At the recent J.P. Morgan Asia Pacific Treasurers’ Forum in Tokyo, Treasury Today Asia sat down exclusively with Sridhar Kanthadai, Head of Treasury Services, Asia Pacific at J.P. Morgan to hear about his first six months in the role and the part data is playing in transforming how banks and corporates operate.
What have been your initial impressions since beginning your new role at J.P. Morgan?
It is an exciting time to be joining J.P. Morgan here in Asia Pacific. The firm has outlined its commitment to the region and we are investing heavily so that we can continue to deliver best in class solutions to a focused group of clients.
Our emphasis remains on those top-tier corporates from Europe and the US doing business in Asia, as well as Asia’s emerging multinational corporations. From a banker’s perspective, it is exciting working with these companies because they often have inherently complex operations across multiple markets. Our strengths around cross border, technology-led solutions, liquidity management and payment will help them become more efficient here in Asia and globally.
You have worked for some time across Asia Pacific, how has the treasury profession evolved and what role do treasury teams play in their organisations today?
When I first started working in this space, the trend was for multinational corporations from Europe and the US to replicate their successful treasury models in the Asia Pacific region. The primary job of the treasury teams here was to manage risk.
Post-crisis, there has been a lot of change in the way that treasury departments operate and their role within the organisation. As a result, treasurers here in the region are becoming more strategic, focused not just on managing risk but also bringing new ideas to the table that can help deliver better returns and allow the organisation to thrive.
This has been especially true in recent years, given the rise of eCommerce in the region. Nearly all companies are being impacted by this trend and it is often treasury teams stepping in and facilitating the organisation’s shift to online sales by putting in place the correct collections and reconciliation tools.
What are the big challenges that corporates in Asia Pacific are having to manage and what is the bank doing to help them overcome these challenges?
Regulatory changes always pose challenges to corporates here in the region. And for treasury teams the biggest issue is making sure they are compliant with the regulations whilst also ensuring the treasury is operating efficiently.
For the most part, regulatory change in the region is well documented, such as the implementation of GST in India. In these instances, corporates that have plenty of time to speak with their banking partners are better prepared for the changes. The sudden changes that happen overnight, however, like the revision of FX rules in Malaysia, pose more of a challenge. These require treasurers to be proactive in understanding what it means for their flows and what they need to do moving forward. Banks can add a lot of value here by being strategic advisors.
Tied to shifting regulatory change is the drive for efficiency in treasury departments. The new role that treasurers are playing means that they are having to do a lot more day-to-day. However, they often have to do so without access to additional resources. It is therefore our role as a bank to enable our clients to drive this efficiency by providing them solutions so that they can become efficient in the most cost-effective way.
Data also has an important role to play. At J.P. Morgan, we help clients with an industry benchmarking exercise, which enables corporates to understand where they stand compared to their peers, where they need to go and, most importantly, what they need to do to get there.
How important is the use of big data and technology more broadly to your clients?
All corporates are interested in technology but they are at different points in their journey. For instance, established multinationals that have the necessary technology in place are now upgrading and future-proofing it. On the other hand, you also have emerging Asian clients who may not have much technology in place but are looking to invest. Regardless, all companies are embracing technology at some level.
In respect of big data, I believe that we have only seen the beginning of what is possible and the insights this technology can deliver. Its continued usage is certainly going to have significant impact on how corporations operate and create many new opportunities for them to become more efficient and profitable.
However, corporates will not be able to achieve this overnight. A big issue is that data is often stored in a way that cannot be readily analysed. There needs to be some work done to standardise the data and ensuring it is consistent before companies can begin analysing it in a truly meaningful way.
This will happen, but it will take time and investment. One way we are looking to support corporates with this is by leveraging APIs and exposing the data that we have with our clients so that they can easily access and begin to analyse this.
What should be on the treasury agenda for 2018?
Technology will continue to be a key focus for treasurers. Digitisation has become a bit of a buzzword but from our perspective, clients are asking about how to improve efficiencies around their communications with us as well as the accuracy around data exchange. J.P. Morgan’s virtual branch is a good example of how we are helping corporates in this digitisation journey.
As operational systems digitise, cyber threats and fraud remain critical risks for corporates. The reality is that the number of firms experiencing cyber-attacks is increasing and treasurers need to be looking for solutions to safeguard their firms. Investing in fraud protection is a key focus at the bank, not just in how we protect ourselves but also to create a safety net for our clients.
More broadly, treasurers need to continue adding value to their organisations by coming up with new ideas to help them grow the business. And it is our role as a bank and trusted partner to guide them on this journey, and a lot of our investments are to make it easier, safer and cheaper for customers to do business with us.