IN a crisis, cash is king. In a pandemic, cash is the vaccine that injects confidence among investors, and what keeps companies going when lockdowns mean topline revenue takes more than a tumble. CFOs and treasurers that obsessively finetuned their working capital previously are likely to be breathing a sigh of relief.
In addition, CFOs and treasurers that stepped up their digitization are also likely to be much better placed to overcome the disruption in the usual business channels while maintaining operational efficiency in the wake of the virus outbreak. Digitization allows automation, reduces paperwork, and enables transmission of documents via secure connectivity.
The good news is that banks have stepped up their own digitization transformation. From large to local institutions, leveraging technology and rolling out APIs (application programming interfaces) to improve processes for payments and collections have become prevalent, and that is contributing to improved cash visibility and enhanced working capital efficiency.
In China, the need is for liquidity management. Companies have successfully implemented domestic and cross-border cash pools contributing to better utilization of their surplus cash. In this period of Covid-19, it is not a nice-to-have; it is mission-critical. In Taiwan, it is about reconfiguration of the supply chain out of China, requiring support from partner-banks; in Hong Kong, companies are starting to seek opportunities in the Greater Bay Area in what looks set to be the future for many businesses; in Korea, as companies become global, it is driving efficiency of treasury beyond Asia with an emphasis on visibility across multi-banks.
As the treasury needs become more sophisticated in North Asia the competition has intensified. This year’s Asset Benchmark Research (ABR) Treasury Review, which underpins the annual Triple A Awards, mirrors the trends that have been accelerating over the past few years. Banks unable to keep up are falling dramatically in the quality survey ranking, which represents the views of over 700 CFOs and treasurers. Banks that have restructured – and are hungry – are gaining market share at their expense.
HSBC sweeps the honours as the best bank in treasury and cash management, and the best bank in working capital and trade finance in North Asia. One of the solutions that best illustrates the bank’s capability was enabling the treasury team of TCL Corporation of China, one the world’s largest TV manufacturers, to operationalize effective liquidity management across the globe. It established renminbi and foreign currency cross-border pools to connect treasury centres in Hong Kong and China, enabling cross-border fund liquidity and, therefore, achieving greater efficiency.
In its largest market of Hong Kong, HSBC scored big as it is selected as best transaction bank, best cash management bank and best trade finance bank, as well as best bank for liquidity management and for large local corporates. It helped Hongkong and Shanghai Hotels in its treasury transformation journey, implementing a notional cash pooling structure involving five countries to concentrate all non-trapped cash back to Hong Kong to improve cash liquidity control for the group. It implemented a solution for Li & Fung that linked two multi-currency pools in Hong Kong and Singapore, enabling the company to achieve greater operational efficiency and cash visibility.
The bank is at the forefront of innovative trade finance client solutions, executing the first large ticket eMarketpace merchant finance solution for cross-border B2C finance for Unispeed Development. It provided a HK$40 million (US$5.16 million) asset-based lending solution to the company using external big data available on Alibaba’s ecosystem.
Bank of China (BoC) wins best transaction bank in China, breaking China Merchants Bank’s winning streak since 2016. As the most international Chinese bank, BoC won a number of high profile Chinese MNC mandates in 2019. Leveraging on its leading blockchain, big data and artificial intelligence technology capability, it established an iGTB (intelligent global transaction banking) platform for its transaction banking clients. BoC also ranks top in The Asset Client Satisfactory Index in China, conducted by ABR.
Meanwhile, Bank of Communications earns the accolade as the best cash management bank in China for the sixth year in a row on the back of its continuing leadership and commitment to assisting clients in managing their working capital requirements to ensure sufficient liquidity. The bank, among other things, implemented a payment and collection solution for China’s intellectual property buyers and sellers in the State Intellectual Property Operations Public Service platform.
In South Korea, BNP Paribas is a big winner, sweeping top honours for best transaction bank, best cash management bank and best supply chain finance bank, as well as best bank for MNCs and LLCs. The bank implemented various solutions for its clients, including facilitating reconciliation of receivables and optimizing working capital by accelerating conversion of receivables into cash, while obtaining an off-balance sheet treatment of the receivables.
MUFG Bank is named best transaction bank in Japan, highlighting the business as a core area for the bank. It placed great emphasis on digitalization, one of the key initiatives under the bank’s re-imagining strategy designed to serve its clients more efficiently through automating internal processes.
In Taiwan, the local banks dominate the competition among the service providers, with CTBC Bank winning best transaction bank, best trade finance bank, and best supply chain finance bank. DBS is the only foreign bank in the winning circle after being recognized as the best bank for MNCs.
For the complete list of North Asia winners, please click here.
To learn more about these awards, please click here.
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