41 (136) 2019
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Editorial Note

Editorial Note

by Michael Dembinski, chief advisor and Dorota Kierbiedź, membership director, BPCC
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Welcome to the latest issue of Contact Magazine Online – this time, we focus on the financial services sector and finance in its broadest sense, in the way it affects the Polish economy.

There’s so much to read – from the impact of FinTech, to the global trend to outsource (from which Poland benefits massively) and the role of finance in driving global trade in an increasingly uncertain world. A sector massively affected by constant regulatory change, financial services businesses are subject to new requirements and obligations, often onerous. Five articles set out those changes that will have the most impact on financial services and their clients. And tax – again, the regulator is working to make the system more leak-proof, not always with the intended result. A further five articles look at tax changes and what they mean to businesses in Poland.

We begin as always with the interviews that set out the big picture. Adam Uszpolewicz, chief executive of Aviva Poland talks to Contact about the financial prospects for the year ahead – globally, across Europe and in Poland; we also discuss how IT is affecting the insurance sector.

IT and finance is the main topic of our interview with Piotr Ciski, managing director of Sage Polska. The British accounting-software giant is big on the Polish market; Mr Ciski looks at three existential challenges facing Polish SMEs, and the role of accounting-software firms in the rush to digitise tax.

FinTech’s role in disrupting the financial services sector is analysed further by Aleksandra Bańkowska, and Anna Maj from PwC, on the basis of its Global FinTech Report. To what extent has the sector has embraced the disruption that FinTech start-ups have brought on? How are firms dealing with the skills shortages?

Mergers and acquisitions are the bread and butter of many businesses, either financing or advising or conducting due diligence. How will the dawning of blockchain technology change the way firms are bought, sold or merged? Nicolas Klukowski from Mazars in Poland considers the benefits it will confer.

Keeping the wheels of finance turning over smoothly

Financial-sector back-office operations outsourced to Poland are becoming increasingly sophisticated. Credit Suisse employ hundreds of quantitive strategists in Warsaw and Wrocław. The teams keep growing and tackling new challenges, says the bank’s Adam Lodygowski.

What are the main trends in outsourcing? Dagmara Witt-Kuczyńska from TMF Group notes four – legislative changes, globalisation, automation and the increasing scale of outsourced processes. Driving all of these is the need of the client to focus on its core business.

Another financial-sector giant that has set up IT development activities in Poland is FTSE 100-listed Hargreaves Lansdowne, whose HL Tech operation in Warsaw is described by Michał Głowiński, its general manager.

This trend towards outsourcing or moving sophisticated financial-services operations to Poland is resulting in a huge demand for quality office space, say Maciej Ozdoba and Maksymilian Sobczak from Nuvalu Polska. So where are the new hot-spots for investors?

As increasing numbers of financial-sector businesses locate operations to Poland, there is an ever-growing need for professional training to ensure the right numbers of qualified people for jobs in areas such as accountancy. Kaplan, the world’s largest training provider in this area, has entered the Polish market to ensure that the BPO/SSC sector has access to sufficient numbers of skilled people.

In an employee’s labour market, employers in sectors with high staff turnover need to focus on retention. Building a strong employer brand is but one dimension to this, but just as we rate our taxi rides, restaurants or hotels, our employees are rating us. What should employers do to get a five-star rating? Łukasz Chodkowski of Dehora considers the key factors.

Financing trade in a risky world

When it comes to the biggest risks facing business owners, Poland stands out markedly from entrepreneurs in other countries, according to Aon’s 2019 risk survey. For Poles, half of the Top Ten risks turn out to be financial in nature, says Mariusz Pepłoński from Aon Polska. What are the others?

Bibby Financial has also been surveying the SME sector internationally to find out what worries business owners. Here, political risks, rising costs and red tape are identified as the issues that keep entrepreneurs awake at night. But overall, they are getting used to trading in a climate of ever-increasing uncertainty, says Jerzy Dąbrowski, CEO, Bibby Financial Services Poland.

Rising trade tensions are threatening global growth in the near future, say Piotr Stolarczyk and Andrzej Latoszek from Bank Pekao SA. Strong trade finance is the answer, they say; especially important for exporters looking to break into more exotic markets.

Brexit is a worry for any Polish firm exporting to the UK. Trade finance is a big part of Santander’s offering to business, and, as Tomasz Bieliński, who manages the Poland-UK corridor at Santander Bank Polska SA says, the bank is adapting to change. A blockchain-based real-time money-transfer facility between our two countries is part of the solution.

Legal challenges affecting finance

Not paying your suppliers on time if you are a big business can lead to big fines and even prison. New laws favouring SMEs come into force; be aware of the consequences of sitting on your invoices too long, says Bernadeta Kasztelan-Świetlik, from law firm Gessel and Partners.

Cloud computing is becoming the new reality for financial institutions. The law is slowly catching up with the cloud - Dr Agnieszka Serzysko, from law firm Kochański & Partners unveils a joint initiative by the banks, the regulator and the tech sector to create a legal framework for cloud-based financial services.

What is sustainable finance? The EU is keen to channel investment flows into projects that help (or at least don’t harm) the environment. Agnieszka Skorupińska and Patrycja Białko from law firm CMS Poland take a look at proposals from Brussels that will steer financiers towards greener investing. The new regulations may affect the financial market and companies looking for financing from the middle of next year. Will they affect your business?

Do you have a mortgage in Swiss francs? Has your financial institution lent mortgage loans denominated in Swiss francs? What does last month’s ECJ ruling mean for you? Daniel Smarduch, Łukasz Szegda and Sylwia Boguska from law firm Wardyński & Partners consider the implications.

Are you a co-signatory to a corporate bank account making online transactions? Marta Stanisławska, and Filip Windak, from law firm Bird & Bird brave the regulatory tsunami affecting the financial services sector to discuss the implications of the new Payment Services Directive.

Taxation issues

Polish businesses - fancy paying 5% corporate income tax? If you’re earning money from patented technology, it’s possible. Although there are many strings attached, for tech firms (especially in IT), the new Polish IP Box tax solution is a financially attractive incentive, say KR Group’s Michał Zdyb, Adam Apel and Aleksandra Piasna.

The concept of an exit tax is potentially troublesome for businesses spanning Poland and the UK, needing to move capital from one country to another. However, as Agnieszka Moryc, CEO of Admiral Tax writes, the way the EU Directive has been implemented into Polish law has been described by Poland’s financial media as ‘a legal dud’ – too many ways around it have been left open.

Moving money across borders also attracts the attention of anti-money-laundering enforcement. The latest EU Directive in this area imposes new responsibilities on banks. Konrad Kąkol of Dauman Bros. writes about the standards of financial security that need to be observed, and when they need to be heightened.

The very phrase ‘tax schemes’ sounds dodgy. But as Agata Nieżychowska from Crowe Poland explains, most are not set up with the aim of creating a tax advantage. But some are! What do financial institutions – and their employees – need to be aware of in terms of their new responsibilities under the new EU Directive on cross-border tax arrangements?

Debt financing and the Anti-Tax Avoidance Directive in Poland, by Accreo. The Supreme Administrative Court says one thing, Poland’s tax authorities another. The difference in the rulings can be significant. Who’s right?

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