As the board of editors concluded the review of over 300 solutions on treasury, trade, supply chain and risk management submitted by service providers during this year’s awards process, and spoke with CFOs and treasurers about the initiatives that were completed during the past 12 months, one theme was clear: the future is 3D – digital, demographic and data.
From China’s NUCC (NetsUnion Clearing Corporation) to India’s UPI (United Payments Interface) and digital instant payment infrastructure in between (PayNow, Faster Payments Service, PromptPay, and so on), governments in Asia are taking the lead in changing the payments landscape. This far-reaching process is stimulating the conversation CFOs and treasurers have with their service providers, and how best to build on these new payments platforms to improve the treasury function.
For instance, over the review period The Asset was presented with several cases where companies were able to improve their payment and collections by leveraging digital instant payment infrastructure bestowed via their service providers. In Singapore, airline company Scoot partnered with UOB, allowing customers to pay via PayNow. In Hong Kong, AIA, like Scoot, took the initiative and joined forces with HSBC to create a channel for premium collections through the Faster Payments Service.
These were just some of the exciting payments and collections solutions presented to The Asset’s board of editors during the review period. To view the best payments and collections solutions across the region please click here.
Digital technology, which fosters real-time payments, has also prompted CFOs and treasurers to seek better methods to improve their risk management in areas such as currency or counterparty risk. Companies such as Unilever in Pakistan adopted a progressive attitude, working with their banking partner Standard Chartered to hedge their renminbi exposure. To view similar noteworthy solutions in hedging and risk management please click here.
Outside of payments/collections, digital has been a noteworthy topic in structured trade finance, where processes have remained relatively unchanged for some decades. For example, Cargill, along with BNP Paribas, was successful in allowing a letter of credit to be issued on a blockchain, significantly reducing the typical processing time for a transaction. This is just one of several solutions selected as the best structured trade finance solutions by The Asset. Please click here to view the list.
As the spending power of the next generation drives future consumption patterns, companies are finding ways to market themselves directly. CFOs and treasurers are enticed by the possibility that retooling their approach could prove to be sound business practice, driving not just efficiency but also topline growth. In highly-competitive industry sectors, tackling the future through e-commerce or via the new economy is widely viewed as the way forward.
From Sri Lanka to Hong Kong, companies see demographic trends indicating an ever-growing youthful population and seek to expand their transactional capabilities and team up with appropriate partners for the task.
For example, in India, payment service provider Flywire partnered with Deutsche Bank to allow students in that country to make cross-border payments with ease, which was especially noteworthy in a market typically known for tight currency controls. Other companies such as e-commerce players like Shopee and Bukalapak worked in tandem with their various banking partners to facilitate a better customer purchasing experience.
To view the list of new economy solution winners please click here.
Being able to keep up to date with the changing demographic landscape requires a constant eye on current cash positions and understanding payment flows to be able to adapt quickly to various scenarios. As such, liquidity management was a key goal (as ever) for many CFOs and treasurers over the review period covered by The Asset. This was certainly the case for Qualcomm in China, which worked with Bank of America Merrill Lynch to form its cash pool and daily zero-balance sweeping solution in China.
In addition to Qualcomm, there were a number of impactful liquidity and investment solutions throughout the region worthy of mention. They can be found by clicking here.
With the prevalence of cloud, artificial intelligence and less painful integration via open APIs, CFOs and treasurers are beginning to see how the future treasury function can become an enabler to drive better conversations with top management. It is no longer just a case of how to improve working capital. With data analytics combined with elements of machine learning, the treasury of tomorrow is about improving returns, reducing costs and mitigating risks.
The shipping industry in particular requires a large use of logistics data. In Singapore, PSA International, a global port group, has developed a global common trade and supply chain platform called CALISTA. DBS enabled supply chain orchestration and facilitated trade by helping shippers to better manage the physical movement of goods, trade financing and compliance.
Users of the platform are able to reuse information they put on CALISTA (such as bill of lading, commercial invoice, purchase order) across shipment, custom declarations, trade financing and payments/collections, complete all necessary trade settlement activities and communicate with the relevant trade parties. This is just one example of the exciting trade finance solutions in the market today.
To see the list of winning trade finance solutions please click here.
In China, where supply chain finance is taking off, the use of transaction data also enabled banks to better determine the credit of suppliers. Philips (China) Investment, the supply chain management entity of Philips in China, provides transaction flow data - such as procurement, inventory and sales - of its SME suppliers to China Guangfa Bank and this information helps determine the credit limit for each supplier.
Via this supply chain finance programme, SME suppliers were not required to pledge assets with the bank and were able to obtain online supplier finance at a lower financing rate within seconds without manual approval.
View the winning supply chain finance solutions by clicking here.