In an interview with Worldfolio, Henry Tan discusses the potential of the ASEAN region, Singapore’s competitive advantages and Nexia TS Group’s unique personalized service offering to its clients across Asia.
Established in 1993 by two experienced chartered accountants, Henry Tan and Sitoh Yih Pin, Nexia TS Group has grown over the years to become one of the top 10 largest accounting firms in Singapore, providing audit, tax and professional advisory services. In this interview, Henry Tan discusses the potential of the ASEAN region, Singapore’s competitive advantages and Nexia TS Group’s unique personalized service offering to its clients across Asia. On the topic of digitalization and the adoption of new technologies such as data analytics, Mr. Tan says that “you must be forward looking and technologically savvy in order to lead.”
ASEAN is formed by many countries in various progressive stages, some better developed, some with better infrastructure, some with less, so to try to move the whole block as one could be quite challenging. I would hope that perhaps there’s a couple of countries that will take the lead in terms of giving to the rest. Those who are better off will help the rest of ASEAN, otherwise there will be a lot of talks about what should be done, and little action will be taken. It works just like corporates; some departments are readier than others.
ASEAN is expected to be the fourth largest economy in the world by 2030 and I hope that countries like Singapore, Malaysia and Indonesia can help to pull the rest along. I would like to see Singapore leading in terms of innovation and also creating a technology test-bed. Singapore is a small country where new ideas can be easily tested here. As a minimum, that would be something that Singapore can put on the table.
A lot of countries seem to close their doors nowadays, except for the China bloc which, to me, is a very smart move. When the US, as the biggest economy, closes its doors for trade, then you’ll look at the other open doors. Everyone will move towards the door that is open and today that’s China.
ASEAN, naturally part of Asia and part of that bigger bloc, should tap into that advantage and move along with this wave of cooperation and openness. Not because I’m Chinese, but I appreciate how China is taking the lead by using cooperation as the modus operandi through their One Belt One Road Initiative. We could also use the same cooperation mode if ASEAN is better engaged amongst its own communities such as Singapore and Malaysia, while giving a hand to Laos, Cambodia and Myanmar. This could lead to more integration with the China bloc too.
I’ll give you an example of a success story. Pi Pay is a platform for cashless payment in Cambodia. The founder is Singaporean. The reason that he could quickly leverage on this platform is because of the lack of infrastructure in terms of a payment and banking system in Cambodia. In Cambodia, people are very willing to jump onto the cashless payments. Pi Pay is now the largest or second largest application.
If you look at Singapore, it’s the opposite because we have too many banks coming up with various payment systems and as a result, we don’t even know which one to use. In this context, the lack of infrastructure creates an opportunity for certain businesses such as e-commerce and cashless payments. This is changing the way of doing business, transaction and consumption.
Singapore implemented the CFE and ITMs purely for survival. We are a small country that relies very much on connectivity and transport. If we don’t have other value-creation, then sooner or later we’ll be irrelevant because nowadays with digitalization, you don’t really need to travel to do business.
We have other value-propositions. In terms of physical proportion, Singapore could be the Switzerland of the East. People would come here for the sun, for the sea, nice air, nice people, and because it is a great place for children to grow up with quality access to education as the international ranking for Singapore has always been high. Singapore is considered a relatively neutral country and therefore safe. The other proposition we have is for companies to set up their data centers and have their infrastructure – which could be regional or worldwide – built here.
In order to survive, we need to change our mindset. For example, if you take the ITM for the finance industry, the adaptation of changes for some smaller companies is very low because they are not ready to digitalize yet but that is the basic thing you must do. The implementation of the ITMS will be slow but you can see it already happening. If you go to any conferences in Singapore now, almost every conference will have something on digitalization, the future of work, IoT, cryptos. This helps us to look at the future instead of just focusing on the “now” and the short-term. What the ITMs do is make us think about innovation and transformation
Let me talk about Nexia TS Group’s inception. When I co-founded the firm together with my partner, we wanted to be a boutique corporate finance firm and our vision was that we would handhold SMEs towards growth, towards fundraising and expansion in the region. Our approach was to be very personal, our tagline was “your personal advisor” rather than “your service provider” or “the best in service.”
That resulted in many clients turning to us for various expansion plans. One of our clients wanted to go to China and at that point, we didn’t have anything in China. We were willing to help so we entered China with them and helped them grow their business together. Later on, we did the same in Myanmar and Malaysia.
Singapore-based clients trust people who they know well. Singaporeans have the Kiasu mentality, whereby we’re worried about making mistakes and we’re risk-averse. Usually, companies offer services and countries that they know, staying in places that they’ve operated in instead of catering to what the client really wants. That’s how we differentiate ourselves. We go where our clients really want to go and where it makes the most sense for them. That’s why our tagline is: “listening, thinking, growing Asia.” In terms of services, our clients have been needing IPO advisory, compliance, governance, cyber-security, data analytics, etc. and that’s we have been doing.
We are a mid-tier firm. Nexia International Network, of which Nexia TS Group is an independent member firm, also had a presence in countries like China and Malaysia. Nexia TS Group’s wholly-owned regional offices overlay as an added-element on top of the network to serve our clients. In that sense, we get the best of both worlds.
As an example, our clients in Singapore know that we have a small office in Malaysia. It’s more of a private client desk. We can then send our clients to Nexia SSY, which is a firm based in Malaysia.
In China and Myanmar, we were there first. What I believe is that the competitive advantage is that our client gets to enjoy the same culture and same service at the same time without losing the bigger, local knowledge that we can tap in under the international network. They don’t have to start from scratch every time.
We have been improving in data analytics and cybersecurity, as a few of our clients wanted to embark on that form of digitalization. We decided to acquire smaller specialized firms, so we acquired a data analytics company that not only will help our clients, but also our own internal process. Our digital dashboard now has a lot of analytics information. We test various analytics tools and then advise our clients.
For example, one of our clients who specializes in luxury products wanted us to implement a data analytics tool for them. Those tools allow them to know how a particular customer would prefer a certain style and price range; and based on preferences we could give a similar range of pricing, options, orders etc. The next step would, of course, be facial-recognition.
I think the CEO, or the Managing Director must always double up as the Chief Innovation Officer because nowadays, you must be forward-looking and technologically savvy in order to lead.
At the moment Singapore and ASEAN might look like a small market but it will be much bigger in the future. For the next American generations, this market shouldn’t be overlooked. In Asia people remember and cherish relationships. Today if an American company would help a smaller Asian company, the future generations would remember and there will be a payback. Hopefully, America remains a strong partner to our region as it took a long time to build the rapport and the respect there is today.
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Group CEO & Chief Innovation Officer