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The Future of Tax & Legal – Embracing Change with Confidence

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Tax and legal professionals today face increasing complexity, risk, and ambiguity as technology, regulatory and business transformation converge. It’s easy to feel overwhelmed by the change and the infinite number of strategic options. But embracing this change is manageable with the right tools and the right partner.

Deloitte is helping clients navigate this increasingly complex, digital world by leveraging the combined strength of our technology capabilities from our Consulting and Tax & Legal practices, and by placing a continued emphasis on technology investment and skills development to prepare talent to meet the evolving needs of the business.

Harnessing Technology to Adapt to Change

Businesses in all sectors and regions are experiencing the opportunities and challenges that come with the immense changes of the Fourth Industrial Revolution. Even the most traditional business areas, such as tax and legal, are not immune. Technologies are disrupting business as we know it and in response, global tax and legal systems must transform and adapt to keep pace with these new business concepts and models. And organizations need to invest in their tax and legal departments to ensure they can operate confidently and effectively while minimizing risk.

Tax departments are tasked with executing flawlessly at a fundamental level: Ensure compliance, know the regulations and their implications, be precise, account for all the data, stay ahead of risk, and predict outcomes. And they are asked to do it all in an environment of exponential increases in data, added responsibility within the business, and new mandates from regulators.

As a result, tax professionals are moving to automate and apply analytics to help account for more data and to achieve greater precision. Technologies such as robotic process automation (RPA), natural language processing (NLP) and artificial intelligence (AI) give tax professionals the ability to work with all the information available in massive data sets.

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To not only see what has happened, but to more confidently predict what will happen. To be insightful and focus on implications and outcomes rather than being consumed by ensuring the accuracy of the numbers and on-time filing. And to do all this while meeting the increased transparency demands of regulators – who themselves are likely to use robotics and AI to collect and analyze companies’ tax data.

Likewise, technology has become a critical tool to help legal departments support rapidly evolving demands from the business and manage regulatory change.

Using Deloitte Tax and Legal professionals as an example, when the European Union’s General Data Protection Regulation (“GDPR”) came into force in 2018 along with the UK Data Protection Act, Deloitte UK’s Tax group engaged Deloitte Legal to assess the scope, and remediate where necessary, approximately 45,000 engagement contracts.

In the past this would have required a very lengthy manual assessment which would have been inefficient and prone to error as contract negotiations are typically buried in emails and hard to track. Instead Deloitte exercised a combined approach using dTrax, a proprietary artificial intelligence-enabled contract lifecycle management technology, with the support of skilled Deloitte Legal resources to simplify, automate, and streamline the contracting process.

The tool allowed Deloitte Tax client relationship owners to provide details about their engagements, which were then assessed by dTrax to determine whether the corresponding engagement contract required remediation. Where remediation was required, dTrax automatically generated a letter varying the Data Protection clause, which was sent directly to the client.

If negotiation of the Data Protection clause wording was required, Deloitte Legal resources were able to negotiate by reference to playbooks built into dTrax. This approach drove consistency while keeping contract negotiations managed and recorded within a single platform.

By combining technology with skilled resources, Deloitte UK’s Tax team was able to alter the business model, allowing for up to a 50 percent reduction in the number of required legal resources, a 40 percent reduction in the delivery turnaround time per variation letter, and an up to 60 percent reduction in the overall costs. Ultimately, the team gained greater visibility and insights into their contract terms and conditions, which increased their overall compliance and reduced risk.

Fueling Talent with Technology

While digital transformation is a tech-enabled shift, it requires a collaborative effort to change mindsets and embrace and advance transformation. A successful digital transformation demands a cultural change with a focus on continuous learning and embedding technology into the way we work.

Tax professionals have traditionally been tied up with compliance and the technical side of tax. Yet in this digital age, a robot can now do the data checking and digital tools can classify line items. So, today’s, and tomorrow’s, tax professional needs to understand the processes behind tax, be able to code, interpret data and make decisions. They have the opportunity to provide far more valuable and strategic input to their organizations, but they must be more adaptable to work with technology to enhance and reinforce their advice.

From the legal perspective, lawyers will need to have a broader range of skills to be ready for the legal landscape of tomorrow. Tomorrow’s digital lawyers will need to think and operate in a different way and they will need significant management, business strategy, technology and consulting capabilities to be able to deliver real value to clients. Adoption of the right tools, such as AI and data analytics, will enable legal teams to maximize efficiencies across multiple functions, standardize and adopt best practices, and help gather insights to support better decision making for the business.

Inspiring Confidence Today and Into Tomorrow with Technology

Deloitte has invested heavily in technology and we are accelerating our efforts in order to help both our own professionals and clients stay ahead. With more than 200 technology solutions in place, including robotics, AI, and machine learning capabilities, Deloitte Tax & Legal is helping clients manage compliance, bridge gaps between countries’ accounting principles, and manage research and development incentives claims. As we navigate the Fourth Industrial Revolution, having a tech-savvy foundation in our people and our processes will help set ourselves and our clients up for success and ensure our ability to work confidently now and far into the future.

Based in London, Philip Mills is the Global Tax & Legal leader at Deloitte. Prior to this, he led the Global Business Tax practice for two years and the UK Business Tax practice for seven years, amongst other roles. Philip also leads the Global Tax & Legal Executive and is a member of the Global Executive Committee. He has a Physics Bachelor of Science degree from Liverpool University, is a member of the Institute of Chartered Accountants in England and Wales and is a member of the Institute of Tax.

For nearly 20 years, Philip focused on M&A tax, particularly on Private Equity, Real Estate and Hedge Funds. He has worked on some of the more significant, large and complex European transactions in recent years as well as supporting the Fund advisers. Most recently, he took on advisory roles to some of Deloitte’s largest multinational corporate clients.

Source: The Future of Tax & Legal – Embracing Change with Confidence

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Deloitte’s Global Millennial Survey: Exploring A “Generation Disrupted” [Infographic]

In business, disruption can promote innovation, growth, and agility. But, what impact is continuous change and instability having on people, especially younger generations? Deloitte’s 2019 Millennial Survey takes a look at the human side of disruption and its effects on millennials and Gen Zs. Learn more about the survey’s key findings in the infographic below. For more information and the full report, click here.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries bringing world-class capabilities, insights, and high-quality service to address clients’ most complex business challenges.

Source: Deloitte’s Global Millennial Survey: Exploring A “Generation Disrupted” [Infographic]

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Despite current global economic growth, expansion and opportunity, millennials and Generation Z are expressing uneasiness and pessimism—about their careers, their lives and the world around them, according to Deloitte’s eighth annual Millennial Survey. In the past two years especially, we’ve seen steep declines in respondents’ views on the economy, their countries’ social/political situations, and institutions like government, the media and business. Organizations that can make the future brighter for millennials and Gen Zs stand to have the brightest futures themselves. Learn more: https://deloi.tt/2Jt17HF

Connectivity, The C-Suite, And The Consumer: An Evolving Cyber Landscape

There is widespread consensus that Industry 4.0 technologies have the power to create radically exciting efficiencies and growth opportunities for businesses. However, the advancement of technology is not without consequence. According to Cybercrime Magazine, the annual cost of cybercrime damages is expected to hit USD $6 trillion by 2021 globally. Advances in technology are driving progress, but also bringing new possibilities of cyber threat. And, both executives and consumers are taking notice.

A recent Deloitte survey found that executives rank cybersecurity and other technology-related risks among the greatest challenges to their growth outlook. Furthermore, the 2019 Deloitte Global Millennial Survey found that an overwhelming majority of respondents are concerned about privacy and cyber issues.

However, evidence shows that although executives are aware of consumer fears, they are unclear in how to respond.[1]

As organizations double down on connected devices and data analytics, they must look beyond strictly business outcomes and assess how to take advantage of new digital opportunities while managing vulnerabilities and protecting consumer privacy.

Against this backdrop, executives must reimagine their approach to cyber. This requires leadership to redefine the role of cyber risk management while also recognizing and addressing the concerns of both internal and external stakeholders.

Rethinking the cyber ecosystem

Executives have traditionally viewed cyber as a means to protect information, and thus, control has been relegated to the IT function. However, this model is no longer sufficient in Industry 4.0 as connected products and technologies have multiplied vulnerabilities across the organizational and consumer spheres. In this era of complexity, cyber is everywhere.

Although cyber is increasingly viewed as a C-suite issue, oftentimes individuals at the board and leadership level are far removed from the day-to-day challenges of keeping an organization secure, vigilant and resilient. To be successful moving forward, leadership must be an active participant in understanding how to respond to the constantly evolving cyberthreat landscape.

Everyone within an organization holds some level of responsibility for managing cyber, starting with board and C-suite leadership. To prevent breaches and enable growth, organizations must empower leaders across functions to build cyber into their purview.

High maturity organizations prepared to address cyber employ teams of passionate and energized staff across the business who are up to date on the latest threats and have aligned their cyber strategy and overall cyber program. This makes cultivating, attracting and retaining cyber talent a critical part of the solution to tackle cyber challenges. Organizations must prioritize learning across the enterprise to allow them to effectively manage cyber and implement comprehensive cyber solutions across all levels.

The consumer challenge

According to the 2019 Deloitte Global Millennial Survey, 78 percent of respondents are worried about how organizations share personal data with each other, and a quarter of millennials have ended consumer relationships because of companies’ inability to protect data.

Furthermore, only 14 percent of millennials strongly agree that the benefits of technology outweigh the risks associated with sharing personal data, and 79 percent are concerned they will be victims of online fraud.

This presents a significant warning sign to organizations—failing to put data protection and potential vulnerabilities at the top of the corporate agenda could not only hurt the business itself, but significantly erode trust with consumers.

Heightened vulnerabilities in the consumer space underscore the importance for organizations to build cyber into their strategies from product development to customer support. When looking at the entire cyber ecosystem and considering roles and responsibilities throughout an organization, businesses that view consumer insights and concerns as motivation to refocus cyber efforts will gain a competitive edge.

How organizations can respond

Cyber truly is everywhere, and is something that must be taken into account as organizations evaluate and formulate their business strategies.

As businesses work to reposition cyber from a threat to a growth opportunity, inter-organizational collaboration is key. Spearheaded by the board and C-suite, organizations must prioritize working together throughout the organization to address these concerns. With connectivity comes responsibility and establishing trust amongst all key stakeholders, including third parties and consumers, will enable organizations to capture value from cyber and take full advantage of the technological opportunities presented by Industry 4.0.

[1] Deloitte research report, “Global growth in the era of Industry 4.0,” Deloitte, May 2019.

Nick Galletto is the Deloitte Global Cyber Risk leader based in Toronto. Nick has over 30 years of experience in information technology, networking, systems management and information security management. He has accumulated extensive experience in the management, design, development and implementation of cyber risk management programs.

Nick has worked with executive leaders in helping them understand and implement cyber risk strategies as a business enabler. He’s helped many organizations mature their overall security posture; including architecting, designing and integrating cyber solutions to address specific industry cyber risks. Nick has worked with a number of large enterprises across many industries, helping them transform their cyber strategy as they’ve moved from an era of compliance and risk to this new era of cyber everywhere.

Over the last several years Nick’s primary focus has been helping clients with the development and implementation of cyber risk management solutions both for IT and OT, making their organizations cyber resilient by proactively protecting, detecting, responding and recovering from cyber events.

Nick has a Master of Business Administration, and he is a Certified Information Systems Security Professional, a Certified Information Security Manager, Certified in Risk and Information Systems Control and SABSA Certified Architect.

Source: Connectivity, The C-Suite, And The Consumer: An Evolving Cyber Landscape

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An expert in cybersecurity and network infrastructure, Nick Espinosa has consulted with clients ranging from small businesses up to the Fortune 100 level. Nick founded Windy City Networks, Inc in 1998 at age 19 and was acquired by BSSi2 LLC in 2013 where he is their CIO. In 2015 Security Fanatics, a Cybersecurity/Cyberwarfare outfit dedicated to designing custom Cyberdefense strategies for medium to enterprise corporations, was launched. A nationally recognized speaker, member of the Forbes Technology Council, regular columnist for Forbes, on the Board of Advisors for both Roosevelt University’s Center for Cyber and Information Security and Bits N’ Bytes Cybersecurity Education, award winning co-author of a bestselling book “Easy Prey”, and host of “The Deep Dive” radio show on 101.3FM WHIW, Nick is known as an industry thought leader and sought after for his advice on the future of technology and how it will impact every day businesses and consumers. An expert in cybersecurity and network infrastructure, Nick Espinosa has consulted with clients ranging from small businesses up to the Fortune 100 level. Nick founded Windy City Networks, Inc in 1998 at age 19 and was acquired by BSSi2 LLC in 2013 where he is their CIO. In 2015 Security Fanatics, a Cybersecurity/Cyberwarfare outfit dedicated to designing custom Cyberdefense strategies for medium to enterprise corporations, was launched. A nationally recognized speaker, member of the Forbes Technology Council, regular columnist for Forbes, on the Board of Advisors for both Roosevelt University’s Center for Cyber and Information Security and Bits N’ Bytes Cybersecurity Education, award winning co-author of a bestselling book “Easy Prey”, and host of “The Deep Dive” radio show on 101.3FM WHIW, Nick is known as an industry thought leader and sought after for his advice on the future of technology and how it will impact every day businesses and consumers. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedx

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