IFRS 17: Is Asia ready?
12 April 2018
As I mentioned in my last IFRS 17 blog post, I recently returned from a trip to Asia, where I got the chance to visit Japan, China and Hong Kong. During this trip I gained a better understanding of Asia’s general state of readiness for IFRS 17 in comparison with Europe and the Americas.
We hosted IFRS 17 technology showcases in the four cities we visited, attracting over 400 clients. Major vendors also attended, but it was very clear that at this point, there is no one clear technology solution that deals with all the known client issues. This isn’t just in Asia – it’s the same around the world. We also met a number of clients individually to talk through where they are on their IFRS 17 journey - the answer was that most are in a very similar position to their European counterparts; impact assessment complete, and moving on to detailed plan design, thinking about what technology solution can help them through the next few years.
As some of you may already be aware, Japan does not have to comply with IFRS, but that does not mean they are not interested in current developments, and there was particular interest around the themes of comparability, consistency and transparency that are encouraged and enforced by IFRS 17.
One of the key challenges facing companies in China and Hong Kong face is a lack of resources. There is a scarcity of experienced talent able to implement IFRS 17 across the region, with a particular shortage of technology and change consultants, accountants, actuaries and project managers. This means that companies have to look further afield for this talent and assess if these roles can be fulfilled by offshore resources. Consideration is also being given to the possibility of available resources with similar skill sets fulfilling these required roles, despite not being specifically trained to do so; for example, given the shortage of actuaries, can a data scientist fulfil the role instead?
To avoid not being able to resource key IFRS 17 roles, the only obvious solution is to work smarter and effectively plan up-front to ensure that key resources are secured early on in your IFRS 17 journey, and that where these do not exist or are too expensive, a suitable back up plan is in place which may include using offshore resources.
Look out for my next blog which will address practical implementation issues and what can be done to minimise and mitigate them.