Stefan Pfister talks in an interview about KPMG Switzerland’s positive annual results, key developments in the audit and advisory business as well as substantial investments.
Digital disruption is still the main driver: It impacts each and every business area and calls for enormous investments in technology, personnel and infrastructures. However, it also opens up entirely new possibilities in both Audit and Advisory for performing comprehensive client data analyses, using client data, automating standard processes or developing innovative process optimization platforms. Persistently low interest rates were another positive driver. They created fertile ground for many mergers and acquisitions. Of course, they also come hand in hand with a heightened risk of overleveraging. On the other hand, unresolved efforts to implement reforms in key policy areas such as the pension system, healthcare, energy, labor law, digitalization and market access are putting a damper on growth as they kindle uncertainty and a corresponding reluctance to make new investments. It’s now up to the new Parliament to promote sustainable – and also business-friendly – reforms!
Absolutely. New technological innovations, both on the clients’ side and on KPMG’s end, were partly responsible for the positive trend in audit: They not only make it possible to completely redesign financial and leadership processes, but also help standardize, automate and centralize key audit tasks. This strengthens both the reliability of our audit results and the relevance of our reporting even further.
Demand for Global Mobility Services was one factor behind the good results in Tax and Legal. The firm uses mature technology solutions that let our clients tackle even extremely complex tax challenges involving hundreds or thousands of expats in a legally compliant manner. It even helps them leverage the benefits of global mobility. We also saw strong demand for tax and legal advice related to large mergers and acquisitions as well as complex restructuring projects.
We posted a minor drop in revenues in the Management Consulting practice due to efforts over the past two years to realign and refocus the function; this also involved a reduction in capacity. Demand for advisory services to master the digital transformation, plan and implement ERP systems, optimize corporate finance functions and establish cyber security, however, is and remains high. Clients from the life sciences sector, in particular, required an enormous amount of support in their battle against white-collar crime and efforts to ensure all-round compliance with legal requirements in every country. Insurance clients, in particular, asked for help with cyber security threat mitigation and on their compliant introduction of the new IFRS 9 and IFRS 17 accounting standards.
Deal Advisory continued to perform very positively. That’s where we support clients through every phase of business (or business unit) acquisitions and sales as well as in the planning and creation of joint ventures, strategic partnerships and restructuring.
Especially in staff development, technological innovations and key partnerships. Our innovative strength benefits our clients in many ways: We invested around 6 percent of our revenues in digitalization last year with the goal of improving the meaningfulness of data analyses even further and making solution proposals even more effective. At the Insights Center, KPMG Switzerland’s data & analytics flagship, our clients experience a new dimension of data visualization and analysis that lets them put their own company data to systematic use at a level of quality that was unattainable in the past. However, I’d also like to mention the Board Leadership Center, an exclusive high-caliber networking platform for board members that we just recently founded.
As a forward-looking company, we invest a great deal to ensure that our employees have attractive conditions including more flexible working models, lifelong learning initiatives as well as efforts to promote our employees’ good health and their participation in physical activities. KPMG invested more than CHF 8 million in training and further education in 2019 and hired around 600 new specialists. Another invigorating development was our move to the firm’s (temporary) new headquarters in Zurich-Binz and Geneva’s new Pont Rouge district, two trendy neighborhoods.
Our efforts to position Switzerland as an attractive, sustainable and trustworthy business location saw us getting actively involved in many different areas including commitments at economiesuisse, digitalswitzerland, Women Corporate Directors and many other national, regional and specialized networks. Plus, we help promote a fact-based, public discussion on important forward-looking issues by conducting a variety of studies on key issues facing Swiss businesses.