Sridhar Kanthadai, Head of Treasury Services for Asia Pacific at J.P. Morgan, provides an update on the business and what clients in the region are prioritising.
How’s the business doing and what are your priorities in the region?
We are having a great year in terms of business momentum; revenue is up strongly year to date driven by increased business flows and as a result we continue to gain market share, particularly in the corporate franchise.
Our priorities in the near term include expanding business in our chosen targeted segments and markets, which would be the top-tier multinationals from Europe and the US doing business in Asia, as well as Asia’s emerging large local corporations. We see huge potential in e-commerce as more corporates migrate their commerce activities onto electronic platforms. J.P. Morgan has been investing in and building out an e-commerce gateway to facilitate the ease and experience of online transactions.
We also see opportunities in the non-bank financial institutional space, and we believe our cross-border expertise, leadership in US dollar clearing and advisory-led approach to solutions can bring value to businesses in these sectors.
What is J.P. Morgan investing in?
We continue to invest in two key areas. The first is in technology as we look to support clients in their digitalisation journey. This involves not just developing innovative solutions for treasury but also offering bespoke advice and tailored solutions for clients. We recognise that many corporates are still in the early stages of leveraging emerging technologies to improve their business processes, and we spend a lot of time during our engagements with clients to demystify innovation and walk them through what digitalisation really means for them.
Growing our bench strength is also a priority for us and we are focused on investing in high-quality talent across not just front office roles but also in adjacent functions like controls, operations and technology. We are on track to increase headcount by 15% this year across Asia Pacific with equally strong recruitment plans for 2019.
What are some of the new innovations that have made a difference to clients in the region?
We remain focused on helping clients solve their problems and that’s how we are prioritising innovation in this region.
A key challenge facing treasurers is managing the huge volume of documentary requirements involved in cross-border payments and collections across most of the 14 Asian markets we operate in. Our virtual branch solution that digitises the documentation process has successfully resolved the issue; instead of having to dispatch reams of physical paper to us, clients can send us the documents in digital format which is more efficient and eliminates risk of misplaced documents. The solution is live in India, China, Indonesia and Thailand and we are planning to launch in the Philippines, Malaysia and Vietnam next.
Another innovation that’s originated from Asia is our data visualisation tool, where clients have a bird’s eye view of their transaction flows and can develop strategies as necessary to improve the management of cash and liquidity. With this capability, we have been able to help clients shut down or move accounts because of idle or ineffective use of balances, and instead putting in a structure that allows them to fund accounts just in time for payments. These are all material benefits.
What should clients be thinking about now as they plan for the future?
A priority practically all our clients talk about is the need to reinforce their organisations against cyber threats. A recent poll we conducted among our top clients consisting of CFOs and senior treasurers across Asia Pacific show two-thirds of them rank cyber-security as one of their top three risks but only 30% have high confidence in their ability to detect and respond to cyber risk.
At J.P. Morgan, we have a comprehensive fraud detection programme we run with clients underpinned by sophisticated technology involving data and machine learning. Effectively, every transaction processed globally goes through a multi-point check that validates the consistency of that payment with what we expect, and we have been able to help clients prevent fraudulent payments even before they leave the bank.
Another area treasurers are looking into is how to better manage liquidity. As we emerge from a low interest-rate environment, funding is going to become more expensive so optimising cash to maximise liquidity will be increasingly top of mind. Again harnessing the technologies available today, we have been able to help clients build better liquidity structures and benchmark their current set of operations to uncover areas where they can improve their working capital. There is a great depth of advisory and consulting we can offer around this.