PwC’s approach to audit keeps clients informed and prepared
According to the Boston Consulting Group, KBC Group - the result of a merger between two Belgian banks and an insurance company in 1998 - is among the world’s best performing financial institutions. To retain this accolade, it needs to be sure that there are "no surprises" in its accounts and it relies on its auditor to make that happen.
In 2015, it selected PwC to take on that role and act as "the canary in the coalmine, giving us proactive advice on what’s happening. Next to controlling our books, PwC gives us insight into what's happening in the outside world, what's happening within the European Central Bank (ECB), etc. They've always been very proactive in this, thinking together with us. For me that’s a huge added value," enthuses Johan Thijs, CEO, KBC Group.
Johan Thijs was named Trends Manager of the year for 2018, an award that he says is in reality for all the bank-insurer’s employees. "The prize was given to KBC and by coincidence I’m the CEO. It actually recognises the 42,000 people who work extremely hard every day to accomplish what we have over the last years," Johan Thijs says.
That accomplishment includes recovering well from the 2007 - 2008 economic crisis and getting back on track to serve customers in long-term relationships and fulfil their needs with financial products, the firm’s overall core mission.
"Zero surprises, they’ve always been proactive in this approach, they’re always thinking together with us and for me this is a huge added value."
And it’s not just staff that the Group calls on to serve customers, but other external parties too. Johan Thijs says, "An individual’s always less important than a group. As an individual, I can do certain things, but I can do nothing without the help of a lot of people."
And he goes on, "We live in a very complex world, the financial industry undergoing big changes, everyone’s calling it disruption, and in these circumstances we have to deliver good results and services to our customers. In this context, you need the help of a lot of people, not just internal people, but also external people, and for that reason I always consider relationships with external parties as fundamental to adding value and working together towards the same goal. Amongst others, PwC plays that role perfectly, helping us make the next step in a very difficult and complicated world."
As to why it selected PwC for the audit mandate, Johan Thijs explains, "KBC's a complex group, we're driven by local embeddedness, so local entities have an important role. But at the end of the day, the Group’s in control and you therefore have to take into account that decisions taken at local level should be weighted appropriately to the level of the Group, meaning our headquarters in Belgium. PwC's perfectly able to do that. They take into account the very specific environment of our firm."
KBC Group has also been impressed by our competencies and skills, especially our "very strong knowledge of IFRS (International Financial Reporting Standards). They not only have theoretical knowledge, but also extremely good pragmatic knowledge," Johan Thijs enthuses. And he adds, "they came with the right level of seniority of the team. When you wrap up the whole package, it was a very well balanced package. It’s for the same reasons we recently gave the go ahead to remain with PwC for the coming three years."
With regards to the relationship with its auditor, Johan Thijs says, "I think our relationship with PwC is a very sound one. It takes into account our role and the role of the auditor and it’s done in a respectful manner. That means not wasting time debating nitty gritty stuff, but looking at the bigger picture." He also enjoys the open communication between the two parties which he believes has been "crucial to establish the relationship we currently have. One that has evolved over time."
He concludes, "If we continue to work as we’ve been over the last couple of years and continue to further grow the relationship, I think there’ll be a great future between KBC and PwC working together. Obviously within the limitations imposed upon us by supervisors and regulators."