcare facilities, and constructions such as the Cross Island MRT Line.

Notwithstanding the slowdown, the travel sector should see some domestic support owing to the Singapore Tourism Board’s $45m marketing campaign and $320m worth of tourism vouchers for local tours and staycations, MAS said.

As is already expected, digitalisation will play a vital role in the further growth of the ICT and finance sec-

tors, with the former likely experiencing a stable path thanks to its relative resiliency. The expansion of multinational companies such as Tencent and TikTok’s parent firm ByteDance into Singapore should spur long-term prosperity in the sector, as well as increase in mobile service revenue.

For the finance sector, even if credit demand could remain under pressure from a dampened risk appetite, it could be counteracted by improving fee incomes “amidst a healthy investment banking pipeline and recovering wealth management incomes,” the report said. Credit card networks players could also provide support as the adoption of digital payments services skyrockets, due to the digitalisation of spending.

The COVID-19 vaccine should also not be overlooked as a potential catalyst for faster recovery, Tay opined. In late November, CNBC reported that the vaccine candidate

ARCT-021, co-developed by American biotech firm Arcturus Therapeutics and the Duke-NUS Medical School, has shown positive interim results and is in good standing to be delivered in 2021. Media reports later came out that Singapore can serve as an air cargo hub for the vaccines, with Singapore Airlines being readied for global transport.

“A faster than expected rollout of the vaccine, not just in Singapore, but around the region at least, will likely drive a much stronger acceleration in the recovery.”

On a negative note, another uptick in worldwide COVID-19 cases could push for more shutdowns and weaker-than-expected credit demand, or further decay in domestic market conditions could threaten growth outlook, warns MAS. Even if the 2020s did not begin on a high, there is still room for prosperity in the new decade.

According to Tay, there is much at stake for more global appetite on trade liberalisation and growth in key economies, particularly the United States and China, since Singapore’s economic performance is closely tied to the rest of the world.

“We see balanced risks for Singapore between a much more insular mood regarding trade and globalization especially in the US and other parts of the developed world, and a slowing China on the one hand, and Asian efforts to continue liberalising trade and the generally faster pace of development in Asia’s emerging markets compared to the rest of the world, on the other,” he said.

Singapore’s real GDP growth

Source: DOS

SINGAPORE BUSINESS REVIEW | MARCH 2021

33

ANALYSIS 1: NATIONAL BUDGET

Singapore’s Budget 2021 will highlight the country’s economic direction during an important year of recovery

Technology and workforce are top of mind for Singapore’s budget watchers The Big Four accounting firms weigh in on Singapore’s policy and financial direction, ahead of the Budget 2021 unveiling in the middle of this quarter.

O

n February 16, after this issue of Singapore Business Review has gone to print, Deputy Prime Minister, Coordinating Minister for Economic Policies, and Minister for Finance Heng Swee Keat, will deliver Singapore’s FY2021 Budget Statement to the Parliament.

This will be considered an important framework on the steps Singapore will take as it tackles an optimistic new year, after the height of the COVID-19 pandemic that greatly challenged every nation.

According to Soh Pui Ming, EY’s Head of Tax in Singapore, with the worst of the pandemic behind, there is now a need to focus on supporting businesses to help them strengthen and transform for the future.

This should be done while also ensuring that the most impacted individuals and households are given their own help to rebuild their 34

SINGAPORE BUSINESS REVIEW | MARCH 2021

lives and livelihoods.

That is a common suggestion from each of the Big Four accounting firms, in each of their annual previews of the Budget.

Transformation through tech KPMG is also looking for Singapore to maintain a key focus on transformation throughout the year ahead. According to partner and head of tax at KPMG Ajay Kumar Sanganeria, the innovation of 5G will be the key driver, especially for data consumption.

It will also create demand for innovation in the development of technological platforms.

“There is a need for more government support to enable faster 5G development and adoption on a larger scale, thus we propose tax depreciation for spectrum rights payments to offset

Transformation of industries to accommodate digitalisation will be an integral part of Singapore’s adoption 5G technology

costs to telcos. If left unaddressed, such costs may potentially be priced into products and services for consumers,” said Sanganeria.

He proposed that Singapore set up a 5G technology and innovation fund, to provide grants of up to 50% of expenditure for prototyping and innovation of 5G-enabled solutions.

He also suggested extending the existing Market Readiness Assistance grant to provide funding for enterprises exploring solutions in 5G-ready markets.

Also integral to a 5G-ready nation, will be the transformation of industries to accommodate digitalisation.

PwC has noted that local startup enterprises will have to incur additional expenditure (spanning from hardware infrastructure costs to labour costs of digitising data, information migration and staff

ANALYSIS 1: NATIONAL BUDGET Companies stand to benefit from Singapore’s wide and strong Free Trade Agreement FTA network during 2021

The innovation of 5G will be the key driver, especially for data consumption

training). If the government stepped in with targeted reliefs and funding, this would help businesses alleviate the investment cost of “going digital”, whilst also encouraging them to digitise their data and modernise their processes. The relief for expenditure would encourage the adoption and use of data analytics.

But PwC warned that even by going digital, the importance of keeping up with cybersecurity should not be overlooked.

In Cisco’s 2021 Security Outcomes Study for Asia Pacific, at least seven out of 10 Singapore firms aren’t yet successful at dealing with cybersecurity challenges.

PwC pointed out although the SME Go Digital Programme supports SMEs with pre-approved solutions, medium-sized to larger corporations do not qualify for such aid and are more likely to require advanced or customised solutions.

“Data security at any level of business is necessary and should be encouraged to facilitate Singapore’s efforts to be a trusted digital economy as a whole, and to preserve that trust in a digitally connected world,” PwC noted in its Budget preview statement It suggested that those companies who do not benefit from the programme should be allowed to claim enhanced tax deductions or enhanced capital allowances for costs incurred to safeguard against cyber security and data security risks.

Other companies that invest in cybersecurity systems should also be able to take advantage. They should be given the option to convert capital allowances on such expenditure into cash grants, PwC has recommended.

Workforce development In June 2020, Senior Minister and Coordinating Minister for Social Policies Tharman Shanmugaratnam said that Singapore needed to strengthen its social compact by helping those who had lost jobs find work.

Deloitte has agreed with this sentiment, and says reskilling and upskilling workers should remain a priority for Singapore in 2021.

It proposed that the government extend the existing Jobs Growth Incentive. The incentive supported employers to accelerate hiring of local workforce, specifically during the period from September 2020 to February 2021. The support was 25% on the first $5,000 of gross monthly wages paid to all new local hires or 50% for mature local hires (ages 40 and up) and all persons with disabilities (PWDs).

But Deloitte has urged the government to extend the scheme until August 2021, based on its expectations that the job market will remain muted. To finance this,

Deloitte has suggested tapering down the support to 20%, with 40% for mature local hires and PWDs. Food security The panic buying and hoarding seen during the early parts of the pandemic could be traced back to disruptions in the supply chain, according to both PwC and KPMG. They have each argued that a resilient food supply chain is vital for Singapore’s continued stability.

The Singapore government is targeting to have 30% of food to be produced locally, by 2030.

To help achieve this and at the same time to strengthen the food supply chain, KPMG said Singapore should further encourage urban farming using existing real estate assets, maximiise current land usage for vertical farming, and boost diversification into sustainable sources of protein.

The firm encouraged the government to introduce a new incentive for agri-tech and aqua-tech industries, like tiered concessionary income tax rates.

Meanwhile, PwC suggested reducing the tax of construction for buildings used for food farming purposes. This could be done by extending the Land Intensification Allowance (LIA) to such relevant sectors and assets.

“The overall cost for this sector may be lowered further with subsidised land leases and GST suspension on the importation of specialised equipment and raw materials,” according to PwC. Manufacturing as a cornerstone In its budget proposal, PwC highlighted that core manufacturing

The government extend the existing Jobs Growth Incentive to support employers and employees

SINGAPORE BUSINESS REVIEW | MARCH 2021

35

ANALYSIS 1: NATIONAL BUDGET Further workforce development will be Singapore’s leverage against turbulent times

Budget Recommendations from the Big Four EY •

• •

Singapore should further maximise current land usage and boost diversification into sustainable sources

should be one of the focuses for Singapore policymakers in 2021. This industry has the capacity to support growth of the services industry and will attract whole ecosystems, it said.

PwC suggested giving priority focus to industries that are low on labour and overhead demands, but where final stage processing can economically and viably be carried out in Singapore. They cited finalstage food processing and advanced bioengineering as examples.

“At the same time, this processing should increase the ability of companies to benefit from Singapore’s wide and strong Free Trade Agreement (FTA) network which would offset the probably higher cost base (including land cost) perspective in overseas markets,” PwC said.

The enhanced use of FTAs can go through direct exports or support companies that are processing in Singapore and requiring small and medium-sized enterprises’ (SMEs) inputs.

PwC said involving SMEs through an industry-wide FTA approach based on technology would go a long way to achieving this goal.

Pandemic relief Most of the proposals from the Big Four firms stem from one vital thing: to help relieve the negative impacts of the pandemic.

According to Panneer Selvam, partner and head of People Advisory Services – Mobility at EY, while the government has been supporting jobs and reskilling, there are limited direct reliefs for individuals. Existing reliefs range between $600 and $1,200, with 36

SINGAPORE BUSINESS REVIEW | MARCH 2021

additional payments available for parents and those over age 50.

“As the impact of COVID-19 may continue to be felt in the coming years, an additional rebate or one-off relief for the tax-paying population would be welcomed to help reduce the overall impact to individuals,” Selvam said.

Technological innovations and helping develop the workforce to better accommodate changes will be Singapore’s leverage against these turbulent times, Deloitte has advised.

“2020 could be seen as a year of reset—of how we envisage moving forward as a society and community. During this time of economic uncertainty, a lingering sense of job insecurity among workers is understandable.

COVID-19 has sharpened and accelerated the need for change in almost every facet of our lives.”

Cushion the economic impact of COVID-19 pandemic Enhance productivity and innovation Drive workforce transformation

KPMG • Re-imagine: technology infrastructure, including the 5G network • Re-plan: to keep up with the changing talent landscape • Re-create: to sow the seeds of a green-led recovery Deloitte • Extend the existing Jobs Growth Incentive while employment is muted • Technology and innovation remain key engines of development • Vaccine distribution to further boost confidence PwC • • • •

Introduce upskilling sabattical programmes Initiate digital coach programmes for SMEs Liberalise tax requirements for SMEs Strengthen food security

Core manufacturing has the capacity to support growth of the services industry and will attract whole ecosystems

THOUGHT LEADERSHIP ARTICLE

Digital-first approach crucial to customercentricity: AIA Singapore Technology, data, and analytics, have become keys to personalisation of online and offline customer experiences.

Melita Teo, Chief Customer and Digital Officer at AIA Singapore

T

he coronavirus pandemic has turned the world on its head; and every industry on the planet has to innovate and come up with new ways of doing its business. Officebased workplaces have transitioned urgently into work-from-home arrangements; the retail sector has leveraged off of the global e-commerce ecosystem to continue getting goods to customers; and banks have ramped up their own innovations to stay connected with their stakeholders.

In Singapore, maintaining the integrity of transactions as they rapidly take on digital forms has been a particular challenge.

Fortunately, insurance provider AIA has implemented a new solution that it says is giving greater confidence and security to all of its customers.

“Integrating our digital platforms with GovTech’s Sign with SingPass and Kofax’s SignDoc advances our ability to provide fast and even more convenient customer experiences without compromising their data security, which is essential in an increasingly digital world,” says Melita Teo, Chief Customer and Digital Officer at AIA Singapore.

Sign with SingPass advantage Available to all AIA Singapore customers since November 2020, Sign with SingPass was an initiative spearheaded by the Government Technology Association (GovTech) in Singapore. One of the key features has been its integration with the existing SingPass system, so that users’ identities can be automatically verified with minimal hassle.

Signatures made using Sign with SingPass are regarded as secured electronic signatures under Singapore’s Electronic Transactions

Act, which means customers can now sign legal documents virtually, without face to face meetings.

Previously, the majority of contracts – and almost all insurance contracts – needed to be signed in person to ensure validity in Singapore.

AIA is the first insurance provider to integrate Sign with SingPass with its distribution platform, which has helped to make customer experiences not only more convenient, but also with enhanced security as online transactions become the norm.

“As virtual interactions become the new norm, cybersecurity will form a core tenet of AIA’s ongoing digitalisation strategy,” Melita said. “Partnering with GovTech and automation software players such as Kofax is part of our long-term strategy to make the customer experience more seamless and secure.”

When integrated with Sign with SingPass, our distribution platform will: • Digitise the end-to-end signing process: Simplifying and expediting the signing of insurance contracts and to be completely paperless, by replacing wet-ink signing with e-signatures.

• Transform the customer experience: Better engaging insurance customers by enabling them to use the communications channel of their choice to e-sign on any device—anytime, anywhere.

• Reduce operational costs: Decrease the manual processing steps to issue a policy contract, and paper-related costs, such as routing and storage.

The full digital experience Sign with SingPass is just one of the comprehensive suite of tech-focused changes that AIA Singapore has rolled out in recent years, as part of its ongoing digital transformation. Melita says the aim is “to use Technology, Data, and Analytics to make AIA a simpler, faster, more connected organisation”.

“These changes are transforming the experiences of our people, and ultimately helping us to drive better customer outcomes.”

One of the most standout examples of these changes has been the ‘My AIA SG’

customer platform. More than a simple app, this is a dedicated digital platform, with secured 24/7 access for AIA policy holders across multiple devices and operating systems.

Users can make up to 28 different types of service-requests, making it the widest digital customer service coverage in the industry.

More than 50% of AIA policyholders are now utilising the ‘My AIA SG’ platform, which has helped to ensure some 90% of day-to-day service requests are submitted digitally, resulting in faster, and more effective resolutions that happen in real time at the policyholder’s convenience.

With the Claims EZ platform, AIA has also successfully transformed and digitalised the claims process from end-to-end. Built in partnership with AIDA Technologies, customers can submit their claims online, which are then auto-assessed by an Artificial Intelligence (AI) decision engine, and claims payout can be disbursed instantly and directly into the customers’ bank account by leveraging onto PayNow infrastructure. Today, 100% of AIA HealthShield claims are assessed by AI technology.

But it’s not just about the technology alone.

Melita says the digital enhancements across all parts of AIA Singapore have been backed up by an equally important cultural transformation among its team.

“We view tech as an enabler, not a replacement to human touch, so our digitalisation strategy is people-first and customer-led,” she says. “We’re doubly committed to making sure that every product, campaign, and initiative we launch is developed with our customers’ needs in mind, while ensuring that our employees are able to benefit from technology.”

All of this goes back to how AIA is redefining the role an insurer plays in society, moving from a payer to a true partner, with that continuing transformation fuelled by digitalisation.

CYBERSECURITY FORMS A CORE TENET OF AIA’S DIGITALISATION STRATEGY TO MAKE CUSTOMER EXPERIENCE MORE SEAMLESS AND SECURE SINGAPORE BUSINESS REVIEW | MARCH 2021

37

ANALYSIS 2: COMMERCIAL PROPERTY

Companies are gradually returning to their offices, but also reviewing their requirements

A mixed outlook for CBD office space

Investors will have to wait until the second half of 2021 for a recovery in the market for commercial property, including premium CBD office space, CBRE Research has found.

A

t the onset of the COVID-19 outbreak, safe distancing and circuit breaker measures led to telecommuting as the default working arrangement. This trend is expected to continue in 2021, with many firms announcing plans to allow workers to work from home till mid-2021. As companies gradually phase their return to offices, some occupiers are reviewing their specific locational preferences and ongoing working models.

Tech enabling a hybrid workforce With the acceleration of digitalisation, the workforce is evolving into two practices – office-based and remote working. Key sectors that belong to the latter are the information & communications, finance & insurance, and professional services.

According to MTI’s advance estimates, these three sectors were the only sectors that displayed growth collectively in Q4, 2020.

Incidentally, the technology and non-bank financial services firms 38

SINGAPORE BUSINESS REVIEW | MARCH 2021

were the top office demand drivers in 2020, and accounted for at least 50% of leasing volume.

Leasing demand in 2021 is expected to be led by these sectors as there is high demand for their services across the economy.

Cost efficiency was the top priority for firms in 2020. Across an array of industries, firms were either renewing or relocating, with a reduction in footprint. For the first time since 2015, island-wide net absorption was negative and tallied -0.56 mil sq. ft. in 2020. In 2021, the focus will be on portfolio agility as companies take into account of remote working in their daily working arrangements.

Based on the recent ‘The Future of Office Survey’, more firms have indicated a shift in attitude towards having remote working as an option for the workforce. However, companies still expect employees to gradually return to the office. The survey findings show that around 66% of survey respondents intend to allow

Across an array of industries, firms were either renewing or relocating in 2021, with an overall reduction in footprint

remote working for no more than one or two days per week. This is likely to steer towards a hybrid workforce in future. Nevertheless, the office still remains essential for team productivity and engagement amongst employees.

Investor flight to quality The office market is a two-tier market; occupiers are showing stronger preference for prime office buildings with tech-enabled specifications vis-à-vis the ageing office stock with older specifications. In 2020, most of the negative net absorption stemmed from the Grade B market, which tallied -0.79 mil sq. ft. Some occupiers downsized, while others decided to capitalise on the current economic downturn to take “flight to quality”.

Conversely, the Grade A (Core CBD) market registered 0.51 mil sq. ft. of positive net absorption in 2020. This was largely supported by the strong take-up in 79 Robinson Road – the sole Grade A comple-

ANALYSIS 2: COMMERCIAL PROPERTY LEASING DEMAND BY SECTOR IN 2020

Across an array of industries, firms were either renewing or relocating in 2021, with an overall reduction in footprint

Source: CBRE Research

tion in 2020.

The resilience in the Grade A office market was also reflected in its vacancy rate, which kept stable y-o-y at 3.9%. This tight vacancy limited the availability of prime space for occupiers with upcoming lease expiries. Nevertheless, opportunities lay within the pool of secondary space that is emerging from the cutback in large occupiers’ footprints. Given that some of these secondary spaces are located in quality developments, there has been some positive take-up of these spaces by opportunistic tenants.

Out with the old…

The composition of office stock is gradually changing. Some developers have recognised the need to spruce their ageing office portfolio and are leveraging on the Central Business District (CBD) Incentive Scheme to rejuvenate these older assets. Several office buildings such as AXA Tower and Fuji Xerox Towers are expected to commence redevelopment in 2021.

Instead, the next three years will welcome new developments with agile space solutions and digitally enabled specifications.

Over the next three years (2021 – 2023), total new supply is estimated at 3.40 mil sq. ft. This is equivalent to an annual average supply of 1.13 mil sq. ft., which is 32.2% lower than the historical 10-year annual average new supply. In 2021, there will be an introduction of 1.24 mil sq. ft. of new office stock. Of which, the only Grade A building that is slated to complete in 2021 is CapitaSpring. Overall, the construction

delays have augured well for the office market as more than half of this anticipated supply in 2021 have been pre-committed.

Healthy fundamentals Amid the challenging business climate, tenant retention was a key priority in 2020. Firms were downsizing and this impacted occupancy. To maintain occupancy, landlords with emerging vacancies in their portfolios began to adjust their rental expectations at a larger magnitude. This led to a full-year rental correction of 10.0% y-o-y in 2020. Notably, this rental decline was less prominent than the moderation witnessed during the Global Financial Crisis period.

To a certain extent, this correction was cushioned by the additional fiscal and job support measures provided by the government, which

include rental relief and property tax rebates. In addition, the Grade A (Core CBD) office market was underpinned by a relatively tight vacancy rate of 3.9% as at end 2020.

Looking ahead to H2 2021 is envisaged to be a year of two halves. While the first half of 2021 is expected to still be under some pressure, the latter half is likely to witness some improvement. The overall office market is poised to benefit from the gradual economic recovery in 2021, as well as the gains in employment. Arguably, the underlying strength of the office market is also attributed to the diversified occupier profile seen today.

Other than the traditional sectors of banks, legal and accounting firms which may be reviewing their occupier strategies, office demand will be supported by growing sectors such as the technology, financial services and professional services sectors. With continued demand for office space, coupled with the limited Grade A supply in the pipeline, this would support office rental growth in the second half of 2021. That said, it will not be an even, uniform recovery in rents across all office buildings.

The prime office buildings are expected to benefit first, as occupiers leverage on the current downturn to ride on the “flight to quality” strategy. However, this would lead to an increasing vacancy in the older office stock, and prompt landlords to be more flexible in incentives and negotiations.

PERCENTAGE OF WORKFORCE THAT CAN WORK REMOTELY

Source: Source: Asia Pacific The Future of Office survey, CBRE Research, January 2021.

SINGAPORE BUSINESS REVIEW | MARCH 2021

39

ANALYSIS 3: ACCOUNTING In addition, 93% of respondents agreed that a digital transformation strategy without a strong culture to support it is a significant threat to the value of the transformation strategy.

Most Singapore finance leaders agree that successful digital innovation should not focus solely on the technology deployed

Going digital: finance leaders still far off the pace A new study has found significant gaps in the digital readiness of finance teams across Singapore, as EY’s Ronald Wong explains.

A

study, Is digital culture the key to unlocking finance transformation?, by EY and ACCA in Singapore, found that despite the importance of a digital culture in the finance function, more than half of the finance leaders surveyed recognize that there is still a considerable gap between their current digital culture state and the desired one for driving digital innovation.

Finance leaders should therefore take a structured and balanced approach to bridge this gap and improve the digital culture in their finance function by driving change in the four elements that constitute culture.

The COVID-19 pandemic has changed how finance functions operate. While new technologies bring new opportunities, not all finance digital transformations succeed.

Many organizations do not fully recognize that digital success is not just about technology, which is merely an enabler. When it comes to adopting digital transformation, the organization’s digital culture — which encompasses the abovementioned elements of organizational structure; people; strategy, processes and policies; 40

SINGAPORE BUSINESS REVIEW | MARCH 2021

Digital culture, which encompasses elements of organizational structure; people; strategy, processes and policies; is the critical precursor to a successful digital transformation

and technology — is the critical precursor to a successful digital transformation. Seventy-eight percent of respondents in the ACCA-EY survey agreed that successful digital innovation should not focus solely on the technology deployed. <subhead> Why a strong digital culture is important Research by Gartner found that over 70% of finance transformation initiatives fail to deliver the expected benefits.1 A key factor is the leadership’s inability to foster a culture that supports the organization’s digital strategy and aligns that with the overall corporate strategy. Building and sustaining a culture is an enduring and continuous endeavor, and it takes time to shift an existing value system toward a new or improved one.

The ACCA-EY survey found that 94% of finance leaders agreed that having a strong digital culture with clear strategies is what sets successful digital transformations apart from failed ones. This reflects their awareness that a strong digital culture is instrumental in unlocking and protecting the value of innovation and transformation.

Addressing the challenges of fostering a digital culture While finance leaders in the ACCAEY survey agreed that culture plays an imperative role in encouraging innovation and driving digital transformation, having a strong digital culture within finance teams is currently not the norm.

Seventy-eight percent of the respondents agreed that the culture of their finance teams needs to change for them to continually engage in digital innovation and consistently seek process improvements through technology.

More than half of the respondents saw a digital culture gap between their finance teams and those of other organizations with very mature digital technologies and capabilities. The lack of a strong digital culture can be attributed to a resistance to change within finance teams that prefer the predictability of the status quo as well as a low risk appetite and fear of failure.

A full shift in culture will also require changes to mindsets, attitudes, values and behaviors. The survey affirms this, with more than 90% of respondents agreeing that all the elements of digital culture need to be considered when embarking on new digital initiatives. Among the four, people as well as strategy, processes and policies are viewed to be more important in enabling their success.

Respondents also cited the existence of too many competing priorities as the top barrier to building a strong digital culture, as shown in the following diagram. This impacts all elements of the culture as finance leaders struggle to divert the necessary resources, efforts and time to nurture the right culture holistically.

With competing priorities, technology investments tend to be focused on other functions that have a direct impact on growth and revenue.

Finance leaders should articulate how middle and back-end digitalization initiatives are needed to execute a coherent strategy.

ANALYSIS 3: ACCOUNTING With more frequent disruption from digital innovation, data proliferation, a volatile risk environment, increasing regulations, and growing stakeholder expectations, organizations will look to finance leaders — who have a unique vantage point over the whole business — to provide strategic advice and innovative solutions. This also offers finance leaders an opportunity to position themselves as a strategic advisor.

There may also be competing priorities within finance itself.

Occupied with their daily work, finance teams may not have the additional time, capacity and impetus to explore innovative digital solutions and take the necessary risks.

Overcoming barriers to a digital culture Overcoming the barriers to a digital culture requires multipronged, consistent and concerted efforts.

The most common initiative undertaken by the respondents is clear communication from the top management on the importance of innovation, including the definition of a digital vision, which will provide a common ambition and focus for efforts and investment decisions.

When communicating the digital transformation strategy to other stakeholders, finance leaders should help them to understand its significance and impact on them to secure their buy-in and commitment.

Other steps taken by finance leaders include conducting workshops and training sessions to raise awareness and enhance the digital skills of finance staff so that they can take on more proactive roles in the organization and contribute to key business decisions.

The lack of frameworks and metrics to assess the digital culture is a key barrier cited — and not comprehensively addressed — by the respondents. This is likely due to various challenges that stand in the way of producing relevant, credible and trusted culture reporting.

Building a strong digital culture The four elements of a digital culture: organizational structure; people; strategy, processes and policies; and

technology are not only individually important but also interdependent.

Finance leaders seeking to build a strong digital culture need to understand each element, assess current gaps in their organization and consider the following ways to strengthen each element. #1 Organizational structure How organizations are structured can enable or hinder collaboration, agility and innovation. To be adaptable, people across different functions need to be empowered in decision-making to quickly execute change. This starts with inclusive leadership, which delegates rather than controls, actively invites inputs from all organizational levels and changes accordingly. It is also important for business units to share data to provide a complete view of information for sound decisionmaking. #2 Anchor the finance function’s influence Finance leaders are ideally positioned to define a role for themselves and a finance function that goes beyond pure compliance and reporting of finance-related data. In many cases, the CFO acts as a superconnector, drawing together the strands of activities across the entity. Financial and other data are key inputs to many other processes that require business decisions, such as procurement, supply chain, operations or risk management. Finance leaders should take a holistic view of transformation beyond finance by helping to drive digital technologies in other business processes. They should also demonstrate their value as a business partner and in turn, secure the resources and buy-in to drive a stronger digital finance function. #3 Simplify structure for agility To promote agility, finance leaders can consider flattening the finance function’s hierarchy to facilitate more direct and faster feedback from employees on ways to innovate and enhance finance processes. A flatter structure and a collaborative mindset will help to foster a stronger digital culture. #4 People Finance leaders need to recruit, harness and retain talent with the skills and motivation to complement

The finance function of the future is expected to evolve into a data-driven decision centre

technological innovations as well as the agility to embrace rapid change, evolving roles and new approaches.

Design a future-fit operating model The finance function of the future is expected to evolve into a data-driven decision center. Finance professionals should focus less on generating reports and information, and more on using the available data to help support decision-making. The ideal future finance operating model should be smarter, better aligned to the business and more forward-looking and resilient. To realize its promise, finance leaders will need to rethink their talent management strategy and establish the right people management approach.

The ability to leverage data as a strategic asset is key to driving better insights for the organization.

Data gurus, such as statisticians, data scientists and even behavioral scientists, will be invaluable in helping the finance function of the future to turn data into fresh perspectives and strategic insights. So is talent steeped in finance knowledge and literate in technologies, such as blockchain, artificial intelligence (AI) and predictive analytics, with prior experience in using or implementing them. To be effective business partners, finance talent must have the communication skills to convey pertinent insights to other internal stakeholders and help address strategic challenges faced by the business.

Barriers to fostering a conducive digital culture within the finance team

Source: Ernst & Young

SINGAPORE BUSINESS REVIEW | MARCH 2021

41

LEGAL INDUSTRY SURVEY

Many of Singapore’s largest law practices had to shed staff in 2020, according to SBR’s Law Industry Rankings

Technology shift to transform Singapore legal industry This is amidst the developments in the practice over the years.

I

t hasn’t just been the retail and tourism industries that have been impacted by the pandemic and resultant economic slowdown around the world. Last year’s upheaval also had a heavy impact on Singapore’s legal sector. Only six of the 22 largest law firms in Singapore saw an increase in their lawyer count amidst the challenging environment. The total number of lawyers in Singapore Business Review’s annual Legal Industry Survey of the 22 largest law firms fell to 2,861, down 147 from the 3,008 recorded in 2019.

Allen & Gledhill retained its top spot as the biggest law firm in the market, and was one of the six who were able to increase headcount during 2020. It added a further 13 lawyers to its payroll in 2020, finishing the year with 418 on staff.

They were followed by Rajah & Tann Singapore LLP in second place, with a lawyer count of 349, a decrease from last year’s 376.

Wong Partnership LLP (3rd in the 2020 rankings) and Drew & Napier LLC (fourth) also recorded an increase in their lawyer counts last year, from 324 to 330, and 269 to 290, respectively.

Whilst, Dentons Rodyk & Davidson LLP (fifth) finished the year with 206 legal professionals on staff, down from last year’s 209.

While the top five biggest law firms did

42

SINGAPORE BUSINESS REVIEW | MARCH 2021

Only six of the largest 22 law firms in Singapore saw an increase in the number of lawyers on staff

not change any of their positions in the 2020 rankings, there was movement across the next tier, amongst firms with 80 to 125 lawyers on staff. Of these, Shook Lin & Bok LLP was one the rare businesses to grow during the challenges of 2020. It saw a net gain of three legal professionals over the course of the year, growing to 125 and maintaining its seventh position in the rankings.

Lee & Lee, which had ranked eighth in 2019, shed some 14% of its headcount to drop to 10th in the latest rankings.

Adopting technology in legal practice With the Singapore legal industry not exempt from the impacts and changes brought about by the pandemic, the need to rethink the typical working environment within law firms became paramount in 2020. Just as was the case in many industries, the biggest firms have turned to technology to adapt and survive in their business.

The Government and Regulators have also been helping to get the profession moving.

Singapore’s Second Minister for Law Edwin Tong launched the Legal Industry Technology and Innovation Roadmap (TIR) initiative during the TechLaw.Fest in October last year. This

set out plans by the Ministry of Law to promote innovation, technology adoption, and development in Singapore’s legal industry over the next decade.

The plans include working with industry partners and the Infocomm Media Development Authority to help law firms assess their digital readiness, as well as exploring the possibility of a cloud-based platform for legal technology.

“Amidst the COVID-19 pandemic, it is a good example of how technology and innovation can help us pull through and emerge stronger,” Tong said. “The TIR seeks to encourage the legal industry to step up efforts in technology adoption and innovation, so that we can better position ourselves to seize more opportunities in the new normal.”

“At the heart of all this is a key issue of access to justice. The profession now has a deeper understanding of the implications and opportunities of digital transformation and we hope this week has provided a new impetus for changes in mindsets on what legal services are all about,” Singapore Academy of Law CEO Serene Wee added.

Amidst such talks, local firms have been adapting their own technology strategies, and also evolving their practices to new tech-focused segments of the law.

Rajah & Tann launched its Rajah & Tann Technology (R&T Tech) practice in 2018, offering multidisciplinary tech-enabled legal solutions including data breach readiness and response, cybersecurity, electronic discovery, and a virtual law academy.

In the same year, R&T Tech also acquired artificial intelligence-driven firm LegalComet, which offers advisory services such as e-discovery, forensic technology, and data governance.

The Future Law Innovation Programme (FLIP) was also launched in 2018 to support the adoption of technology in the legal practice, support legal technology startups, and build the legal technology ecosystem in Singapore. Firms such as Dentons Rodyk & Davidson and Rajah & Tann signed up under FLIP upon its establishment. Whilst the legal industry has embraced and everything after.

LEGAL INDUSTRY SURVEY 2020 Rankings

LAW FIRM

2019 Rankings

Foreign/Local

2019 Legal Professionals

2020 Legal Professionals

Managing Partner

1

Allen & Gledhill

1

LOCAL

405

418

LEE KIM SHIN JERRY KOH

2

Rajah & Tann Singapore LLP

2

LOCAL

376

349

PATRICK ANG

3

WongPartnership LLP

3

LOCAL

324

330

NG WAI KING

4

Drew & Napier LLC

4

LOCAL

269

290

CAVINDER BULL, SC - CEO

5

Dentons Rodyk & Davidson LLP

5

FOREIGN

209

206

PHILIP JEYARETNAM, SC

6

Baker McKenzie Wong & Leow

6

FOREIGN

162

155

ANDREW MARTIN

7

Shook Lin & Bok LLP

10

LOCAL

122

125

SARJIT SINGH GILL, SC

8

Clifford Chance

11

FOREIGN

86

105

KAI-NIKLAS SCHNEIDER

9

RHTLaw Taylor Wessing LLP

7

LOCAL

105

92

AZMAN JAAFAR

10

Lee & Lee

8

LOCAL

115*

90

KWA KIM LI

11

Withers KhattarWong

9

LOCAL

94

88

DEBORAH BARKER, SC

12

Harry Elias Partnership

13

LOCAL

105

80

PHILIP FONG

13

TSMP Law Corporation

14

LOCAL

70

70

THIO SHEN YI, SC STEFANIE YUEN THIO

14

Norton Rose (Asia) LLP

16

FOREIGN

61

53

YU-EN ONG

15

Bird & Bird ATMD LLP

19

LOCAL

41

50

LORRAINE ANNE TAY SANDRA SEAH

16

Herbert Smith Freehills

19

FOREIGN

53*

49

ALASTAIR HENDERSON

17

Linklaters

12

FOREGN

87

43

NATHALIE HOBBS (ASIA MANAGING PARTNER)

18

CNPLaw LLP

23

LOCAL

41

41

LISA THENG

19

Tan Peng Chin LLC

21.5

LOCAL

40

40

WONG LIANG KOK LIM JO SEE

20

Tan Kok Quan Partnership

20

LOCAL

41

39

MARINA CHIN EDDEE NG

21

Latham & Watkins LLP

24

FOREIGN

51

38

MICHAEL W. STURROCK

22

HFW

21.5

FOREIGN

48

34

MERT HIFZI

23

Morgan Lewis Stamford LLC

17

LOCAL

59*

32

NG JOO KHIN

24

Kelvin Chia Partnership

25

LOCAL

26*

26

KELVIN CHIA

25

Allen and Overy

15

FOREIGN

18

18

CHRISTOPHER MOORE

TOTAL

3,008

SINGAPORE BUSINESS REVIEW | MARCH 2021

43

LEGAL LUMINARIES

Young at Law: The most influential lawyers aged under 40 in 2021 Twenty-one new lawyers from 15 law firms have been chosen as some of the most promising lawyers in the industry for the seventh year of Singapore Business Review’s Legal Luminaries aged 40 and under in 2021. These lawyers have advised clients in matters such as mergers and acquisitions (M&A), criminal litigation, international arbitration and dispute resolution, with expertise ranging from banking and finance, to investment markets, and white collar crime.

The lawyers from this list are arranged from youngest to oldest.

1

Victor Looi, 29, Atlas Asia Law Corporation Victor is a senior associate, experienced in advising numerous clients on Singapore law matters in mergers and acquisitions, corporate restructuring and reorganisation, data protection, and payment services. He graduated from Singapore Management University with high distinctions in Bachelor of Laws and Bachelor of Business Management (Finance). A firm believer in public service, he also volunteers at a pro bono legal clinic.

2

Nadia Ahmad Samdin, 30, TSMP Law Corporation Nadia is part of TSMP’s corporate transactional team with a specialisation in M&A, along with other areas of practice such as equity capital markets, banking and finance, and employment law. She has worked with Mainboard-listed public firms, startups, and foreign entities. Outside of law, she is currently an elected Member of Parliament for Ang Mo Kio GRC and has served for the National Youth Council and the Singapore Council of Women Organisations, and as a panel adviser to the Singapore Youth Court.

3

Niklas Wong, 31, TSMP Law Corporation One of TSMP’s youngest male associate directors, Niklas has worked on complex litigation and arbitration matters. He 44

SINGAPORE BUSINESS REVIEW | MARCH 2021

has acted for the plaintiffs in one of the country’s largest trust disputes and regularly acts in probono matters. He has taught an elective course on shareholder deals and litigation at the Singapore Management University.

4

Sinyee Ong, 31, Sharpe & Jagger Sinyee is a dispute resolution practitioner focusing on the construction, hospitality, insurance, and oil and gas sectors. She has advised clients on political risk from the Hong Kong riots, and is acting on behalf of hospitality and real estate firms seeking insurance recoveries from the financial losses triggered by the COVID-19 pandemic. She is a CFA charter holder and is qualified in four jurisdictions, namely Singapore, England & Wales, New York, and Western Australia.

5 Farrah Isaac, 32, Harry Elias Partnership Farrah is a senior associate in the firm where she specialises in civil and commercial litigation and dispute resolution. She assisted in a successful defense of a client in a multi-million dollar High Court trial and also obtained the largest ever party-and-party costs award in Singapore’s legal history. Farrah graduated from the University of Bristol with Upper Second Class Honours.

6 Geraint Kang, 32, Tan Kok Quan Partnership A senior associate, Geraint has handled matters related to banking law, insolvency and restructuring, and building and commercial law. Some of his most recent cases include acting for the provisional liquidators of SuperPark Asia Group against the firm’s majority shareholder. He graduated from the University of Bristol in 2012.

7

Keith Hsu, 32, Emerald Law A managing partner at Emerald Law, Keith acquired the practice when it was still known

as B Rao & K S Rajah.

He was lead counsel in various High Court cases and is also a former member of the Law Society’s Anti-Money Laundering Committee.

His expertise lies in fintech, particularly in handling the sale and purchase of shares of private companies.

8 Hazel Ho, 33, CNPLaw Hazel is a senior associate in the firm’s corporate advisory team. Her main areas of practice include M&A, joint ventures, private equity, capital markets, and general corporate advisory. In her first two years at CNPLaw, she helped the firm establish working collaborations with various professional organisations which continue to generate business for the firm. She holds a Master of Laws (Distinction) from BPP Law in London.

9 Gerard Quek, 33, Peter Doraisamy Gerad is a partner at Peter Doraisamy and was included in the top 30% cohort of the University of Tasmania.

His expertise lies in fraud and asset recovery, commercial disputes, financial services law and regulation, and shipping litigation. Gerard regularly takes on matters on a pro bono basis with the support of his firm, and was recently shortlisted as a finalist in the Asian Legal Business Southeast Asia Law Awards 2020 for the Young Lawyer of the Year category.

10 Kevin Tan, 34, Rajah & Tann Singapore Kevin specialises in commercial litigation and international arbitration and was formerly a Justices’ Law Clerk and Assistant Registrar of the Supreme Court. Some of his notable cases include acting for the Philippines in a UNCITRAL Arbitration relating to a water concession agreement, and for a Malaysian firm and a Marshall Islands-registered company in an O&G dispute before the Singapore International Commercial Court. The Ministry of Law has recently named him as

LEGAL LUMINARIES an assessor under the COVID-19 (Temporary Measures) Act. 11 Loh Chun Kiat, 34, Rajah & Tann Singapore Chun Kiat is a corporate/ mergers and acquisitions lawyer with experience in public and private M&As. He has represented clients on both buy-side and sell-side transactions, investors and startups related to venture capital and other emerging company transactions. He has been named as a Notable Practitioner in Corporate/Mergers and Acquisitions in Asialaw Leading Lawyers 2020 and 2021 edition.

12 Tania Chin, 35, Withers KhattarWong Tania is a criminal litigation partner with expertise in blue and white collar crimes. She is a member of the Criminal Justice Chapter of the Professional Affairs Committee, Singapore Academy of Law, which advances training and standards of the Criminal Bar of Singapore. She was the only Singaporean lawyer to be recognised as a ‘Future Star’ in white collar crime by Benchmark Litigation Asia Pacific 2020.

13 Kennedy Chen, 35,

Harry Elias Partnership Kennedy has several specialties under his belt from M&A, corporate structuring and restructuring, to finance, equity/ debt capital markets, bespoke deals, and commercial/business advisory. He has authored the Singapore chapter for the PRC Belt Road Initiative Guidebook published by Eversheds Sutherland US. He is also a committee member under the Panel of Assessors for COVID-19 Temporary Relief 14 Xiao Hui Ting, 35, Baker McKenzie Wong & Leow Xiao Hui is a local principal who advises on all aspects of corporate advisory and cross-border transactional work, including M&A (private), joint ventures, commercial contracts, and corporate reorganisations. She is a second upper

graduate from National University of Singapore with an LL. B. (Hons) in 2008. She also acts for privately held corporations and private equity firms across a broad spectrum of industries.

15 Edwin Chia, 35, CNPLaw Edwin is a partner in the firm’s dispute resolution and private clients practice groups.

His practice areas include civil and commercial litigation, disciplinary proceedings, contentious probate, shareholders’ dispute, and employment matters. He graduated from the National University of Singapore in 2010.

16

Richard Allen, 36, Baker McKenzie Wong & Leow Richard is a local principal in dispute resolution and international arbitration groups. His practice covers commercial arbitration, international investment arbitration, commercial litigation, as well as public and private international laws. He represents clients across industries, with a particular focus on oil and gas, power, commodities and aviation. He was also involved in several high-profile cases before the UK Supreme Court.

17 Cheryl Tan, 36, Rajah & Tann Singapore LLP Cheryl specialises in banking and finance with focus on acquisition financing and venture debt financing transactions. Dual-qualified in Singapore and New York, she has recently expanded her practice to cover the issuance of insurance-linked securities. She graduated from the National University of Singapore in 2007, was admitted as an Advocate and Solicitor of the Supreme Court of Singapore in 2008 and as an Attorney at Law in the State of New York in 2012.

18 Gerald Goh, 36, GTLaw Gerald is a partner in the firm’s corporate and commercial practice group and has practiced law for 10 years. He advises companies, private equity and venture capital funds and other financial organisations on cross-border

acquisitions, disposals, joint ventures and mergers. He has handled deals with several well-known companies and is also the youngest partner in the firm.

19 Suzanne Meiklejohn, 37, HFW Suzanne is a senior associate and has trained in its London office prior to relocating to Singapore. Her expertise extends to high-value shipbuilding and offshore disputes, largely in Singapore International Arbitration Centre arbitrations. Suzanne has been commended for her excellence in legal skill, combined with her resilient, outcome-oriented approach and her understanding of clients’ businesses.

20 Shaun Lee, 37, Bird & Bird Shaun acts in complex transnational commercial disputes across the TMT and financial sectors, as well as in the infrastructure, energy & utilities space. He has successfully represented clients in SIAC, London Court of International Arbitration (LCIA) and International Criminal Court (ICC) international arbitration proceedings; mediation proceedings; and in proceedings before the Singapore courts and the Singapore International Commercial Court. He has also written extensively on international arbitration, Singapore employment and data privacy law.

21

Eunice Yao, 37, Dentons Rodyk & Davidson Eunice is a partner in the firm’s corporate practice, with main areas of practice in capital markets, mergers and acquisitions, , and fintech.

She has advised in initial public offerings of companies providing advice to issue managers, and in many companies listed on the Singapore Exchange Securities Trading Limited in their corporate actions, including equity and debt fund raising.

SINGAPORE BUSINESS REVIEW | MARCH 2021

45

WEBINAR: A LOOK AT THE MODERN SUPPLY CHAIN “We are the first company to do drone deliveries to shops anchored outside Singapore,” Reddy said.

“We are solving the maritime lastmile delivery problem.

“Every year, 2.5 million trips are made using small boats and helicopters to deliver common items to ships that are anchored away from the shore, and offshore platforms. They are quite expensive to deliver these items, it’s quite time consuming, and (the trips) have an enormous carbon footprint.”

Why digital supply chains have become vital considerations Supply chain digitalisation and modernisation were the key focus areas in the From Turbulence to Triumph webinar.

I

don’t think there is any boardroom in the world not discussing supply chain resilience (right now).” So opined Gerry Mattios, expert partner with Bain & Company, in his opening address to the From Turbulence to Triumph: A Look at the Modern Supply Chain webinar, hosted by Singapore Business Review in partnership with SAP on 4 August 2020.

It is not just the COVID-19 pandemic demanding this new focus of business leaders, though Mattios says that has certainly caught companies by surprise and accelerated the trend. Technology changes, global trade wars, and e-commerce have also each played a role and kept the supply chain “top of mind”.

Mattios broke down the reactions of many businesses, from the immediate actions of the “Act Now” phase, to the “Plan Now” phase to a retooling of supply chains for the “New Normal” of the postCOVID-19 business.

His most-pro-active clients are using tools such as predictive analytics to ensure supply chains can analyse risks and can also react to market changes.

46

SINGAPORE BUSINESS REVIEW | MARCH 2021

There is a rise in multiple systems and additional pressure on new technologies and architectures

Drones to the rescue One supply chain innovation now impacting the marine and shipping industries in particular is the use of unmanned aerial vehicles, or drones, to complete last-mile deliveries with greater efficiency, safety, and speed.

Yeshwanth Reddy, founder of the Singapore-based startup F-drones, is playing a key role in this trend.

His presentation focused on the expanding use of these devices in Singapore’s marine industry.

While currently, regulations limit the payload that drones can deliver over Singapore waters to 5kg only, Reddy is confident a significant expansion is on the cards – his aviation-grade drones can carry loads of up to 100kg (for trips of up to 100km).

But even despite these restrictions, Reddy is finding plenty of demand for drone-delivery services to ships anchored off shore in Singapore.

Some of the more curious items to have taken the trip across the water include a Playstation console (for a crew member’s birthday) as well as undisclosed amounts of cash and currency.

Customers leading the way Meanwhile, Sreekumar Sivaramakrishnan, senior director for the Transportation and Logistics Industries with SAP Southeast Asia, took a customercentric perspective during his presentation at the From Turbulence to Triumph webinar.

He noted that “doorstep deliveries” have become a key customer demand across both consumer and business-to-business supply chains. So-called touchless supply chains have also surged in demand with the current pandemic environment.

“The concept of ‘touchless’ has existed for a few years; but the current pandemic has accelerated the need for each one of you (supply chain professionals) to think outside the box,” he said. “It has become the necessity, rather than the priority.”

“The bottom line is the faster you automate the interaction points between you and your end customer in a very safe environment, only then will you stay afloat in this highly customercentric environment.”

Technology and software solutions can be the big difference here, and Sivaramakrishnan says the right tools can help organisations to “predict”, “automate”, and “analyse” their supply chain performance.

With the machine learnings and artificial intelligence of today, businesses can leverage technology for more accurate predictions, closer analysis, and more efficient supply chains, he said.

WEBINAR: MANAGING MULTIPLE DATABASES WITH EFFICIENCY

How to address challenges in database management An audience of senior IT professionals took part in the exclusive webinar, supported by Quest Software.

B

usinesses are continuously changing to remain competitive.

As more firms transition to digital platforms, database management is set to become a key differentiator for organisations, according to speakers at Much ado about data: Managing multiple databases with better efficiency webinar. This was hosted by Singapore Business Review, in partnership with Quest Software on 13 August 2020.

A number of companies are focusing now more than ever on getting their technology better. Whilst vast amounts of data are now available to every business, capturing, managing, and analysing all of that information can be a significant challenge.

To level up their database management performances, senior leaders from the information technology, and communications professions participated in the webinar, and heard from both Quest Software’s Principal Technologist, Hollis Valencia and NCS’ Director, Business Application Services, Srirengan Kumar on the evolving challenges of database management today.

Singapore Business Review’s Chief Editor and Publisher Tim Charlton moderated the event.

There is a rise in multiple systems and additional pressure on new technologies and architectures

Accelerating the digital transformation process The pandemic is said to have sped up the digitisation process for multiple companies in different industries. It has affected day-to-day work both within organizations up to end-customers, making services more accessible through the internet.

“Because of this, there is a rise in multiple systems and additional pressure on new technologies and architectures we are practising,” according to Kumar.

As businesses transform to use multiple databases, Kumar highlights the need to understand the changes happening in digitalization and business transformation, as well as the key issues needed to be addressed. These would include managing multiple systems and how can organisations streamline their way in managing these.

Kumar said that companies need to introduce efficiency in their operations. “We can’t continuously increase manpower which will increase cost without the necessary resources.

We need to move towards efficient operations,” he added.

Companies need to be proactive in resolving database problems despite their complicated architecture, as well

as addressing the overall governance issues for faster turnaround.

“One of the key areas that we need to look at is data governance before you even start in data management.

These are the ones that set the verification back to the base line and make sure that we are adhering to compliances,” Kumar said.

“We need to have policies in place and how efficiently are we going to manage the multiple databases using the policies and procedures that we have and by incorporating tools as part of our work.” These tools can also be used to ensure that the data quality would adhere to established metrics based on the right metadata management processes in addition to proper data standardisation.

Managing multiple databases in a hybrid environment For companies to gain complete visibility on the health and performance of its database environment, they would need the right tools in managing their multi-platform databases. Valencia notes that Quest Software’s Foglight is one of these tools which can help companies identify inefficiencies and guide them to deliver a stepby-step action plan for maximizing database performance.

Foglight for multi-platform databases is said to provide a single pane of glass globalview of all database platforms, along with performance indicators such as workloads, alarms, system utilizations. The software diagnoses performance issues using multidimensional analysis and provides alerts to identify the root cause of problems. “It allows you to drill down on the underlying component to see what objects and factors are contributing to the overall workload,” said Valencia.

Quest’s database management solution provides companies with tools that simplify complexity and reduce costs and risks. “Foglight for databases will help your team to proactively monitor and diagnose performance issues in a heterogeneous multi-database platform,” says Valencia.

SINGAPORE BUSINESS REVIEW | MARCH 2021

47

WEBINAR: ACCELERATING DIGITAL INNOVATION AND RESILIENCE

Developing digital innovations in the ‘new normal’ Workers should be free to move in tandem with the technology shift.

T

he spread of COVID-19 is fast-tracking the digital transformation of businesses for them to reach their consumers.

Firms from different industries in the region are now adapting and innovating amidst the crisis, as the world transitions to a ‘new normal’.

Companies are also looking to develop new strategies and alternatives in order to thrive despite the challenging business environment.

Further, the COVID-19 pandemic has seen an influx of businesses undergoing digital transformations to cope with the” new normal,” as they start to open new and exciting opportunities to support their growth.

In Accelerating Digital Innovation and Resilience during the New Normal and Beyond, a webinar moderated by Singapore Business Review managing editor Paul Howell and attended by over 80 participants, key speakers discussed how digital innovations fare out for businesses amidst the COVID-19 pandemic.

New software solutions in a fastchanging world Whilst the idea of digital innovation is not new, the search for new solutions is accelerating so fast than one can ever imagine. For OutSystems

48

SINGAPORE BUSINESS REVIEW | MARCH 2021

Businesses need to ensure that their built solutions should integrate with their systems and connect to wider ecosystems going into the new normal

Singapore country manager Leonard Tan, we need to ensure that new solutions are built fast, built right, and are scaled for the future.

Ensuring that platforms are built fast is realizing that a lot of time can be shaved down from end to end.

Organisations should ask if they have the proper skillset, people, and technology to rule things out quickly.

Meanwhile, building solutions right means laying a foundation on organisations’ enterprise landscape. These solutions need to have the ability to cater to security, compliance, and even governance “Building it right doesn’t mean that you need to incur more cost, but at certain times you are actually saving in fact because of the sheer act of being able to change and revolve,” Leonard said.

“Businesses need to ensure that their built solutions should integrate with their systems and connect to wider ecosystems going into the new normal “We have seen disruptions, but it’s all about the change element that helps to spike the market to where it is today,” Leonard said.

He also noted that in developing technologies, organisations should ensure the right processes,

structures, and ecosystems to support, including allowing people to move with the technology shift.

“We expect technology to change everything in the organisation, but people are actually the one that drive the technology,” Leonard added. “It requires people to start being edge on in the way that technologies are being defined.”

Applying concepts from the previous talk, OutSystems senior solution architect Willie Tan has also created an application through a live demonstration of OutSystems platform. He highlighted creating specific functionalities that fit to different platforms and technologies.

Empowering traditional businesses through digitalisation Crown Group founder and chief executive officer Keith Tan shared the innovation of Ella, Crown Coffee’s first robotic barista, in his attempt to reinvent the traditional model of businesses.

Tan also identified four pain points he noticed in the industry when his startup Crown Coffee grew and opened about four new locations in a short amount of time.

These includes rent, labor shortage, challenge and cost of training, as well as consistency.

“You need to have a very grounded approach as to how you’re using the technology to solve your pain point. Sometimes, that requires a rethinking of the business strategy.

It needs to be backed up by your solid business model,” Keith said.

Leveraging on robotics, artificial intelligence and data analytics, Keith then started Crown Digital to digitalise and empower traditional businesses. He mentioned that the creation of Ella solved the industry’s pain point of manpower. He also noted that whilst robots have been in factories for a long time, such innovations have not been evident in retail.

When asked about how robotics and artificial intelligence will affect the labour force, Keith said technologies should be embraced for doing mundane tasks and that workforce should be rescaled to hire more people.

ARE YOU ONE OF

MALAYSIA'S

LEADING COMPANIES IN TECHNOLOGICAL INNOVATION?

NOMINATE NOW! DEADLINE FOR SUBMISSION OF ENTRIES:

19 MARCH 2021

FOR DETAILS, CONTACT:

JULIE ANNE NUNEZ

+65 3158 1386 EXT 221 JULIE@CHARLTONMEDIAMAIL.COM SINGAPORE BUSINESS REVIEW | MARCH 2021

49

Best Attraction Experience - Singapore Tourism Awards 2019

Certificate of Excellence Hall of Fame (2015 - 2019) - TripAdvisor

World’s largest glass greenhouse - Flower Dome - Guinness World Records, 2015

Over 1 million of the world’s natural wonders, not too far from home Showcasing over 1 million horticultural wonders across thousands of fascinating species from every continent except Antarctica, Gardens by the Bay brings you a world of experiences to discover. Come explore the very best of horticulture, architecture and sustainability, where wonder blooms. Inspiring over 50 million visitors so far, now’s your chance to see Singapore’s #1* attraction, without having to go too far. *As ranked by TripAdvisor, Feb 2021.

www.gardensbythebay.com.sg 1850Marina Gardens Drive, Singapore 018953 SINGAPORE BUSINESS REVIEW | MARCH 2021