What areas will APAC businesses be bracing themselves for in 2022?

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As the world begins to open up, businesses in Asia Pacific will continue to proactively address changing customer and employee expectations, according to a report by Forrester's prediction for the region in 2022. At the same time, only a few businesses will fully pivot from adapting in the pandemic, to adapting to the global climate crisis. Furthermore, access to digital services will lead to heightened customer expectations in the coming year. This, in turn, will drive businesses in Asia Pacific to nurture customer trust and commit to sustainability through demonstrable climate action.

The past year has been a tumultuous time for many industries and it is predicted that firms in this region will embrace controlled positive change. This includes putting in place future-fit tech strategies such as cloud-native approaches to improving business agility, as well as hybrid work strategies. According to Forrester, leading Asia Pacific organisations will lead the charge in building customer trust and tackling climate change. As the year gradually comes to a close, here are the five areas businesses in Asia Pacific should brace themselves for in 2022.

1. Financial services will be the first industry to adopt trust as a formal metric

Consumers’ concerns over issues such as public health, cybersecurity, data privacy, and sustainability have led to a major trust crisis. Forrester predicts that companies and government organisations will, in turn, use trust to demonstrate their commitment to customer relationships; with financial services taking the lead in Asia Pacific.

According to the report, people’s financial well-being and trust in financial institutions is a matter of systemic economic risk. The report foresees that in 2022, four to six financial services pioneers will begin measuring and systemising trust; similar to how British insurance firm Natwest Group’s net trust score is linked to business KPIs such as customer deposits.

The year 2022 will also see some businesses take advanced measures to protect trust. An example would be the consortium of 25 financial services and tech businesses participating in the Singapore Monetary Authority’s Veritas initiative, which sets out principles for the ethical use of AI in credit risk scoring and customer marketing.

As consumers have become more active and empowered, Forrester predicts that businesses that dismiss the importance of trust will lose 10% to 40% of their consumers, especially those who are unforgiving towards brands that break their trust.

2. Dedicated sustainability leads will be named at a rate well below the global average

Businesses should appoint a sustainability leader and create a dedicated funded function to ensure they do right by their brand promise towards empowered consumers. Consumers who purchase based on brands’ values have made businesses more aware of their CSR and sustainability practices. According to Forrester, 42% of businesses in Asia Pacific said the importance of CSR and sustainability as a business initiative increased due to COVID-19. However, these have been merely performative and have not made any significant difference in climate change.

However, the report showed that only 30% of businesses are making their sustainability efforts more transparent; 30% are reducing their carbon footprint or e-waste; and 13% are applying for B Corp certification. This certification is given to businesses who achieve a minimum score against a set of social and environmental standards.

At the same time, only 26% of Fortune Global 200 businesses in Asia Pacific have appointed a sustainability lead at the director, VP, or executive level; compared to 81% in Europe, the Middle East, and Africa, and 92% in North America.

According to the report, most the sustainability efforts of most businesses in this region are driven by compliance and investor pressure, as opposed to strategic planning and risk management – as they should. Such “short-sighted approaches” may meet the requirements of being a sustainability-driven business, but will not have any substantial impact on climate change.

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3. A third of firms with cloud-first strategies will shift to cloud-native

The year 2022 will see some businesses favour cloud-native strategies over cloud-first, especially when it comes to powering tech-driven innovations, such as the electronic know your customer solution by Hong Kong financial services firm United Asia Finance. They will also use service mesh - an infrastructure layer that controls service-to-service communication over a network - for microservice support, which increases business agility.

Embracing a cloud-native approach will allow businesses to accelerate enterprise modernisation and implement future-fit technology strategies. However, Forrester predicts this shift to be slow, and limited to businesses that commit to modernising their practices, including infrastructure as code, DevOps automation, and composition over customisation. Similarly, companies not embracing cloud-native strategies will see limited benefits as their cloud-first plans stall.

4. At least one billion people will access digital government services

Governments in the region have been implementing initiatives that form the three pillars of a digital society - digital identity, digital currency, and data integration. According to the report, many Asia Pacific countries have already adopted digital identity solutions such as Aadhaar, myGovID, and Singpass.

The region is also progressively adopting digital currency in its daily operations. Over 20 million Chinese use e-CNY, trials are in the pipeline for the retail and wholesale industry in Australia, India, Japan, Singapore, and South Korea.

While integrated government data frameworks such as the Australia-Singapore Digital Economy Agreement and India-Singapore payment link are new and fragmented, the report foresees that tech innovators will seek opportunities to leverage all three pillars to build and offer differentiated capabilities.

5. Only 40% of businesses will make “anywhere work” permanent

Workplaces have begun to gradually open, as vaccination rates rise and the pandemic starts to stabilise in most countries. Forrester predicts that in 2022, 70% of large businesses across the globe will adopt some form of “anywhere work”, which allows employees to work from home, or any other part of the world for that matter.

However, region-specific pressures will force 60% of Asia Pacific businesses to bring the majority of their workers back to the office full-time. Adequate infrastructure plays a part, with only 34% of workers in the region’s manufacturing sector being allowed to work anywhere. This is also true for outsourcing businesses with purpose-built secure campuses and high availability facilities, as they can’t provide the same level of service in remote locations with poor infrastructure.

Potential conflict in the workplace and at home among family members were also contributing factors. Forrester predicts that implementing anywhere work in the Asia Pacific environment will lead to employees, unions, and regulators pushing back on contact centre operators who insist on monitoring employees working from home.

High-density extended-family living is also common in Asia Pacific, which led to 65% of information workers in the region saying they are eager to return to the office. More than 50% (58%) also said that they were less productive working from home during the pandemic, compared to 46% who said the same globally. Eventually, businesses in the region will have to come up with a region-aligned anywhere work strategy that will balance employee expectations with the feasibility of hybrid work approaches.

Photo courtesy: 123RF

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