Ronald Attard: The professional services sector in 2024 and challenges for business

Ronald Attard, country managing partner of EY Cyprus, expresses his assessment that the professional services sector will continue its upward trajectory in 2024 and beyond, as it is called upon to play a critical role in supporting the transformation of the Cypriot economy and businesses.

In an interview with InBusinessNews, in the context of "IN Business Forecasting 2024," Attard states that he is optimistic about the Cypriot economy - despite the challenges it has to face -, emphasising that it has repeatedly proven its resilience.

Ronald Attard makes a special mention of the return of Cyprus to investment grade, noting that it constitutes an important development, which officially closes the chapter of the economic crisis that opened ten years ago and is expected to have a measurable positive impact on the economy.

As he indicates, this upgrade is expected to strengthen investor confidence in the economy, leading to an increased inflow of long-term investment funds that until recently avoided investing in Cyprus.

Pointing out that the investors' image of Cyprus has been improving significantly in recent years, Mr. Attard notes, however, that, in order to capitalise on this trust, we must persist in the course of reforms in all important sectors of the economy, especially those that nowadays determine investment decisions.

Referring to EY Cyprus, the company's country managing partner emphasises that the organisation's ambition is to remain the fastest-growing professional services provider in Cyprus.

The economic environment in 2024

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?

Clearly, the broader economic environment will remain challenging, with persisting inflation, high interest rates, sluggish private consumption and, of course, geopolitical turbulences.

However, I remain optimistic for the Cypriot economy, which has repeatedly in recent years proven its resilience. In the second quarter of 2023, the GDP of Cyprus was 11.2% above pre-pandemic levels, compared to 3.4% for the EU as a whole.

The hospitality sector, a key driver of growth for our economy, has recovered as the losses from the Russian market have been replaced by other markets and is expected to surpass 2019 levels next year.

In 2024, the economy is forecasted to grow by just under 3%, driven by private consumption as well as investment projects currently in the pipeline, and those connected to the RRP.

Cyprus’ return to investment grade

Would you say that, taking into account the latest upgrades, the Cyprus economy is now well on its way to growth?

The country’s return to investment grade is a significant development officially closing the chapter of the financial crisis which opened 10 years ago, and is expected to have a measurable impact on the economy.

The upgrade will strengthen investors’ confidence in the economy, leading to an increased inflow of long-term investment capital, which, until recently have avoided investing in Cyprus.

Our Attractiveness Surveys showed investors’ perception of Cyprus significantly improving over the last few years already before investment grade was obtained, and I am confident we will see a further improvement.

Therefore, to capitalise this trust, we need to persist on the path of reforms in all major sectors of our economy, particularly the fields that today determine investment decisions: digitalisation, sustainability, and talent.

We must also review and strengthen our regulatory framework to ensure a higher level of transparency of business activities on the island.

The critical role of professional services

What do you think will be the direction of the sector in which you operate in 2024?

The professional services sector will continue on its upward trajectory in 2024 and beyond, as it has a vital role to play in supporting the transformation of the Cypriot economy and the businesses.

All over the world we are witnessing sweeping changes that have a direct impact on the business environment and economic activity. At the same time, consumers, employees and other key stakeholders increasingly expect from companies to place environmental, societal and governance issues at the top of their agenda.

Just as during the pandemic we supported companies, especially in hard-hit sectors, such as tourism and the public sector, to adapt to the new reality, in the years ahead, we continue to help our clients deal with emerging challenges, which require companies to transform.

What are the biggest industry trends/changes you expect in 2024?

In addition to the challenges already mentioned, I would focus on three points:

Firstly, technological changes, and in particular the developments in AI, which are radically transforming professional services.

I should also mention the global tax environment, where we are today witnessing sweeping changes at a pace we have rarely seen in the past, requiring an effective response from companies’ tax and finance functions.

Finally, especially after the achievement of investment grade, we believe that investors’ expectations for transparency and disclosure, including non-financial reporting, will increase.

Combined with a stricter regulatory environment and increased scrutiny of business activities in Cyprus, I believe this will lead to renewed demand for high quality assurance services.

The problem of attracting and retaining talent

What are the most important problems that are plaguing your sector today and the solution of which is considered by you to be a priority in view of the new year?

Our main challenge today is attracting and retaining talent with the appropriate skills. The skills’ shortages are intensified by the fact that employees are seeking, along with better pay, greater flexibility, better career advancement opportunities and a greater emphasis on their wellbeing.

At EY, we are dealing with these challenges through a human-centered strategy, creating an environment which allows employees to grow professionally while also securing a work-life balance.

Attracting FDI and transformation projects

If you could ask the Government to take specific measures or formulate policies to support/strengthen your sector, what would they be?

As part of our mission to build a better working world, and of course a better Cyprus, we seek to support the country by offering expertise and solutions to a breadth of matters.

To mention a few examples, EY has been active in making recommendations for attracting foreign direct investment to the country, and to build the capabilities requires to execute transformational projects, especially in the area of digitalisation of government operations and citizen services.

Amongst others, we have supported the Ministries of Education, Foreign Affairs and Energy, Commerce and Industry, as well as the Deputy Ministry of Research, Innovation and Digital Policy.

The government has shown its appetite for transformation, and it must persist with its policies aimed at achieving sustainability targets, as well as supporting the digital transformation of the economy, including the digitalisation of the public sector.

Upskilling of its workforce, especially in emerging technologies, and streamlining of its procurement processes, to ensure faster and more efficient execution of transformational projects, are key enablers to achieving the envisioned transformation of the public sector.

We are already making progress as a country in these fronts, but we need to step up our efforts, leveraging also the opportunities arising from the National Recovery and Resilience Plan.

Our ambitions for EY Cyprus

What are your organisation's plans for 2024?

Our ambition is to remain the fastest growing professional services provider in Cyprus. I am confident we will continue to grow, as we have done in recent years, by supporting the transformation of the Cypriot economy and businesses.

At EY, we consider transformation as a holistic exercise focusing on three pillars:

Placing humans at the centre of their organisation, leveraging technology in an orderly fashion, and innovating at a wide range of operations.

Accordingly, our services are focused on these fields, along with helping companies navigate their green transition, while, at the same time, strengthening transparency and building trust among their ecosystem.

Adopting artificial intelligence

The technology factor, such as artificial intelligence, what role does it play and what changes is it expected to bring about in your field?

Artificial intelligence is reshaping the professional services sector, offering solutions that enhance efficiency, accuracy, and innovation.

However, the adoption of AI is more than just a technological challenge.

It is essentially a technological development that requires responsible planning, both to convert its enormous potential into economic value for the organisations and to address any ethical and safety issues arising from its adoption.

At EY we are at the forefront of these developments and have been working on AI capabilities for a decade. We have formed alliances with some of the world’s most innovative organisations, and worked closely with clients to identify how to capture the transformative power of AI.

We recently launched EY.ai, a unifying platform that brings together human capabilities and artificial intelligence, following an investment of $1.4b.

I believe that a human-centered approach to AI will empower EY people, enhance the quality of client work and ultimately change our working world for the better.

(Source: InBusinessNews)