Global tech

The latest Global Tech Report from KPMG forecasts a few hiccups in the march towards a digital future. 

Cybersecurity threats and skills gaps will stymie the embrace of emerging technologies such as Web3, the metaverse and quantum computing, predicts KPMG’s Global Tech Report 2022. The quantitative study, surveying 2200 executives worldwide, found 58 per cent of cybersecurity teams were behind schedule.

“Limited budgets appear to be exacerbating the issue,” the report said. “Insufficient funding for training employees and recruiting talent is having a widespread impact across enterprises, complicating the adoption of new enterprise systems, cloud progress and cybersecurity initiatives.”

When asked to name the biggest challenge facing the adoption of new technologies, 44 per cent of leaders identified “lack of capable talent” such as data scientists and engineers, making it the top-ranking barrier ahead of high costs, lack of skills and suboptimal data management. Manufacturing and healthcare industries were stuck without capable talent, limiting the adoption of digital technologies, research found.

Risk-averse cultures are ranked among the top five digital- transformation challenges, the report found, holding back initiatives for 24 per cent of respondents. “Of all the sectors

in the research, consumer retail and life sciences companies are the most likely to suffer from risk-averse cultures,” it said. “Risk-averse cultures in life sciences are rooted in the industry’s stringent compliance requirements that protect patient safety.”

Ongoing economic uncertainty may exacerbate companies’ ability to recruit and retain the right talent, with tightening budgets encouraging risk aversion. A quarter of organisations told researchers that lack of investment approval or executive buy-in is limiting progress with emerging tech.

Bolstering tech maturity

Despite the rocky outlook, KPMG found that leaders are bullish on tech maturity, with 61 per cent of leaders expecting to embrace most key new tech platforms within two years, and self-identifying as being either “very or extremely effective” with digital transformation. Their motivations coalesce around a few key areas, which leaders say are driving their digital transformation.

Director Sentiment Index

A narrow majority of directors support the pace of the Reserve Bank of Australia’s increasing interest rates, with some important caveats, according to the latest Director Sentiment Index. The survey of more than 1500 directors showed 51 per cent of respondents believe the RBA is raising rates at the right pace to fight inflation. However, 62 per cent said the increases will cause a housing debt crisis and 51 per cent believe this will cause a major uptick

in business insolvency. Interestingly, 47 per cent of directors believe the current institutional review into the RBA’s performance merits “should propose significant changes”. 

The biannual report flagged the lowest level of director sentiment since 2020. Directors were particularly pessimistic about the prospects of Asian economies, with only 35 per cent confident that these powerhouse economies would remain strong, compared to 63 per cent in the previous DSI survey.

Three out of five directors believe domestic economic conditions are likely to be impacted by adverse developments between China and Taiwan.

Sentiment across all global economies was lowest for Europe, with 59 per cent seeing the European economy as weak, and only 10 per cent saying they believe it is on solid ground. 

Key findings

• 47% believe current Australian business conditions are strong (21% say they’re weak)
• Climate change is the key long-term issue for the federal government to address
• Trust in the federal government has risen nine points since the last index to 38%
• Two-thirds (63%) believe advancing reconciliation with First Nations peoples is a national governance priority
• WA directors remain the most bullish about their state’s business prospects, with 74% confident conditions will remain strong in the next year
• NSW had the biggest shift in sentiment, with confidence in business conditions over the next 12 months dropping 17%. 

ASIC flags regulatory focus 

In a first for the enforcement agency, the Australian Securities and Investments Commission (ASIC) announced enforcement priorities for 2023.

“These priorities communicate our intent to industry and our stakeholders — and give a clear indication of where we will direct our resources and expertise,” said ASIC deputy chair Sarah Court at the corporate watchdog’s annual forum in November. “This is the first time ASIC has identified particular areas of enforcement focus, which we now expect to do on an annual basis.”

2023 ASIC enforcement priorities 

• Enforcement action targeting poor design, pricing and distribution of financial products including in relation to insurance, superannuation and other investment products and credit.
• Misleading conduct in relation to sustainable finance, including greenwashing.
• Misconduct involving high- risk products, including crypto assets.
• Combating and disrupting investment scams, including working with other regulators, industry and social media platforms to reduce consumer harm.
• Protecting financially vulnerable consumers impacted by predatory lending practices or high- cost credit, including conduct by unlicensed or “fringe” entities.
• Misleading and deceptive conduct relating to investment products, which obscures the risk, performance or nature of financial products.
• Misconduct in the superannuation sector, including misleading conduct and poor governance.
• Failures by providers of general insurance to deliver on pricing promises to consumers.
• Misconduct that involves misinformation through social media about investment products, including “finfluencer” conduct.
• Governance and directors’ duties failures, including those related to property schemes that expose investors to significant loss.
• Manipulation in energy and commodities derivatives markets.
• Unfair contract terms, including in insurance products.