Reflections from my trip to Singapore
e-invoicing Trends, Digitalization, Business Network, E-invoicing
Let’s start by why I went to Singapore? There was an Exchange Summit, actually the first of its kind in Asia. And on top of that also OpenPeppol had its Management Committee meeting.
This time I want to share with you some notes and reflections from my first visit to Singapore. And even though it’s a stunning and beautiful place to visit I want to focus in this blog post on e-invoicing. I already mentioned in my reflections from the Peppol General Assembly, that Singapore has decided to launch Peppol as nationwide infrastructure to increase e-invoicing in Singapore. And of course, you might have also read that Australia and New Zealand are following Singapore footsteps and taking Peppol in use. I think one can summarize this quite well to the point that e-invoicing is a hot topic around the world.
Let’s start by why I went to Singapore? There was an Exchange Summit, actually the first of its kind in Asia. And on top of that also OpenPeppol had its Management Committee meeting. And if that wasn’t enough already, also the world’s biggest Fintech Festival took place: SFF x SWITCH (Singapore Fintech Festival and Singapore Week of Innovation and Technology)
In this post, I’d like to share with you some highlights and reflections from those events
- E-Invoicing is a hot topic in ASEAN countries. There are many countries thinking of launching e-invoicing solutions, such as Malaysia, Vietnam and Philippines. Then there is India, where the story of closing the VAT cap with Continuous Transaction Control (CTC model) is so tempting. Some countries will launch into e-invoicing sooner some later but eventually most of them will use one or another form of CTC. My only hope is that not all of them will figure out some unique way of doing that. This would be In order to avoid the discrepancy. And we should also keep in mind the initial reasons of moving toward e-invoicing: e-invoicing was an efficiency tool and not a sole fiscal policy tool, OpenPeppol introduced their vision on how to run CTC together with Peppol. In that way both gains would be achievable – closing the VAT gap for the country and efficiency for the business environment.
- Have you ever heard of a VAT lottery? In Taiwan the state is doing something like Portugal has done in Europe. In order to decrease a grey economy, the taiwanese government is motivating consumers to ask for receipts for every purchase they make. All receipts are registered in a central system provided by the Tax Authority and every month there is literally a lottery where 3% of the collected VAT revenue is shared between selected receipt holders. There are main prices where the receipt number matches 100% and smaller prices for smaller matches this all creates a lot of fuzz around the topic. Also South Korea has done something similar during 2011-2015 but as it fulfilled the target, they finished the game after that. Talking about electronic receipts, the importance of SME’s and the potential success of digitalization, this actually reminds me of Bruno Koch, who made quite a strong forecast where he said that by 2035 there will 2,5 times more electronic receipts floating around in the B2B world compared to electronic invoices.
E-Invoicing is the topic I constantly keep an eye on but this time I was also really curious to look at how other finance related technologies are developing in the world. And what better place to visit for this than SFF x SWITCH, the biggest event of this type in the world. Although not everything at the event is related to financial technologies, it is still about emerging technologies and interesting to look at the developments. There were 60 000 visitors, 1000 exhibitors, 500 speakers from all together 130 countries in SFFxSWITCH – amazing isn’t it?
What were the buzzwords?
Payments was clearly the word I remembered the most. There are so many different payment services available, mainly in Consumer to Business (C2B) and Point Of Sales (POS) related areas but also in B2B. It appears that every reasonable sized business has their own payment app nowadays. There were even solutions and hubs to merge different payment services (PHOTO), For me it showed that this is really an emerging market with quite a chaos around where everybody wants to get a share of the cake and most probably rather sooner than later, some kind of a consolidation will have to take place.
Artificial Intelligence was still a hot topic. How to make the most out of it and execute it not only for some cases in the business but everywhere. Also there was a lot of discussion how to do managed AI so that you have human readable reasoning for the decisions and not to end up with Apple like credit card issue where AI decided to offer female customers lower credit limits compared to male (https://www.bbc.com/news/business-50365609).
Like Brad Peterson (CTO & CIO of Nasdaq) commented: "AI is great but regulators would like to have the explain ability – if you decide something then you need to be able to explain why was this decision made." Following the AI discussions was really fruitful – after all where else to talk about AI than in Singapore, the only country in the world that has a nationwide AI strategy with 500M$ funding in 2020.
Third buzzword Blockchain was still there. Everybody is certain that it will disrupt the world - and the general sentiment is that it’s only about when and not about if. I was happy to hear that Interoperability was in discussion regarding Blockchain. How to make information usable over different blockchains not losing the trust at the same time. It was also interesting to hear that Bitcoin isn’t even the most important carrier of the blockchain and neither the most important cryptocurrency. Instead of that Libra got a lot of attention – do we need a single global currency for seamless 24/7 payments? Is the time for national currencies and international banking based payments over?
And then there were the topics of sustainability and financial inclusions which where a sort of red thread throughout the event. Once again this fits well to Singapore, a country that cares about the environment and is financially hyper developed. Unfortunately life is not everywhere as beautiful as it is in Singapore. There are still many people around the world who don’t have access to financial services and virtual money. And I am talking here about financial services in general and not about banks. Over the last couple of years there have been 1.2 Billion people who have got access to financial services. Kenya and India have been the showcase where the most important role to grow that figure hasn’t been played by the banks or netbanks but mobile and personal id. On that note, did you know that the amount of people who don’t yet have access to financial services in the world is 1.7 Billion people? Just for perspective that’s more than 20% of the population of earth.
I would like to finish my blog with a couple of ideas from one of the lectures I was able to attend. In those lectures leaders of the top technology companies Brad Peterson, Kurt DelBene (CDO of Microsoft) and Parviz Peiravi (CTO of Intel) were sharing their ideas around Innovation. Global product innovation and local user experience are more important than ever. How to achieve that? You need to engage the whole company to the innovation. That will motivate and bring out great talents as talent shortage is one of the most crucial questions. It is good when you can be the top employer in some city or region like Nasdaq is in Sweden in Umeå. It doesn’t matter where it is but young talents can be found everywhere. One good point to highlight is about the well known story about product life cycle. It’s important to balance between new and old in your portfolio and despite how hard it is to reengineer an existing successful product, sometimes you just need to do it or somebody else will do that.
I look forward to finding our procurement manager and challenge him with words from Brad Petersen regarding that having a stable and limited supplier base is beneficial for our organisation. “One should every year look at the numbers of their suppliers and who they are because if that base is not changing, it is clear signal that you are not innovating your offering as nobody cannot nowadays innovate alone.” As you know me - I can’t stand still, I constantly want to create something new and good for our customers.
As of now I wish you a peaceful Christmas and Happy New Year. New posts in next year already.
Ahti Allikas has been active in the e-invoicing industry since the year 2000. He currently works as Head of Partners and Networks at OpusCapita, and is responsible for the development of the e-invoicing ecosystem. Ahti is a member of the executive committee of the European E-invoicing Service Providers Association (EESPA), member of management committee of the OpenPeppol Association (PEPPOL) and also member of E-Invoicing expert group in the European Multi-Stakeholder Forum on E-Invoicing (EMSFEI).
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