Any business that is not digitally-enabled will soon find themselves outpaced not just in terms of customer attraction and retention but in becoming an employer that the millennials would want to work for, EY's Liew Nam Soon says in an exclusive interview with finews.asia.
Liew Nam Soon was recently appointed by EY as its ASEAN Regional Managing Partner, overseeing 14 geographic markets and serving as a member in its Asia-Pacific Area Operating Executive, with accountability for strategy execution. finews.asia sat down with him to better understand his priorities and strategy for the region in view of the latest trends impacting the industry.
What do you see are the key trends that will have a long-term impact on clients, end consumers and employees at EY?
ASEAN as a region remains diverse and unique with a dynamic population of millennials who are fast embracing all things digital and mobile. While traditional banks are still undergoing their own digital transformation journey to leverage technology to deliver financial services in a seamless manner, big technology companies have rapidly gained the ability and speed to independently provide both financial and non-financial services to customers.
This unprecedented move not only addresses the financial inclusion gap, but it also levels the playing field for digitally enabled businesses big and small, to target the same customer segments.
«Big Tech is not just technology solution providers but rather digital innovators»
It is thus time to look beyond just fintech innovation and pay attention to «Big Tech»* and «Techfin»** as part of digital inclusion, which is the key engine powering the ASEAN economy. Any business that is not digitally-enabled will soon find themselves outpaced not just in terms of customer attraction and retention but in becoming an employer that the millennials would want to work for.
How do you define Big Tech and its role in the ASEAN economy?
Big Tech is not just technology solution providers but rather digital innovators. They have continually transformed by adopting new technologies and refined their original customer's propositions to become faster, cheaper, and more frictionless and convenient.
Their rise has influenced consumer perceptions and won confidence, even for products and services that they may not initially be experienced in. Big Tech has a unique advantage given the scale of their platforms and their large customer database, where any complimentary services that are developed on their platforms would have an extensive and instant reach. Big Tech will thus set the wheels in motion to build a truly digitally inclusive ASEAN.
How should ASEAN businesses manage this concept of «coopetition» in the digital economy from a risk and returns perspective?
Almost every other industry is now ripe for convergence and disruption as new and emerging technologies continue to rewrite business models and how business value chains inter-relate to one another.
«The most suitable partner may not be the biggest technology player»
Meanwhile, businesses are also recognizing that no single organization has all the answers. Thus, I believe that collective wisdom through partnerships and alliances could be the key to seize the upsides of disruption.
The most suitable partner may not be the biggest technology player, and the greatest strategic opportunities may not require the latest technology. Growth opportunities will still need to be assessed based on business fundamentals. We often work with clients to answer these questions: What is the market size, potential profit pools and can it be strategically monetized, or in short, what is the addressable market? Why was this a previously unserved market? Are there new partnership models that would make it profitable to enter this market as a consortium?
«Regulators are aware that effective governance in the digital age must be enabled by technology»
When the opportunity has been identified, the next step is to ascertain the required technological capabilities, funding needs, operational expertise, navigate regulations and target customers to help in the selection of partners. As decision making is shared in a partnership, agreeing on the objectives, determining the terms and deciding on the model, which could range from joint ventures to alliances to consortia, are critical for a successful relationship among all parties.
Beyond getting started on the right foot, sustaining partnerships will require continual recalibration and renegotiations to keep pace as ecosystems continue to evolve. As disruptive technologies continue to transform ecosystems, new issues will emerge, and these may need to be cohesively tackled as a community.
Is there a role for regulators in balancing technological adoption with customer protection and market stability?
Regulators are aware that effective governance in the digital age must be enabled by technology. That is why governments are also partnering with technology companies to explore using machine learning to enhance the surveillance of market activity and verify the reports submitted by firms.
«Fostering a spirit of collaboration among businesses and governments has never been more critical»
Beyond playing a supervisory role, regulators are embracing their unique position to digitalize the national infrastructure such as digitizing citizen and business records, which will be invaluable data assets for businesses to ride on. Regulators are also playing the role of a facilitator to encourage collaborative efforts such as establishing regulatory «sandboxes» to test new, technology-led services in safe environments by limiting the impact to markets or consumers.
Fostering a spirit of collaboration among businesses, governments, and social sectors has never been more critical in developing scalable solutions that not just benefit individual organizations, but entire industries and economies as well.
- *Big Tech refers to the major technology companies with a large influence.
- **Techfin refers to technology companies who already have their own platforms and user base and are now offering financial services.
