Stefan Pfister discusses KPMG Switzerland’s encouraging annual results and groundbreaking investments. He also reflects upon which experience from the past year made the greatest impression.
The main driver in the audit and advisory market is the digital transformation process which is affecting every aspect of the Swiss economy. While digitalization poses a number of different risks, it also lets us seize huge business opportunities, some of which include the centralization of data and processes scattered across the world or the systematic analysis and use of data. What’s more, it helps us perform increasingly comprehensive compliance checks, boost company performance, develop new business strategies and tap new fields of business.
As an accounting and consulting firm, KPMG provided its clients with effective support for this transformation process throughout the past financial year as well. This is reflected in an extremely positive result: Gross revenues rose by 1.1% to CHF 555.0 million and net revenues by 4.9% to CHF 423.5 million.
Audit boosted its results yet again. Digitalization has emerged as one of the strongest forces of change in this area, as well, and integrated financial processes permit an approach that is heavily based on digital data analytics. Accordingly, we developed cutting-edge software and tools in 2017 that will allow our clients to maximize their benefits from this trend. Fundamental changes in the job description and skill requirements of auditors are yet another consequence of digitalization and are reflected in the training and further development opportunities we offer.
Tax succeeded in growing its net revenues as well. Multi-year trends toward greater transparency, improved comparability and a more intense exchange of tax-related data continue unabated. They are taking their toll on corporate and private clients alike. We still expect to see heavy demand for advisory and explanatory services in response to uncertainties concerning the pending Corporate Tax Reform.
Advisory, too, substantially increased its net revenues to a new all-time high. This growth was driven by demand for help with transformation processes. The digitalization of companies and administrations, the related increase in the value of the data stored and the rise in the number of cyber attacks generated brisk demand for cybersecurity, data protection and certification services.
To ensure that we can provide our clients with the effective support they need, we invested heavily again this year: in staff development, in technological innovations and in key partnerships that will allow us to expand our business ecosystem. Last year we invested some 5% of our revenue in software and technology development as well as more than CHF 7 million in training and further development opportunities! During the same period, we hired nearly 600 new experts, most of whom from Switzerland. Our acquisition of Terria Mobile allowed us to enhance our expertise in the areas of digital transformation and mobile experience while also significantly expanding our range of digital services.
We also expanded our business ecosystem through targeted involvement in numerous digital platforms including digitalswitzerland, Digital Festival, Kickstart Accelerator as well as cooperative efforts with other networks. On top of this, KPMG continued to pursue its close collaboration with several universities. We are a clear opinion leader on key issues currently affecting the market and professional topics.
We are fundamentally reliant on Switzerland’s status as a healthy business location. In other words, anything that endangers this status also presents a risk to KPMG. We are observing developments in Switzerland with great concern, namely that the Swiss success story is unnecessarily being threatened by populist, harmful political motions. These not only put our liberal regime at risk but also upset foreign investors and local companies alike. We are seeing persistent political uncertainty and growing economic protectionism – in Europe and on the other side of the Atlantic. Both of these are extremely alarming for an economy like Switzerland’s, which relies on intact foreign trade relations. The question of how to deal with the country’s own demographic change as well as systematically adapting the pension scheme to take these changes into account will be major challenges for Switzerland. I’m convinced, however, that the country will develop in the right direction if it focuses on its proven strengths while also remaining open-minded to new ideas and innovations. And the same thing can be said about the future of KPMG Switzerland.
Interaction with our staff at peer group meetings as well as the rollout of an in-house partner development program where we meet in small groups to examine relevant issues and problems from our practical work in painstaking detail and come up with potential solutions. Seeing just how much energy and passion participants contribute to the process shows me how much empowerment is present in our company. That makes me extremely confident about the future and, as the company’s CEO, fills me with great pride.
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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.