To maintain and improve the level of services that our clients have come to expect, we need to double our efforts to attract, motivate and retain professionals with the skills required in the new digital environment, says EY Cyprus Country Managing Partner Stavros Pantzaris.
What key areas of opportunity or growth do you see in your sector, and what are your expectations for Cyprus in 2019?
Prospects for the professional services sector in Cyprus in 2019 remain good as the economy is stabilising and international business entities continue seeking professional advice to establish real substance in Cyprus. At the same time, corporations are facing new challenges which make professional services more relevant then ever: the disruptive forces released by new technologies and the digital revolution are drastically changing business models, while the regulatory environment is becoming stricter as societies expect greater transparency. Corporations are increasingly turning to professional services providers to address these challenges, to effectively deal with digitalisation and meet increasing demands for compliance. In this context, our role in strengthening confidence and trust in Cypriot corporations and the economy in general is crucial.
Increased activity in oil & gas exploration within the country’s EEZ is expected to dominate economic developments in Cyprus this year. We also expect the tourism, real estate, shipping/maritime and the higher education industries to drive growth in our sector. Our attention will also focus on the banking sector, which is steadily recovering from the crisis, but still needs to address the issue of non-performing loans, whose level remains among the highest in the EU. At the same time, Cypriot banks will also need to deal with the challenges of fintech to meet rapidly changing customer expectations and face increased demands for transparency from EU institutions.
Against this background and as the economy opens up, the biggest challenge currently faced by professional firms is the war for talent. To maintain and improve the level of services that our clients have come to expect, we need to double our efforts to attract, motivate and retain professionals with the skills required in the new digital environment.
One can also be optimistic about the Cypriot economy in general. Although some structural problems remain, we have emerged from the financial crisis stronger, wiser and confident that we will not repeat mistakes of the past. The economy is growing at a healthy rate, primarily thanks to an increase in tourism and private consumption. The banking sector is also gradually recovering, with increased profit margins and improved capital adequacy, despite the persistent NPL issue. Finally, our balance of trade is also improving, driven by a substantial increase in exports.
There remain of course global challenges: the rise of protectionism, the imminent slowdown of the European economy and geopolitical instability in our neighbourhood may all have an adverse effect on our economy. Last but not least, the prospect of a no-deal Brexit remains a major concern. Given the close ties between the two countries, a post-Brexit UK could present both challenges and opportunities for Cyprus.