Having battled the global pandemic for more than 6 months and foreseeing its lasting impact in the times to come, it is important to ask how prepared we are for the life after COVID–19. What are some of the valuable lessons that we have learnt in the past few months that we must take with us as we venture into the ‘new normal’?
In an attempt to discover and delve into the answers to these questions, OpenGov Asia hosted an OpenGovLive! Virtual breakfast insight with financial industry executives based in Indonesia.
The timely and thought-provoking issues saw a 100% attendance and high engagement rate from the audience for the session.
Balancing digital transformation along with managing fraud and risk is a major challenge for banks
Mohit Sagar, Group Managing Director and Editor-in-Chief, OpenGov Asia set the tone for the discussion by pointing out that the new, transformed workspace is no longer a physical place that employees go to but a cluster of virtual work tools that lets employees stay productive anytime and anywhere.
This free and flexible style of working has posed a major challenge for the financial sector industry. They are under a lot of pressure to balance their digital transformation efforts with the increasingly stringent regulatory guidelines alongside managing stakeholder expectations.
Apart from being resilient, banks have to constantly ensure that they are compliant and not flouting any regulations to ensure their presence amongst other contemporaries.
Operational resilience, which was earlier a seldom-discussed topic in the boardrooms, has been elevated on the priority list of CIO’s.
Mohit also highlighted the fact that mere compliance is not enough to ensure survival in the post-COVID-19 world. Constantly pushing the envelope by innovating and thinking outside the box is more important than ever.
He left the audience with advice that to effectively manage these distinct aspects of their business, it would be expedient to seek help and support of partners who specialise in it and who can help them prioritise right in the new uncertain normal.
How SAS can help and support financial institutions in the post COVID era
After Mohit’s challenging opening, Anggaraini Rahayu, Director-FSI, SAS Indonesia, shared her insights on the topic.
Anggaraini began by explaining how SAS can support, help respond to sudden changes and mitigate risk for the financial institutions as they recover in the post COVID–era.
She shared that SAS is doing this by identifying the volatility in macroeconomic factors that are key drivers of change, building up data and analytics capabilities along the journey to recovery and getting ahead of the innovation curve and applying analytics for future strategies.
Anggaraini elaborated on the various trends and opportunities in the FSI that have emerged beyond the pandemic. They are enhanced focus on digital transformation, better integration of financial services to the monetary policies, the robustness of asset and liability management, heightened security risks and surge in contactless payments.
She also talked about the way SAS operates in the financial industry space by enabling effective operations and working with innovative solutions that are driving amazing outcomes for their customers. As SAS champions driving value from analytics, she some of their use cases across the financial institution value chain shared with the delegates.
Anggaraini delved into the biggest focus area of SAS I.e. risk management for banking and insurance industry. She shared with the delegates the details of the SAS fraud and security intelligence solutions and how it enables users to stay resilient and relevant in the post-COVID-era.
She concluded her presentation by sharing some successful implementations of the above-mentioned solution.
Speed of service delivery is of utmost importance in the new financial industry world
After Anngarani’s information-rich presentation, Gerard Mcdonell, Regional Solution Director Fraud & Security Intelligence, SAS came forward to share his perspectives with the audience.
In his very first slide, Gerard highlighted the importance of the speed of delivery in the post-Covid era. Banks and financial institutions are under a lot of pressure to meet the changing demands of their customers in this new world. The need to go digital for financial institutions in the current scenario comes with the downside of increased risk of financial crimes and fraud.
He underscored the need for speed by quoting Klaus Shwab, who said that in this new world it’s not the big fish that eat small fish but the fast fish eating the slow fish.
Gerard validated his statement by citing a recent example where a large European bank lost an opportunity to expand their market due to the lack of agility and velocity in their DNA.
He also echoed the sentiment that the pandemic has only exacerbated the situation for financial institutions forcing the unbanked population to make a leap to digital banking. This, on one hand, has added to the existing challenges for the banks but, on the other, has exposed them to a new customer base that they can tap on.
He went on to shed light on the ways AI can support them. They include accuracy and efficiency with compliance, quick identification of fraudulent transactions, fast and accurate credit scoring.
Gerard strongly advised the colleagues from the industry to embrace the latest advancements in AI to tap on this newly created customer base.
He concluded his presentation by sharing how SAS helped a major bank to significantly improve its fraud management by implementing the fraud management and credit authorisation solution together.
Learning to mitigate the effect of COVID-19 crisis in the financial sector industry
After Gerard, Alfanendya Safudi, Senior Vice President, Head of Credit Portfolio Risk at PT. Bank Mandiri shared his learnings with the delegates.
Alfanendya opened his slot by sharing that, just like the most of delegates and their organisations, Bank Mandiri had very limited visibility of the impact the COVID-19 crisis would have on the economy.
But early stress testing and contingency actions are key to mitigating the impact of COVID–19 outbreak. He ardently advocates stress testing as an effective way of mitigating COVID risk and also emphasised that the test needs to be updated frequently as well as supported by robust tools and systems.
He cautioned the delegates to not rely on a singular stress cycle and undergo multiple rounds of it as they did at Bank Mandiri.
Towards the end of his presentation, Alfanendya shared with the delegates how banks need to prepare as they move forward in the new normal. He also agreed that there is an increase in non-financial risks like fraud, scams, cyber-attacks etc. during the COVID-19 crisis that needs to be better prepared for in times to come.
After the informative presentations, it was now time for the more interactive part of the session: the polling questions and discussions.
On the question about your organisation having the tools to model out the P&L under a wide range of different economic and non-economic scenarios, a majority of the audience voted that they use traditional forecasting techniques, and they are good enough (77%).
One one of the delegated reflected that they are currently using the traditional techniques that are sufficient for now but they are also open to new technologies out there that can help them do it better.
On the question about the impact of the pandemic on their operational risk exposure, particularly relating to fraud and compliance, a major chunk of the delegates voted that increased online and application fraud, along with greater resource demands to keep AML/ KYC/ screening compliance under control have been impacted (50%).
A digital executive shared that increased online or payment fraud and application fraud are bigger impact areas in their organisation that they need to work on.
On the final question about the top priorities, while managing risk management portfolio, the delegates seemed divided between updating their legacy with a modernised risk infrastructure (36%) and using AI and machine learning for credit scoring, capital optimisation, back-testing and model validation and regtech (36%).
After the polling session, the Virtual Breakfast Insight reached a timely conclusion with closing remarks by Febrianto Siboro, Country Managing Director, SAS.
Febrianto began by thanking all the delegates and speakers for joining the session and sharing their insights with the audience. He encouraged the audience to make use of various AI/ML and analytics solutions by SAS to augment their service delivery and team SAS would be happy to entertain their queries and demonstrations for the same.
Hong Kong’s Chief Executive recently gave her much-anticipated fourth Policy Address on 25 November 2020, one report notes. In it, she pledged to uphold “one country, two systems” and with a promise to revive the special administrative region’s economy battered by social unrest and the COVID-19 pandemic.
Hong Kong’s chief executive has pledged to roll out 200 new initiatives during Wednesday’s annual policy address, with sources saying the Greater Bay Area integration plan will take centre stage – even though the city’s leader is expected to make it clear that untraced coronavirus cases must hit zero before any new cross-border measures can proceed.
Sources stated that among these initiatives is a youth employment project that aims to create thousands of jobs for young Hongkongers in the nine Guangdong cities included in the Greater Bay Area scheme, Beijing’s ambitious plan to integrate the cities with Hong Kong and Macau to form an economic powerhouse.
Job opportunities would be offered in sectors ranging from technology and finance to cultural and creative industries.
Insiders also said the CE might unveil some modest improvements to the Stock Connect schemes between Hong Kong, Shanghai and Shenzhen, such as allowing more Hong Kong-listed biotech firms to take part, and promoting private equity funds, family offices and real estate investment trusts.
HKSTP’s response to the CE’s 2020 policy address
The Hong Kong Science and Technology Parks Corporation (HKSTP) supports various innovation and technology (I&T) related measures outlined in The Chief Executive’s 2020 Policy Address. Such measures will promote closer collaboration between Hong Kong and Shenzhen and foster the development of Hong Kong into an international I&T hub.
The Park welcomed the initiative for the Corporation to manage certain areas of the Innovation and Technology Zone in Futian, Shenzhen. This will support institutions and enterprises to start their business in the GBA, enhancing the I&T value chain and overall development of the ecosystem.
Biomedical technology is one of the strategic focuses of HKSTP. There are approximately 150 biotech companies in the Park, which have grown significantly over the past few years. With the inclusion of pre-revenue biotechnology companies listed in Hong Kong and stocks listed on the Mainland Sci-Tech Innovation Board meeting certain prescribed criteria in the scope of eligible securities under the mutual market access programmes, it will create more opportunities for local biotechnology companies to raise funds for research. The Park believes this initiative will be beneficial to promote venture capital investment and accelerate the R&D process of biotech companies.
On talent development, HKSTP announced earlier this year the launch of HKSTP InnoAcademy and the Technology Leaders of Tomorrow Programme, which has received an encouraging response. HKSTP will fully support the government’s Global STEM Professorship Scheme and Greater Bay Area Youth Employment Scheme, helping young talent pursue a career in the I&T sector, experience and capture opportunities offered in the region, and at the same time expand the talent pool.
HKSTP welcomes the upcoming Smart City Blueprint for Hong Kong 2.0 to further accelerate smart city development. HKSTP will continue to serve as a living lab and work alongside the government’s plan to drive the application of technologies in key areas including 5G, sensors, data, AI and robotics, and IoT, supporting relevant industries and application developers. HKSTP will also support the government’s drive for Art-Tech which will boost the application of technology in arts and creative industries.
The Chairman of HKSTP stated that under the impact of the pandemic and economic uncertainty, local start-ups have shown their capabilities and adaptability. He noted that HKSTP strives to empower partner companies to capitalise on the opportunities in the GBA and overseas, as well as to strengthen partnerships and networks.
HKSTP believes that I&T will be the driving force for industry growth in the new normal, powering the growth of new economies and the domestic and international dual circulation. HKSTP will continue its efforts together with ecosystem partners in nurturing I&T talent, accelerating R&D and commercialisation of innovation.
The 2020 Vietnam Artificial Intelligence Festival (AI4VN) opened on 27 November in Ho Chi Minh City with the theme of AI and its response to the COVID-19 pandemic.
Jointly held by the Ministry of Science and Technology, over 500 leading Vietnamese and foreign professionals in the field attended the two-day event. AI is considered to be one of the core technologies of the fourth industrial revolution, with many countries having recognised its significant impact across all social aspects.
According to a media report, Vietnam is no exception and the event was expected to drive the development of AI in the country by connecting elements within the ecosystem, from research institutes and universities to enterprises, technology firms, start-up companies, and the AI community.
The gathering also aimed to promote the research and application of AI in various sectors such as healthcare, education, business, trade, finance, and agriculture. It was also an opportunity for business executives to adopt a pioneering role in the development and application of technological solutions to help their companies stand firm against the varied impacts of the pandemic.
During the two days, there were be six workshops on AI in banking-finance, AI in healthcare, AI in enterprises, AI in human resource training, building the AI ecosystem in Ho Chi Minh City, and computing infrastructure for AI.
The Youth Startup Forum also opened in Hanoi on the same day. Taking place amid global disruption caused by the COVID-19 pandemic, the event was part of an emerging nation eager to display the dynamism of its startup ecosystem among investors/investment funds, enterprises, and experts worldwide via virtual events.
Themed ‘Respond – Transform – Breakthrough’, the event was structured into 12 technology villages: Medical Technology, Agricultural Technology, Educational Technology, Tourism and F&B Technology, Frontier Technology, Financial Technology, Smart Cities, Social Impact, Student Start-ups, and Local Start-ups, Community, and International village.
There were 250 startup booths, attracting nearly 200 investors, 150 corporations, enterprises, and business accelerators virtually and physically. Addressing the opening ceremony, the Minister of Science and Technology Huynh Thanh Dat said the startup ecosystem had entered a new and important period for development, requiring efforts and coordination from government agencies, startups, and businesses.
There is also a need to work together to innovate from working methods to mindset, developing human resources, and creating a proper competitive environment. Startups should be proactive in renewing and changing the development model to create more value, he said.
As OpenGov Asia reported, the country also recently held the Vietnam Smart City Summit, which featured the participation of around 1,000 delegates via online platforms from 27 places in provinces and cities. Vietnam has proactively joined smart city networks in the region and around the world. Currently, Vietnam has three cities, having been in the ASEAN smart city network since 2018, and nearly 40 localities implementing smart city models.
The summit was a great opportunity for management agencies, experts, speakers, and enterprises from Vietnam and abroad to share and contribute their valuable experience in the building and development of smart cities.
The cabinet will be asked to endorse the country’s first artificial intelligence (AI) ethics guidelines by December 2020 to ensure the proper use of this advanced technology, the National Digital Economy and Society Committee (NDESC) stated recently.
Speaking at an AI ethics forum yesterday, the Secretary-General for NDESC stated that AI is useful for many aspects and it is vital to find a framework for its proper use. AI is a powerful tool that can be used both positively and negatively, she said.
AI ethics principles have been approved by the NDESC, which is chaired by the Prime Minister. The NDESC office plans to ask the cabinet to endorse these guidelines for public use of AI by next month. The NDESC operates under the Digital Economy and Society Ministry.
Energy, agriculture and healthcare are three key sectors that can leverage AI and the need is to educate all parties in using AI morally, she said. Ethics guidelines for other digital technologies could be rolled out in the future. The AI ethics guidelines cover six principles.
First, AI needs to be used to support competitiveness and sustainable development.
Second, it must take laws, ethics and international standards into account. Accordingly, AI needs to be researched, developed, designed and used in service in ways that comply with laws, norm and ethics, and fend off human rights violations and privacy breaches.
AI should not be used to frame human destiny while the design of it must cater to humans as a centre, said Ms Vunnaporn.
The third concerns transparency and accountability. All stakeholders, ranging from researchers and designers to developers to users, need to have accountability, with AI engagement through their roles.
The fourth involves security and privacy. AI, she said, must not be developed to commit fraud or cause threats to others. AI should have mechanisms that allow humans to interfere with its system to prevent harm.
The government should also work with other countries to stem the development of AI technology to automate weapons, she said.
The fifth concerns diversity and broad coverage without monopoly or discrimination. The final principle involves reliability, as AI technology must be reliable and create public confidence in its use. The NDESC Secretary-General said AI should also have the ability to gather and process user feedback.
Speaking at the same forum, the National Technology Head of the Thailand branch of an American multinational technology firm, said that company has a special unit responsible for ensuring AI development is ethical. Three aspects need to be carefully considered when AI is developed, he said. The first concerns the decision to grant loans and the second is linked to health risks. The last is human rights violation risks, such as facial recognition.
The Chief Executive of a Bangkok-based data service analytics firm said the company has an AI board that thoroughly considers AI projects that could have ethical risks, such as those in connection with the military.
According to Cert NZ’s most recent quarterly report, cybersecurity incidents have reached a record high. For the quarter July 1 to September 30, the cybersecurity agency logged over 2,600 incident reports from individuals and businesses. This is the highest number to date and reflects a 33% increase over the previous quarter.
Cert NZ’s Director Rob Pope was of the opinion that the figures were not unexpected, in the light of the recent flurry of distributed denial of service (DDoS) attacks, ransomware and online scams. DDoS attacks are primarily volumetric in nature; in essence, they aim to overload websites by directing traffic to them to overwhelm their capacity.
OpenGov Asia had reported in late October that New Zeland had seen a surge of increasingly sophisticated malware attacks that are affecting everyday New Zealanders as well as large organisations. The malware campaign was being spread through attachments or links in emails was affecting New Zealanders. The attacks at the time had been predicted to cause widespread disruption and loss of revenue and data.
Not surprising then, the most common incidents that were reported were cyberattacks dispersed by email. Emotet, the virus reported above, was responsible for almost a third (34%) of the malware incident increase on the previous quarter.
Earlier in September, a wave of cyberattacks exposed worrying vulnerabilities in some of New Zealand’s key institutions. Most notably, for six days, the nation’s stock exchange – where tens of millions of dollars in shares are traded each working day – was laid low by the attacks.
Based on the reporting, the estimated financial loss was at $6.4m which is almost double the average quarterly loss of was $3.6m that is based on the last 14 quarters. The finance and insurance sector accounted for 60% of reports about incidents affecting organisations.
Of all the Incidents that were reported that had a financial loss component, thirteen were over $100,000. There were five incidents that involved the unauthorised transfer of money as a result of businesses having their email accounts compromised. Two related to “a new job or business opportunity” and the remaining related to scams including cryptocurrency, investment, fake lottery or prizes, and romance scams.
Pope said that these incidents ought to serve as a wakeup call for Kiwis to tighten up their online security. He encouraged New Zealanders to update their operating systems and software, ensure they use long, strong and unique passwords, and install antivirus software.
In the light of the upcoming season, cybersecurity experts have warned people to be especially vigilant and look out for holiday season scams. The Domain Name Commission along with InternetNZ has designed a fake webshop to practically demonstrate how citizens can spot signs of dubious e-commerce. A quick web search along with the terms “scam” or “review” will often go a long way towards alleviating or reaffirming concerns.
Graeme Muller, CEO NZTech, said in a recent publication that the nation has seen increasing cybersecurity threats for people and businesses as ‘bad actors’ attempt to take advantage of the pandemic. Operating within an increasingly digital environment, Kiwis are constantly under threat of cyber attack. Security should be top of mind for businesses, organisations and government. Including security as a pillar of a digital strategy is the best way to ensure peak performance while protecting people.
The country’s new Privacy Act comes into effect on December 1, 2020. Changes include the introduction of a privacy breach notification regime. This means if an organisation experiences a data breach where private information is lost or stolen and believes the breach could result in serious harm, it’s required to notify the Office of the Privacy Commissioner and affected individuals as soon as possible.
On a related note, the annual Cyber Security Summit has been delayed this year but is scheduled to return in February next year. The gathering explores new trends and the importance of cyber literacy across all levels of business.
The Chennai Municipal Corporation is deploying technologies to prevent flooding and water stagnation after cyclone Nivar hit the region last week.
It is using a three-wheeled automated tree-cutter machine in several parts of the city. Also, robotic machines fitted to mini-tractors to lift garbage, an aquatic weed harvester to remove weeds from water bodies, and amphibians used to remove silt from the canals, a news report noted.
According to Chief Minister Edappadi K Palaniswami’s tweets, “High tech machines are being used to remove water stagnation at the flood-prone localities along the water channels such as Velachery, Adyar, and Mambalam.”
Corporation officials said that these machines were used throughout the night to make way for the smooth flow of water. “We have deployed amphibians and robotics machines to remove silt in water bodies in almost all the zones. These machines were all working throughout the night with two officials present,” a government official said.
The robotic tractor was used at the Mambalam canal, while the Adyar Creek was being dredged using an amphibian. The civic body is deploying ‘super recyclers’, which are fitted into huge tankers.
“They also have very broad pipes and more powerful motors, unlike the normal sewage removal machines used in the city. Up to 12,000 litres of water can be sucked out in about 20 minutes with these machines,” the official said, adding that in most of the broad roads, they use this machine and less manual work was involved.
The corporation has distributed six motorised tree-cutters in the city. “Three have been given to the central zone, two to the north zone and one to the south zone,” the official said. The machines were used in several areas such as Adyar, Nungambakkam and Ashok Nagar where several trees fell.
The cyclone has left Chennai with an excess of 36% rain for the season so far. The India Meteorological Department (IMD) has forecast that a low-pressure area may form this week. Weather trackers said there are chances of it intensifying into a cyclonic storm.
The forecasting, planning, and management of critical events help authorities prevent disruption of life and damage to property. Governments rely on several, specific systems for critical event management. Such programmes are essential to national well-being, especially with the increase in natural disasters. But, more often than not, they operate in isolation of each other. According to world experts in Critical Event Management – Everbridge, this approach can create duplication in information and processes, data contradictions, and, when unchecked, could lead to loss of life and damages.
Unlike fragmented or homegrown tools, Everbridge offers the most proven modern public warning platform which delivers best of breed capabilities to help governments and public authorities keep people safe before, during, and after critical events, anytime and anywhere in the world. The Everbridge Public Warning platform delivers the most comprehensive, flexible, and modular solutions for population alerting to suit the needs of each city, state, or country.
The Everbridge front-end alerting gateway can be deployed as a standalone solution through to more sophisticated hybrid or multi-channel systems. This combines cell broadcasts or location-based SMS technology to send targeted alerts to mobile phone users, through secondary channels including mobile apps, emails, SMS, voice calls, sirens, radio, television, social media, and opt-in address-based systems.
A finance service company recently upgraded Malaysia’s technology hardware sector to positive from neutral as they expect the sector will ride an imminent upcycle that appears to be heralded by positive growth of the global semiconductor industry.
In a note today, the research house’s analysts stated that they adopt a positive growth outlook for the tech sector due to rollout of 5G networks, the ramp-up of semiconductor components and equipment, development of sub-sectors such as the Internet of Things (IoT), artificial intelligence (AI) and electric vehicles (EVs), and Industry 4.0.
They said that these should bode well for Outsourced Semiconductor Assembly and Test (OSATs), automatic test equipment (ATE)/automation manufacturers and electronics manufacturing services (EMS)/precision engineering companies.
Meanwhile, the World Semiconductor Trade Statistics projected that the global semiconductor market will grow by 6.2% year-on-year to US$452 billion in 2021 while the global industry association SEMI estimated that global semiconductor manufacturing equipment sales will grow by 11% year-on-year to US$70 billion in 2021.
It was noted that this upcycle would also be driven by the rollout of 5G networks across key cities — accelerated by the growing number of 5G-enabled devices (i.e. smartphones and IoT) and high adoption rates of 5G by key countries (i.e. China, US and South Korea).
They expect semiconductor equipment component and module suppliers, OSAT companies and ATE manufacturers to be key beneficiaries of such a favourable outlook, attributed to rising supply and demand for advanced chipsets and components (i.e. sensors).
This, in turn, would also lead to higher spending and stronger demand for semiconductor equipment. They also anticipated growth from up-and-coming tech sub-sectors — namely IoT, EVs and AI.
While such sub-sectors would be considered to be more niche (relative to the larger core semiconductor market), the firm believes there are selective opportunities for semiconductor equipment/ATE manufacturers while the booming of any tech sub-sectors would generally entail demand for components and chipsets.
Elsewhere, the progressive transition into Industry 4.0 is expected to benefit automation companies.
While the Malaysian technology realm is trading at an average forward price-to-earnings ratio (PER) of 35 times, they think the rich valuations are justified by the potential earnings growth catalysts and upsides, in tandem with the sector’s upcycle, as well as strong domestic equity fund flows.
Malaysia’s Budget 2021 will push tech investment
According to another report, following the budget announcement in early November, the tech industry saw an increased allocation for 2021. Despite some grievances on allocations towards certain sectors, the overall budget allocated to the tech industry was well-received by all parties.
The cybersecurity industry in Malaysia, in particular, was glad that RM27 million has been allocated to CyberSecurity Malaysia to heighten cybersecurity in the country. CyberSecurity Malaysia Chief Executive Officer regarded the government’s initiative as recognition to prevent the threat of cybercrime and at the same time, ensure a safe and conducive cybersecurity infrastructure in Malaysia.
He said that, based on data from the Cyber999 Aid Centre, which was operated by CyberSecurity Malaysia, 9,042 reports had been lodged up to last month, compared with 8,770 last year. He said the three most reported cases were fraud, intrusion and malicious code.
Tech firms lauded the emphasis on digital technologies and upgrading telecommunication networks which will propel Malaysia further, accommodating the needs of digital lifestyles while spurring economic growth for the nation.
The Managing Director of the Malaysia branch of a US-based networking hardware company commended the focused measures to accelerate digital transformation in various areas and industries, including the emphasis on IR4.0 technologies such as automation in the commodity and SME sector.
This includes the allocation of RM1 billion under the Industry Digitalisation Transformation Scheme and additional RM150 million under the SME Digitalisation Scheme Grant and Automation Grant that will spur the manufacturing and labour-intensive industries to rethink their strategies as reliance on human capital decreases, the impact of border control measures continues and market demands changes.
New Zealand tech companies are experiencing significant growth driven by rising export revenue. Thie trend seems to be due to an increasingly diverse international market that is driving demand for NZ designed and manufactured tech products according to a recent report.
Technology Investment Network (TIN) Report conducts independent market research and collates information from approximately 1000 companies, reporting on the largest 200 (TIN200). The research is collaborative with widespread industry support and participation.
Key sections of the report include analysis of ownership structure, market sector analysis, profiles of the industries fastest-growing companies, economic impact review, analysis of R&D, profiles of promising early-stage companies and a look at which New Zealand regions have the greatest growth in technology.
The report launched earlier in November shows export revenue for the TIN200 companies rose by 10.6% to a total of $9.4B this year. The report reflects, to some extent, the impact that the pandemic has had on the tech sector’s performance in 2020. None the less, the overall TIN200 trend indicates strong growth despite adverse tough economic conditions globally.
With the impact of the pandemic starting to take global effect in the final quarter, total TIN200 revenue reached $12.7B. This is up 8.3% – or $972m – on 2019, but a dip in overall revenue growth, dropping below the $1B recorded last year.
According to the findings, ICT firms show strength yet again, lifting both their TIN200 presence and profitability. With 101 companies now in the TIN200 (up from 94 last year), ICT continues to be the driving force behind the New Zealand tech sector, growing its revenue by 11.4%, comparative to the 8.3% overall growth of the TIN200.
A strong indicator of the promise the group holds, and by extension the sector, is the annual revenues of the companies. In 2015, only 38 tech companies in New Zealand had revenues over $50m; in 2020, this has grown to 56 companies.
Companies with revenue of over $50m accounted for 70% of growth in the TIN200. Able to scale further and explore new market opportunities from a position of strength, these companies are in a good position to grow.
Over 4,000 new jobs were created by the group in 2020, an 8% increase from 2019. With this, the total number of NZ tech sector-generated jobs internationally was 55,167 – of which over 50% are employed in New Zealand. These employees earned about $4.5B in wages; another first for the TIN200, with the average wage for a TIN200 employee topping $82,000.
In a COVID-19 socially-distanced world, contactless transactions are the norm, driving mobile and digital solutions. Not surprisingly, Fintech was the fastest-growing sector on the TIN200 for the fifth consecutive year. With a 5-year CAGR of 31%, new entrants and booming demand, much will be expected of the NZ Fintech sector in 2021 and beyond.
Revenue growth from Public Companies in 2020 was exceptionally strong, with the 25 listed companies on the TIN200 representing nearly two-thirds (62%) of the total revenue growth – an impressive growth rate of 20% on last year.
With 120 of the TIN200 companies headquartered in Auckland, New Zealand’s largest city continues to be the powerhouse of the NZ tech sector. The capital region performed well too, with companies in the Wellington region generating over 23% of the TIN200 revenue and registering the fastest growth rate at 10.6%.
The founder and managing director of TIN felt that the TIN200 companies are well-positioned in terms of scale, growing profitability and global spread to absorb the negative impact of COVID-19. The ongoing double-digit export growth with the accompanying increased employment allows the sector to take advantage of the opportunities for growth as a result.