The treasury function in Asia-Pacific is being transformed.
As interest rates rise, banks in the Asia-Pacific region are turning to technology to optimize liquidity. “There is a growing recognition and acceptance that cash management is an increasingly critical aspect to keeping a company financially viable,” states Raof Latiff, head of digital for DBS Bank’s Institutional Banking Group.
Digital transformation solutions help corporates advance their cash and treasury management ambitions and achieve greater working-capital efficiency and cash flow predictability. “We see opportunities in developing innovative solutions in the payment and collection space to facilitate instant business-to-business, business-to-consumer and consumer-to-business transfers within countries and across borders, supported by technologies such as Application Programming Interfaces (APIs), the Internet of Things and blockchain,” states Latiff.
Latiff says there is a surge in interest from corporates seeking to integrate instant e-payment and collection solutions into their businesses to enhance their working capital, while providing greater convenience to their customers. Instant-payment schemes are popping up all over the region and include South Korea’s Interbank Home/Firm Banking Network (Hofinet), China’s Internet Banking Payment System, India’s Immediate Payment Service, Singapore’s Fast and Secure Transfers and Australia’s New Payments Platform.
“On cross-border instant payments, we expect continued traction in this space with support from regulators,” says Latiff. Notably, to encourage innovation, central banks in Asia have rolled out initiatives related to open banking, paving the way for fintechs to leverage account and transactional data from banks to extend their offerings to banking customers. The Monetary Authority of Singapore encourages financial institutions to adopt open APIs and the Hong Kong Monetary Authority published an Open API Framework for local banks in July last year.
“APIs and instant-payment rails,” says Latiff, “not only enhance a company’s cash flow position, but also tangibly transform their service model by providing greater convenience to customers.”
Last year, Jurong Port (JP) in Singapore leveraged DBS Bank’s API solution, Ideal Rapid, so port workers could be paid instantly and electronically without cash needing to be kept on-site. Once an online payment is approved by JP, a real-time payment message with the port worker’s bank account details is sent via Ideal Rapid. The solution has delivered savings on transportation fees, removed concerns about security and safety, decreased insurance fees for the safekeeping of funds on JP’s premises, improved employee satisfaction and provided a more efficient payments process by crediting wages directly to a port worker’s bank account.
Competition is also heating up in the region among locations for treasury Shared Service Centers (SSCs). Although Hong Kong and Singapore remain the two most popular locations in Asia for SSCs, other countries such as Malaysia, Thailand, Shanghai and the Philippines are offering attractive incentives to stake a claim for competitive treasury and shared services.
|Best Overall Bank for Cash Management||DBS Bank|
|Best Bank for Liquidity Management||HSBC|
|Best Bank for Payments and Collections||DBS Bank|
|Best Provider of Short-Term Investments/Money Market Funds||J.P. Morgan Asset Management|