Asia’s diverse economies: directions for the next decade
The diversity of Asia’s economies is myriad, defying simple definitions as countries across the APAC region move up and down the gears of growth, with surges in sectors and markets, and dips due to factors including trade wars, economic cycles, political events, and most recently, public health concerns that have disrupted business continuity and supply chains. At the centre sits China, where slowdown in GDP growth has been dramatic in recent years, whilst smaller economies such as Vietnam is rising. So what are the predictions for Asia in the next 10 years? Is the Asia Century economic narrative stalling, or will the region become resurgent as trade deals finally materialise and markets mature? For corporate treasurers, both in MNC APAC and regional companies, what indicators are flashing on the corporate dashboard that will impact operations in the year ahead?
Treasury technology transformation: AI, RPAs, and data analytics!
For international companies, APAC represents a center of regional excellence, where the very latest technological trends in treasury are developed in tandem with multinational banking partners, a host of best-in-class fintech players, and a professional team dedicated to the delivery of global standards in core treasury functions and activities. The integration of cutting edge AI and RPA processes is a near nirvana for the brave and best treasury leaders. Yet digitizing a tailored treasury solution takes time, tenacity and patience. First, you need to build good infrastructure via ERP, TMS and/or other solutions that help enhance functionality and efficiency to manage cash, investments and FX exposures. Next on the roadmap is the implementation of AI, cloud computing, RPAs and fintech add-ons that will strengthen the system with hyper-efficient solutions. In this case study, we hear from Logitech on the decisions they took in their digital transformation journey and the resulting insights that have enabled treasury to take a seat at the business strategy table.
Asia’s payments promise
Asia is a payment pioneer. Alipay came first, 10 years before Apple. Bitcoin originated in Japan. China’s central bank is leading the region with digital currency testing. GrabPay is new on the block in Singapore. For the treasury, the promise of a real time multi-currency ‘faster’ payment infrastructure in Asia is tantalisingly close. Whilst the proliferation of payment solutions present greater choice and convenience for suppliers and customers, the plethora of protocols requires orchestration in the treasury. SWIFT is now weighing in with GPI roll-out, targeting mandatory adoption of the new standard by 2020, with features including ‘incoming funds notifications’. For international treasury, new payment technologies are under constant evaluation as to their potential benefits. Regionally, the picture is more patchy. So how are Asia treasurers developing payment infrastructure across the region, and internationally? What is the treasury technology fix that makes it all simpler for all? Here we hear from treasurers who pull payment levers daily.
Case study: The new Asian treasury
Asian treasuries are rapidly evolving. The new breed of treasurers are smart tech savvy finance professionals, embracing the new and casting off the old. But that picture is not universal; in the past, local companies were perhaps cautious adopters of new treasury management systems and many companies are still to embark on their digital transformation. Yet for the the early technology adopters, developing systems to keep pace in an ever digitising world of payments, virtual accounts, fx and cash management and process automation, the advantages to treasury are clear, not least greater internal controls of capital and cash. Now, TMS is being revolutionised by a new crop of fintech plug and play solutions for every treasury function, with APIs spinning ever more efficient process engineering in the business. In this session we hear from a treasurer who has implemented new systems and solutions locally, and evaluates the benefits accrued to treasury operations in the region.
Cash management and forecasting: Plugging in the power tools
The ongoing low global interest rate environment has intensified the focus on liquidity management and the need to put cash on deposit to work in search of greater yield. At the same time, the low cost of borrowing eases the urgency to free up locked cash pools in the business. Yet for sophisticated multi-national and multi-currency treasury operations at scale, the deployment of liquidity management strategies to release cash, get capital invested and earning is core to successful treasury management. The arrival of big data analytics, and artificial intelligence, promises to analyse cash flow data across the business and suppliers, to forecast cash conversion cycles, when monies will be received and available to deploy as working capital or invest in money market funds. Scanning the available cash pools in the business across multiple accounts, and automatically releasing and deploying capital is all in a nanosecond’s work for today’s treasury robots. In this session, we hear from treasurers that have mastered the newest cash management power tools and have cut out great internal treasury structures with them. Critically, we will focus on both international and regional treasury applications and the resources required to plug and play with cash technologies.
Regulation and risk: neo banks, AML, KYC, and anti-fraud
The enlargement of the banking sector in Singapore and the Philippines, with new digital banking licences, promises to engender greater competition whilst injecting further liquidity in regional bank markets. The neo bank winners however will face the reality of regulatory regimes across Asia that presents compliance challenges in local markets. Whilst these new entrants are unlikely to move the needle now for corporate treasurers, they do signal future trends in how banking gets done. On the treasurers regulatory risks dashboard, AML and KYC compliance flash across transactions in Asia. One of the many challenges to conducting KYC in Asia is the regional variation for cross border compliance, which adds a layer of complexity in managing relationships, and conduct of business requires regulatory navigation of regional anomalies. In this session we run through regulatory risk headwinds for Asia treasury.
FX: Dollars, RMB, Yen and local currency settlements
Asia deals in dollars, for international transactions, mostly, for now. While RMB internationalisation and convertibility as a reserve currency, presents a regional alternative, RMB offshore transactions lag behind dollar trades in Asian markets outside China. And whilst the Japanese yen remains weak, the dollar dominates. Currently, cross border, intra-Asian FX markets are complex; multiple currencies and settlements across ASEAN and the wider Asia region make FX hedging essential. And whilst currencies such as the Thai baht and Indonesian rupiah strengthen in domestic markets, against the long shadow of the Asain currency crisis, G3 currencies reign for international trade. So how are treasurers navigating the FX markets in the region now? Are money markets yielding returns? Is dynamic FX hedging helping? Are swap rates creating value? In this session we hear the FX strategies treasurers are adopting as they manage the volatility of multi-currency transactions across the region.
Supply chain finance: sustainability and ESG in Asia
Asia lies at the heart of many global supply chains, from high tech production to traditional textile manufacturing. Recent black swan events and public health emergencies have disrupted supply chains and closed factories, creating a crisis in business continuity in some sectors. Beyond this immediate issue, supply chains are evolving. The rise of corporate governance standards, encapsulated in stronger ESG principles, are driving innovation in supply chain financing, where suppliers are incentivised and rewarded for meeting environmental and governance standards of multinational companies. But whilst the proliferation of green financing in bonds and loans expands globally, supply chain financing is also now facing accounting questions in the off balance sheet treatment of reverse factoring. In response to commentary from ratings agencies and regulators, and in the spirit of good governance and transparency, some companies are choosing to place their factoring programmes on balance sheet. So how is supply chain financing playing out in Asia? Are we seeing the greening of financing initiatives and increasing standards in line with international best practice. Local treasurers tell the tale.
Fintech Disruptors Showcase
Singapore is the fintech capital of Asia. In a city where taxi companies look like banks and banks look like wristwatches, you would be forgiven for thinking that you are living in a parallel dystopian universe or a slightly bewildering utopia, depending on your point of view. Take Singtel and Grab’s dash for digital banking in Singapore. Look elsewhere and a kaleidoscope of fintech solutions dazzle across the financial ecosystem and treasury space. Partnerships with banks and collaboration with clients is key to surviving and thriving in this brave new world. In this showcase session, the diversity and colour of fintech species are on display and treasurers wonder at their delights. More importantly treasurers, evaluate the practical application of fintech solutions for day-to-day operations.