Axiata Group: Driving Digital Innovation with a Robust Risk Strategy

Guest: Mr. Abid Adam, Chief Risk and Compliance Officer, Axiata Group Berhad

Have you ever come across Teach Your Child How to Think by Edward de Bono or Mental Models by Peter Hollins? In this episode, Abid shares not only his favorite books but also his fascinating personal journey of moving to Malaysia and how he and his family have embraced the local culture.

As the Chief Risk and Compliance Officer at Axiata, Abid brings a distinctive viewpoint on fostering growth and innovation within highly regulated sectors. He discusses the key metrics he tracks, the difficult decisions he's faced, and the delicate balance between risk management and spearheading digital transformation in Axiata's operating markets.

Founded in 1992, Axiata Group Berhad, a leading digital and telecommunications company headquartered in Kuala Lumpur, operates across nine ASEAN and South Asian countries, serving over 162 million customers, with a market capitalization of approximately US$5.2billion (MYR 22.77 billion).

Transcript

AIBP: 0:00

Leadership is about facing the unknown. It's about making decisions when there's no certainty, and sometimes it's about taking a leap of faith even when the path isn't clear. In today's episode, we sit down with Abid Adam, chief risk officer from Axiata Group,

Abid Adam, Axiata Group: 0:18

what I was always curious is, can you lead in a completely unknown, unknown environment? And so from a professional standoff and personal standard point of view, I felt that I wanted to grow as a human being.

AIBP: 0:33

Leadership isn't just about growth, it's also about managing risk. Abid reminds us that with every decision, whether personal or professional, comes with three important questions

Abid Adam, Axiata Group: 0:44

So what's the upside? And that's quite easy when a business wants to grow, because there's an element of optimism bias. The second question that I always ask is, what's the downside? Lot of people will do risk analysis in of course, any transaction or investments that they want to undertake. But the third question that many people don't take time to deliberate and, more importantly, walk away from, is what's the downside we cannot live with?

AIBP: 1:11

With growth comes responsibility. Leaders today face the challenge of balancing innovation with ethics. A bit talks about the importance of doing business the right way, because real success is built on trust. I hope today's podcast leaves you with new perspectives on the choices we make, the risks we take and the paths we choose to lead. Welcome to the AIBP ASEAN B2B growth podcast.

AIBP Intro: 1:40

The AIBP ASEAN B2B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation.

Irza Suprapto: 2:03

Thank you everyone for joining us today. Today, we have actually a very interesting individual who is a guest on our podcast. I will leave him to introduce himself. But before we do that, you know, as you are probably aware, we have a lot of different episodes with different leaders in Southeast Asia who are driving growth within their organizations. What we found recently is actually an interesting point. There has been a lot of leaders who are actually starting to shift their careers into Southeast Asia who were not probably natively born and raised in this part of the world. And today's guest is an example of that. So I'll leave him to introduce himself, maybe just give a quick overview of who you are and how you came to we are recording this out of Malaysia. How you came to Malaysia, sure.

Abid Adam, Axiata Group: 2:48

So good morning and hello to all your listeners. My name is Abid Adam. I am Axiata Group's Chief Risk And Compliance Officer. It's a very interesting journey. I came to Malaysia about just over six and a half close to now, perhaps seven years my journey is quite interesting, because I started largely in financial services, leading large scale digital Cyber Security Risk Management transformation projects. About seven years ago, Axiata was transforming its capabilities and largely pivoting towards digital first, advancing Asia, not just Malaysia. I think that's the purpose still remains, and to become a next generation digital champion. At that part, the board sort of had reflections on things that they want to improve and enhance, capabilities so on. So the board was very visionary. Seven to eight years ago. They thought cybersecurity is going to be something very important in the future. And therefore I was the introduction to the organization to lead the cybersecurity program, the transformation program across Southeast Asia. So that's been sort of the genesis of my journey in Axiata. And of course, I've been with Axiata from the beginning till here, so very happy in terms of the progress that they have made. My personal Of course, transformation has also evolved. Where I started with leading the cybersecurity transformation initiatives, and then two or three years down the track. Data privacy came across as a very important topic support us to evolve on those sort of things. And I led that project. And then just before COVID, I took on the Enterprise Risk Management, and then also the broader compliance, ethics, integrity. So in Malaysia, example, with introduction of MACC section 17, a act that came along to ensure that Axiata was ready and its operating companies were ready to be compliant with the necessary requirements. But even more broadly, in terms of how we start looking at being more progressive, because it's an area that we believe we can truly contribute to. And now, if you look at it, is in. Relation to ESG, especially the s energy part, is heavily towards being a good corporate and, you know, leading by ensuring that the businesses we do and the customers we interact with, we do it with integrity. And so I think that's also a key essence. So I have a quite a broad portfolio in terms of what I do and what I looked at until, yeah,

Irza Suprapto: 5:21

thanks. I think a question that everybody wants to know, especially when we have on our guests, when we have guests on our podcast, is effectively, tell us a little bit about your career trajectory, because you didn't grow up in Malaysia. You grew up, I believe, in South Africa, that's right. Tell us a little bit and you came from a financial services background as well. Tell us a little bit about your career trajectory over the last, I would say, since you started into now,

Abid Adam, Axiata Group: 5:43

I think it's an interesting one. When I started, very early on, I always had this curious mindset. And back then, cybersecurity was not even in the picture when I started. In fact, when I used to tell people, I do cybersecurity, or back then it was called IT security. They used to ask me, what is that? But it so happened that as businesses evolved and started moving towards transforming their core products and services, providing it onto multiple omni channel capabilities, digitization, cloud, all of that has layered on top. So then cybersecurity became very, very important. And therefore, of course, my role, even in South Africa, evolved from purely providing technical capabilities and services to being a business leader, evolving towards more risk management side of things. And so I worked, even in banking, I had, I was fortunate enough to work across middle office, back office, supporting the front office, both on the investment banking side and also on the retail side. So I had a quite broad sort of exposure. And then I saw when I was in the banking, then I always had this need to learn further and on the business side. So then I started working for one of the largest insurance and wealth management and asset management companies. And so I had, like, this huge then background that's from retail investment, banking, insurance, asset management, Wealth Management. And what I found ironic is, when I was in the financial services. One of the things seven, eight years ago was telcos are eating our lunch, you know, they always felt that telco had the touch point with the customer telcos. So I was always curious in like, you know, so in it so happened next year that then on the journey, we sort of met up, and then it sort of became natural transition. Two things why I specifically selected to be with Axiata. One was my curiosity of this telco and why the business always felt in financial services, that telco is the future. A lot of the products and services will be delivered through telcos. And so I thought, Well, that seems like the natural next step from an industry perspective. The second was, I mean, I had some exposure to Asia markets, even Europe and so forth, but I didn't really lived and worked in Asia, so large part of because I've managed teams even in within Africa and multiple countries and so forth. But I was always curious is, can you lead in a completely unknown, unknown environment, and so from a professional standoff and personal standoff point of view, I felt that I wanted to grow as a human being. When this opportunity knocked on the door, I still remember very clearly, our head of HR said a bit, why don't you come over with your family to come and visit Malaysia, because prior to that, I know the country Malaysia, family has come for holiday, but I personally didn't come to Malaysia. I didn't even know what Malaysia look and this was 2016 2017 2017 and so the head of HR said, why don't you come over? Come with your family, spend a week, have a look at the country, and see what you know, what you what you feel, and you know if you enjoy it, then for sure, come join us. So I thought about it, and I remember having this conversation with my wife, and said to judge any country in five days or seven days, I think is really premature, because you will never get the true essence of what the country is. So like for the first six months, I always believed that whatever experiences you had, you should never judge any country after that. Of course, after one year, if you still have negative feelings about it, then you may want to reconsider your decision. So I actually remember calling up back and said, No, I don't need familiarization training. It. I just told my wife, let's back up everything and go in every house. Everybody thought that was crazy. Never seen a country, never visited the country. Doesn't even know what it looks like, and then you suddenly taking young kids, three young girls, so sending everybody to Malaysia. And I said, Yes, take a leap of faith. And so seven years down the line, I don't regret making a decision at all. It has been an incredible journey, both on a personal level and a professional level.

Irza Suprapto: 10:28

Fantastic. That's a fantastic story. So effectively, you're Malaysian now, right? You spent seven years, yeah, you understand the all the different foods you have at the Hawker center that you can and you are obviously, because you have, you've been in Malaysia. Malaysia obviously has the better food than Singapore. You're supposed to say that. You

Abid Adam, Axiata Group: 10:46

know, we've been fortunate, because Axiata has direct and indirect operations in many of Asia, Southeast Asia, primarily, but we have businesses that also operate in likes of Japan and so forth, or partnerships with large conglomerates on that side of the world. So I've been personally very fortunate to be exposed to many countries and cultures. And each country has this very unique way of doing things, both at a corporate level, personal level, the cultures, decision making and so forth. And of course, food is, I've picked up 15 kilos in seven years. You know, it's been two kilos, and now I'm trying to maintain that is definitely positives, and you have downsides

Irza Suprapto: 11:39

going back to that. You mentioned that the whole idea around decision making and how you decided that this is not something you can experience in five days or six days or even seven days, so it's a leap of faith. And I think that's the way a lot of companies, corporates in this part of the world, that's what they're struggling with today in highly regulated environments, or even you've been in banking and you're now you're in the telco space. These are two very regulated industries. When it comes to innovation and taking the leap of faith, culturally or even within specific industries, it makes it a little bit harder, right? What has been your experience, especially since you hold the title of chief risk officer in managing the risk aspects of growth or the risk aspects of trying something different?

Abid Adam, Axiata Group: 12:21

I feel that in anything in life, if you want to achieve, there will anything worthwhile achieving, anything in terms of a audacious goal you want to achieve, there will always be an element of risk, whether it's axiata or, like I said, I took a leap of faith in a personal journey too. As a chief risk officer, the way I kind of look at it is you go through a thought process. You go through very clearly, steps and approach where you identify what are the top risks that your organization will need to navigate through. Secondly, you sit down with the right management level and you ask three questions, because what mostly happens in many situational circumstances, especially with business leaders. If you look at Axiata's history, we have been growing through massive transformation across multiple asset portfolio, and we have done lot of mergers last 10 years, a lot of companies, big size, over billion dollars to smaller size. There's been scale of investments we have made across Asia and Southeast Asia, and there are always three questions that I personally ask, what's the upside? And that's quite easy when a business wants to grow, because there's an element of optimism bias. So there's nothing wrong with that. As an entrepreneur, you have to have a lot of optimism, otherwise you will not do anything. The second question that I always ask is, what's the downside? Now, lot of people will do risk analysis, in of course, any transaction or investments that they want to undertake, but the third question that many people don't take time to deliberate and, more importantly, walk away from is what's the downside we cannot live with? Because there's a big difference. And very few people that has an honest view of what's the downside they cannot live with. And those who actually take time to have that question answered and then stick to the decision. And sometimes it is very, very hard, because the upside at the moment in time feels overwhelmingly in the direction that you're going to hit, although the signal says that the downside you cannot live with the red line that you have drawn. It's crossing that. So I think the risk management is not really about tech. Equal say, I mean, that takes the other example we have defined for each of the risk categories, whether it's financial, whether it's ESG, whether it's cyber security, whether it's financial, certain things that a board feels it's our tolerance or risk appetite thresholds, and within that thresholds, upper bound or lower bound, we willing to operate. But you know, like example, on anti briberian corruption, we said we have zero tolerance for corrupt activities. So no matter how good the business opportunity is, if the business case dictates otherwise, we will not, we will not take that decision itself. So I think it's good that when any organization ventures out into unknown, is to know thyself. Is to know what is that downside that they cannot live with, and most importantly, is to then ensure that it's embedded in your decision making process throughout the life cycle itself, whether it's in a business planning, whether it's an acquisition, whether it's a new product or services, whether it's diversity, anything you do, it's about baking that into your Bau process. I think that if you can build that ethos, that framework, on risk management, decision making, I think it will help you navigate and of course, even with going through all of that, life is never a straight line trajectory. And so you one of the important things is, when you go through sort of a moment of lesson learn is, how do you reflect as an individual, as a company, and how do you then bake it back into your decision making process, because you're now become a little bit more wiser.

Irza Suprapto: 16:38

Yeah, I'd like to go a little bit deeper into that. So this whole idea around, you know, data is a new goal. I think we've seen this, especially with technology coming to the forefront and large enterprises, and you mentioned certain things that I'd like to expand on. So the red line, the thresholds, sure we have standard things that the company will look at. Fundamentally, it's baked into maybe the core culture or even the DNA of the firm. But you know the way things are moving. I'm sure there are certain data points or there are certain specific metrics or frameworks that you are keeping an eye on quite closely. Let's say it might be temporary for the next three months, for the next six months, over the last year or so. Can Can you maybe talk about which specific metrics or which specific benchmarks you've been watching that's been keeping you up at night. Well,

Abid Adam, Axiata Group: 17:21

I think again, as I say, we have at Axiata 13 risk categories. Those 13 risk categories, each one of them has a very specific metrics. Example on financial we would use debt to EBITDA because we want to given the macroeconomic developments, especially in some of the frontier and non frontier markets, we believe we will be more resilient if we de leverage our balance sheet. So debt to EBITDA, and there are certain thresholds that we have set up is a key metric that we'd look at on a financial side. Of course, there's other patami and so forth that we, you know, we communicate to the market and we keep very close eye on but then there are other metrics which are not as binary as maybe, what's your top line, bottom line, profitability and so forth. They are qualitative in nature, but still has a material impact on our organization, things like onslaught of new regulations. We keep very close on that. Things are geopolitical developments. We keep very close eye on that, because if you look at what just happened in Bangladesh, we have a large operations in Bangladesh, more than 50% of the world's population this year is going to go and vote, and therefore, you know the outcome of some of the selections directly impact us, because we're operating a lot of those markets in Asia itself. And of course, if you look at what most probably will transpire in US in November, we have to be ready for that too as an organization. So there are metrics that keeps us awake, which are not financial in nature, but we know it has a downstream impact to us. Should they materialize then, of course, well, I think like ESG, we have very specific metrics we keep track of because we have committed what our net zero targets are, what we want to achieve by 2030 what we achieve wanted by 2050 so for all scope one, scope two, scope three, on ESG to make sure that we deliver on that, because we don't want to, one of the things we keep real eye on is an execution risk. We certainly also don't want to be tainted for any green washing risk. So how do we ensure that we spend right time, or do we communicate to the markets the quality? And of course, the challenge you have is the varied maturity in different markets we operate. Bangladesh is not Sri Lanka. Sri Lanka is not Cambodia. Cambodia is not Malaysia. Malaysia is not Indonesia. And you know, so how do you ensure. Sure that there is element of harmonization in understanding what you want to communicate. Some of the standards are still evolving. Even from ESG, it's still very new. So making sure that we're comparing apples with apples, and when we're communicating to stakeholders, we are confident in our reporting. And so I think you know, each of cybersecurity, again, we, over 100 and 50 million customers depend on us and when you make a phone call or when you buy our digital products or services, whether it's in digital financial services like boost payment or now with the launch of the bank, you expect and demand of us that those transactions and that phone conversation is secure, that nobody is listening to it, it's not tampered with, and therefore we take that responsibility very seriously. So when it comes to things like cybersecurity, we have very specific metrics, things like mean time to detect because, again, in cybersecurity, we are of the view that no matter how much any company invests, you will get rich if it is the nation state actor after you. So then the question really is about, it's not a matter of if. It's the matter of when and when it happens to you, how quickly do you respond? And first of all, how quickly you have detected it, how quickly then you respond. And so the metrics like MTTD, which mean time to detect, and MTTR, mean time to respond, we keep very close eye on it. We keep close eye on things like patch cycle. How quickly can you patch some of the vulnerabilities that whether it's Microsoft or other products, when there's vulnerabilities on that, and we have that in our state, what's the remediation time frame on that? So I think on people, and people we talent is, whether it is on digital side or other queries like even ESG, there's a shortage of good talent, and therefore things like attrition rate, things like succession planning, things like ensuring that we have a clear understanding of our key core capabilities. We want to grow the people in so life of people, I think those are some of the metrics we look at in people side. So we have a very clear like 13 or 11 categories, and within 11 categories, we have sub categories and specific metrics, and report that and engage that occupational healthy, health and safety, is another and so lost time injury. FTIF, if is another metric, specific, if you're asking for metrics, what we look at and all this is then deliberated at the first of the management level, with the CEO and his direct reports, then with the board committee, and then directly to the board, the group board itself. And we do that both at the operating company level. So example, I'm a Axiata's nominee on all the nominee director in all the operating companies board, board committees. And then, of course, we report to the group level, also the group board of directors.

Irza Suprapto: 23:02

Sounds like a lot of things keep you up at night and drawing parallels to and this is something that's happened, right when you moved to Malaysia. I'd like to draw some personal parallels. Yeah, what was your red light? What was your red line for you and your family? Obviously, Malaysia has surpassed the expectation for you. You've been here seven years. But when you were making that decision in moving what was, was there threshold? Was there a red line, especially moving your family over?

Abid Adam, Axiata Group: 23:26

Yeah, I think it was largely a family decision, because personally, I have been fortunate enough to work in many different markets. I may have not lived in a country, but I've spent enough time so, you know, I worked in London. I've worked in a lot of African countries. I had the opportunity to be exposed to businesses in Asia. So for me, it was largely and had very young. My kids were very, very young when I moved to Malaysia, six years, five years and so forth. So it was largely going to be a family decision. If the family wasn't settled, then I think it would have been something that I would have to reconsider, because at the end of the day, I spend more than 70 80% of my time at work. I interact and of course, I've been blessed to being afforded an opportunity to take on projects that really excited me at a large scale. So a lot of things kept me busy, a lot of traveling and so forth. When I get home, I do have a family, and they have a very different outlook to what they were going to experience. So in short, I think, you know, work at Axiata was has been fantastic, but if I had to make a decision, it would have been just other kids settled and are they assimilating in the community that we live in, in the schools that we live in, and so forth. I think that's the key factor, because at the end of the day, you want to ensure that it's just not about you. Solve. But it's about, you know, in Africa, there is a very good word that we use called Ubuntu. Ubuntu, yeah, and it basically means I am, because we are. And so I think that even at work, I always have that philosophy, you know, where it's stronger together, because no person is able to achieve great thing on their own, exactly,

Irza Suprapto: 25:21

especially nowadays, it's a bit more impossible. Okay, I think we've taken quite a bit of your time, but I'd like to end this with a couple of quick fire questions, if you may. So there will be some questions I'll be asking, and you can just give me your thoughts immediately. So first question is, around we understand you like books quite a bit, books and audio books. So on a professional capacity, this is a two part question. Right? On a professional capacity, what book do you find yourself always reaching back to, you know, throughout your professional career, and the second question is, What's your most recent favorite read? Yeah,

Abid Adam, Axiata Group: 25:56

I always go back to Edward de Bono's books. The one I really like is teach your child how to think. It's got a lot of both how to make decisions, but also how you apply very systematic and structured manner in which you think about certain things. So I still have that on my desk. I mean, I've got a lot of books, but I always try to keep that way, and I go back to the process of decision making, and I have a very structured way. So I like Edward de Bono books. And then right now, I just went away here I was listening to also a book. It's called mental models. It's an audible. So whenever, most of the time, I use audible to digest books, some because I really don't get time to sit down and read read. So I try and consume a lot of the knowledge to Audible. And I like the mental model from Audible itself is because it also is very similar to Edward de Bono books. It's giving you different tools, like first order thinking, second order thinking, which is sometimes unintended consequences, although you made good decisions, or you said made good but you didn't think about the unintended consequences that comes with it, and they explain very meticulously how you should go about doing it. So I like it. I like I mean, I like reading books that always empowers you to become a better leader and a better person, largely non fiction books. I enjoy non fiction books itself.

Irza Suprapto: 27:21

Okay, fantastic. Any recent on the flip side, any recent fiction books that you like?

Abid Adam, Axiata Group: 27:26

Oh, I have never read fiction. Well, you don't like, I just haven't read. There's so many non fiction books I have to get through.

Irza Suprapto: 27:34

Yeah, again. Final question of today, you know, you've been in Malaysia for seven years, and you've come from a background where you grew up not within this part of the region, but on a professional and on a personal capacity. What are things you're most excited about in Malaysia, in the Southeast Asian region, because you have a lot of operating companies in this part of the world and globally as well, personally and professionally?

Abid Adam, Axiata Group: 27:59

Yeah, I think in a way, the Bucha ended sort of twine and linked is the mere opportunity on certain things like digital transformation, Malaysia and broadly Southeast Asia and Asia at large, is at the nascent stage, so there's a lot of room for growth, whether it's on a population adopting smarter technologies. I mean, if you look at just Malaysia, the amount of growth investment in data centers that has happened, and these are sort of catalysts for future change, because infrastructure has only been laid out. Yes, we are reaping the benefits of foreign direct investments coming through immediately. But certainly that, to me, is a myopic way of looking at it. It's like when industrial revolution started, when people started laying out the railway tracks, they didn't think of perhaps all the other benefits, side benefits that came with it. Initially, it was just transporting goods from point A to point B. But today it's movement, mobility and so many other benefits that have come through. So I kind of think that's the era in the digital space we're moving to, even Malaysia, in the markets we operate. So I'm really excited about that, because I think the field we are in, and the profession I personally am in, is an area that's constantly evolving, of course, with the advent of generative AI and investments in AI and the opportunity for both small businesses And individuals to have access to information and capabilities that previously a small shop around the corner, mouth parking when a company couldn't have even come today, can have the same infrastructure facilities where a large company would have to invest millions before you can build a data center and something of that sort. So your ability to scale up and scale down, your ability. Access a leading edge or cutting edge technologies, and in respect of all the part of the world you are staying in, I think, to me, is a very exciting opportunity. And I think if individuals and organizations and countries as oh captures that, I think they'll definitely right on the upside that the benefits that come to of course, there are downsides. On ethical side, safety side, security side, privacy side that we need to manage in Malaysia is trying to do that with recently enacted laws for new regulations on data privacy, on cyber security, and, of course, amendment on the data privacy to make sure that while we capture the upside. We don't, in a way, not think about some of the risks that comes with it. So I think it's a it's a balancing act that one needs to do. But I certainly think we in the right space.

Irza Suprapto: 30:50

So you think we are in the building phase, structurally, laying the groundwork for what will come? Yeah, so most of the benefits will be realized or executed, in some ways by the next generation, your three girls, for example, yeah,

Abid Adam, Axiata Group: 31:04

and that's true. And also the shift of heavily sort of, because every economy has to shift, and if they don't shift, then unfortunately, you will not. You know, the concept of Asian Tigers was because you captured that opportunity that came within that period of time. So if you want the phase two of that, which is largely now moving towards digitized economy, then you have to lay out that infrastructure. You have to build it. You have to be future fit. And I think Malaysia is trying to progress towards that, and hopefully we continue on that path. So therefore, in, you know, five years from now, My children, your children, and broader, sort of, the society itself will benefit from that.

Irza Suprapto: 31:51

Thank you. A bit. Last question, what's your favorite Malaysian food?

Abid Adam, Axiata Group: 31:55

Roti Canai. Roti Canai.

Irza Suprapto: 31:58

Great answer. I love it too. Again. Thank you very much. A bit for taking the time to speak with us today. A lot of interesting insights, and I'll be sure to check out. I'm actually a big fan of Edward De Bono, but I've not read teaching your kids how to teach.

Abid Adam, Axiata Group: 32:11

I always tell my kids to read too. It's really good book you should have because it basically has all the key tools that one needs to define goals, objectives. When you want to make decisions, they've got tools like PMI plus minus interesting that allows you to have that conversation. I use that quite even in like making a decision, where do you want to go on holiday? And you say you want to go in country A, and another kid wants to go in Country B, then I just do a PMI, okay, why country? What's the plus? What's the minus, or what's interesting points? We sit down, and then we compare this stuff. So it's trying to embed it to your day to day decision making. But it also it's around making sure that you're not thinking in a singular direction. You have multiple viewpoints coming in, and then you make a decision, mental elasticity, right?

Irza Suprapto: 33:02

Fantastic. Thank you very much again. Thank you. Thank you. Thank you very much. Applause.