In 2022, we made progress towards what we call our North Star objective: to carry out a fully digital audit. We started our introduction of KPMG Clara (new window) – our new smart, audit platform, which will enhance quality, create meaningful insights for clients and make the experience more efficient for employees. KPMG Clara (new window) will be used in all audits from 2022/2023. At the same time, we have embedded data analytics in our processes and pushed ahead with pilot projects on the concept of a continuous audit. As part of this, we are working with academics to increase use of AI in substantive testing procedures.
Among Advisory clients, we saw continued demand for our digital services in 2022 through our Connected (new window), Powered (new window), Trusted (new window) program. Revenue from our technology practice has increased by more than 16% over the past two years. Across sectors, clients are digitizing their processes and workflows, particularly in financial services, consumer & retail, TMT and IG&H – all priority sectors for KPMG N.V. At the same time, digital technologies are enabling our Advisory business to improve customer journeys, identify areas of need for skills development and support increased cross-selling. We are also working to expand use of Sofy (new window), our digital risk software that underwent a major upgrade in 2021, and started to offer clients ‘Analytics as a Service (new window)’, with our Data & Analytics (new window) department working closely with engagement teams.
Part of our technology roadmap is building a truly digital workplace. We want our staff to be able to work anywhere, at any time, safely and effectively – an objective that has become more important with the switch to ‘hybrid’ working following the Covid-19 pandemic.
Over the past year, we have made important progress in several areas: we have completed our Cloud migration, and established a Digital Excellence Hub to coordinate our programs and initiatives. We also introduced new programs, including Enterprise Service Management, a workflow system that went live in July. In September, we brought in remote working from abroad.
Next year, work will begin on a KPMG N.V. cross-functional data strategy. To support our digital workplace objective, we are also offering more training and education to employees, and creating a new career framework for technology services staff. Read our People (new window) chapter for more details on how we are working to develop new data and digital skills within KPMG N.V.
It is important that we also strengthen our cyber defenses to protect our data and IT infrastructure, given the recent increase in cyberattacks across the economy. During 2022, we kicked off our Shield initiative, which will address key areas of risk and raise the overall maturity of our cyber defenses. We also conducted a simulation of a ransomware attack and updated our crisis management procedure. We have managed now to significantly reduce our average response time to cyber incidents.
Working with other KPMG member firms allows us to share development costs - KPMG Clara (new window), for example, is a global project. We also work on digital & innovation with KPMG’s Global Risk department and Global Innovators’ Network. In 2021/2022, our investments in digital & innovation totaled EUR 14 million, down slightly from EUR 15 million the year before.
Over the past three years, we have invested more than EUR 47 million in innovation. Fast innovation is one of our three Trust & Growth cultural attributes. We have created innovation communities in each of our three main businesses: Assurance (new window), Advisory (new window) and Business Services. In 2021/2022, we also introduced new ideation software, available to all employees and ready for use by clients. Through Innoway, our innovation platform, we now have a pipeline of 130 projects. Going into 2023, we will focus on implementation – bringing new, innovative ideas in Assurance, Advisory and Business Services into practice. Innoway enables employees to share and assess new ideas, and win support for them – we are also continuing with our Trust By Design approach, which incorporates controls and security as ideas develop, reducing lead-times by an estimated 20%.
- 1Substantive testing is an audit procedure that is used in examining a company’s financial statements and supporting documentation to determine if they contain errors.
- 2Figure for 2020/2021 excludes impaired assets.