Pieris Markou explains how the financial sector would benefit from a supervision mechanism
Maria Karaiskou 07:10 - 27 January 2024
Deloitte Cyprus’ Chief Executive Officer, Pieris Markou, emphasises the need for the establishment of a single, National Financial Services Authority, which would have a supervisory role in matters of the implementation of sanctions and would help improve the image of Cyprus in the outside world.
In an interview with InBusinessNews, in the context of "IN Business Forecasting 2024," Markou underlines that the above would also be one of the recommendations he would make to the government.
The CEO of Deloitte Cyprus points out that despite the problems and unforeseen difficulties encountered by the professional services sector in previous years, it has proven to be resilient to challenges and has managed to grow, contributing to the growth of the economy.
"This development gives us optimism that in the new year, our sector will do even better. We, as professionals, are already taking initiatives where necessary to strengthen our sector for the wider benefit of the economy," he underlines.
Indicating that the new year comes with challenges to the economic environment, Pieris Markou notes that forecasts generally indicate that it will be a critical year for future growth.
In this regard, expressing the belief that the most difficult challenges of the new year will be the management of internal backlogs from 2023, the Chief Executive Officer of Deloitte Cyprus declares that the country will have to show determination in modernising the public sector and the economy in order to continue its development path.
Regarding Deloitte Cyprus and its future plans, he underlines that the firm has demonstrated the ability to adapt and respond to the changes and developments of the times, and has strategically remained flexible, turning challenges into opportunities.
How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?
The new year comes with challenges within the financial environment. Forecasts generally indicate that it will be a critical year for future growth. Already, from 2023 we are experiencing negative effects from rising inflation and high interest rates, two issues that look set to continue to plague us.
Interest rates in particular, despite the anticipated reduction, seem likely to remain at high levels, affecting borrowers, citizens' incomes, demand for loans, investments and "doing business".
At the same time our economy must adapt to external adversities to achieve the desired growth, and especially to the continued liquidity from the war zones in Ukraine and Israel.
Despite the above, we must also mention the positives that we inherited from the previous year that allow us to maintain our optimism, such as the positive GDP growth rate, the reduced public debt, the decrease in unemployment, and the good performance of the tourism and real estate sectors that reinforce other sectors.
In this context, Cyprus should show determination towards modernising the public sector and the economy, in order to continue its development path.
What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?
The most difficult challenges of the new year will be the management of internal backlogs from 2023.
I am referring mainly to economic uncertainty, maintaining fiscal discipline, implementing reforms in the public sector and especially digital transformation, promoting energy planning, correcting distortions in the national health system, reducing competitiveness and productivity, and promoting tax reform.
It is important to also mention the need to stimulate business and strengthen investments in innovative sectors that can give new impetus to the economy, such as private medicine, education, research, technology, innovation, green, blue and sustainable development.
Upgrades are an ally, but let's not be complacent
Would you say that taking into account the latest upgrades, Cyprus is now well on its way to development?
The upgrades are a powerful weapon for our economy to continue the country's development path and foreign investment.
However, we must not be complacent. It is necessary to promote and implement the planned reforms in the state sector, and specifically the Recovery Plan and the strategies of Vision 2035 in order to be able to ensure long-term development.
Durable professional services
What do you think will be the course of the sector in which you operate in 2024?
Despite the problems and unforeseen difficulties encountered by the professional services sector in the past years, it has proven to be resilient to challenges and has managed to develop by contributing to the growth of the economy.
This development gives us optimism that in the new year, our sector will do even better. We, as professionals are already taking initiatives where required, to strengthen our sector for the wider benefit of the economy.
What are the biggest industry trends and changes you anticipate in 2024?
With the new year we expect to see how the international economic environment will be shaped due to the conflicts in Ukraine and Israel, which significantly affect not only our own sector, but also our economy more broadly, while an important development that we expect will also have a positive effect it is the anticipated reduction in interest rates, which affects businesses, investments and households equally.
As industry professionals, we attach great importance to the implementation of the much-discussed tax reform, which will further help grow the economy.
Recommendations to the government
If you could ask the government to take specific measures or formulate policies to support/enhance your sector, what would they be?
Through the Institute of Certified Public Accountants of Cyprus (ICPAC), we are constantly submitting proposals to strengthen the sector, and especially with regard to in-depth tax reform.
At the same time, we have given our opinions on the investment support framework, the strengthening of the business climate, the promotion of reforms, the fight against bureaucracy, the utilisation of new areas of business activity, the digital transformation of the state and the economy and others.
Beyond the necessary changes for deep modernisation, I strongly support the need for the establishment of a single, National Financial Services Authority which will have a supervisory role in the implementation of sanctions and which will help improve the image of our country outwardly.
This was also one of our recommendations to the government, that is to say, to implement a horizontal mechanism for the entire financial sector, for the supervision, both of issues related to money laundering legislation and the application of sanctions.
What are your organisation's plans and strategy for 2024?
Last year, Deloitte Cyprus completed 65 years of dynamic and continuous presence on the island. I am particularly proud to lead an organisation that, with the right strategy and vision, has grown from a small audit firm to one of the largest professional services companies in Cyprus.
We owe this success mainly to our people who work with zeal, maintaining to this day the same values and legacies of our founders, ethics, professionalism and integrity.
Recognising their contribution, we have invested and continue to invest strategically in our people and in implementing innovative policies and practices to transform our organisational culture.
Our strategy is guided by our vision to "make an impact" on our customers, on our people and on society. We implement policies and initiatives aimed at continuing to provide quality and sustainable services and solutions, and we will continue to do so.
Deloitte has proven its ability to adapt and respond to the changes and developments of the times, and has strategically remained flexible, turning challenges into opportunities. This is how it has succeeded even in times of turmoil to continue to grow and offer even better and more quality services.
We recognised the need for digital transformation early on, realising that the future of our services revolves around technology, data and talent, and this is reflected in our plans.
We have integrated the investment in technology into our strategy and in the future we will be able to provide even more upgraded solutions to our customers and people.
At the same time, following Deloitte's strategy, we will continue to invest in the development of innovative services based on ESG strategies, climate and sustainability, and targeted at green and blue economies.
Finally, it is important to mention the development of Corporate Responsibility and Sustainability initiatives through Deloitte's global program, World Impact, which aims for a better future for all.
We will continue to develop actions around four key pillars (access to education, tackling climate change, respect for equality, diversity and inclusion, and responding to the biggest challenges of local society), with the aim of having an even greater impact on society.
The future is based on technology and AI
What role does technology, such as artificial intelligence, play and what changes is it expected to bring about in your field?
As I mentioned before, Deloitte, recognising that the future is based on technology and AI, has included technological transformation in the centre of its strategy for years.
We have been focusing on digitisation and strategically using AI to improve our business performance so we can offer our customers a better level of service, and our people a better work experience.
When it comes to artificial intelligence we must recognise that it is not something completely new.
For years it has been in our daily lives through various technological applications, and it has transformed businesses, the needs and demands of customers, but also the way we interact with each other. In the banking and financial sector in particular, it is already being used for fraud detection, KYC & AML checks, credit scoring, financial forecasting and more.
At Deloitte, we are strategically automating our operations, strengthening cyber security measures, investing in ERP (Enterprise Resource Planning) and cloud technologies, and optimising our internal processes to ensure seamless operations with the goal of delivering solutions and services that deliver valuable insights to improve decision-making processes for us and our customers.
One of the priorities is to expand our capabilities in real-time data collection and analysis in order to provide faster and more effective strategic solutions to our clients.
By combining the power of artificial intelligence with technologies such as automation, analytics, visualisation and platforms, without of course ignoring the human factor and the need for changes in culture and the way of working, we will give new impetus to our field by offering new possibilities which can have a huge impact.