Transformation at Transsion enables rapid expansion
Published: Feb 2025
Best Treasury Transformation Project
Highly Commended Winner
Transsion
Photo of Dou Zhenchuan, Transsion.
Xinyan Tan
Group Treasury Director
Established in 2006, Transsion is a high-tech company specialising in R&D, production, sales and service of mobile phone products. Transsion has become the largest mobile phone manufacturer by sales in Africa and its sales network has expanded to over 70 markets in Africa, the Middle East, South-East Asia, South Asia and Latin America.
The challenge
Transsion’s extensive presence and scale in emerging markets presents a unique set of challenges for its treasury management:
Inefficient settlement process – due to a completely manual process in supplier payment and sales proceeds collection cycles, especially in emerging markets, Transsion faced significant delays in settlements. The mounting workload eventually led to processing inefficiencies but also gave rise to operational errors, data discrepancies and inflated treasury team headcount costs.
Lack of visibility and control – with a decentralised treasury management structure, Transsion had to deal with limited visibility and control over funds and FX in its overseas subsidiaries. This lack of centralised oversight hindered effective decision-making and exposed the company to increased financial risks.
Inefficient liquidity management – idle funds were scattered across numerous accounts with minimal returns, leading to sub optimal liquidity management. The absence of a coordinated approach to mobilise and maximise surplus funds hindered the company’s ability to optimise cash flow and generate optimal returns.
The solution
Transsion initiated its transformation project in 2018, implementing a comprehensive solution based on global design principles. The company established a Global Treasury Centre which manages 219 accounts in 30 currencies. New transaction flows and system integrations with Citi, including those in six African countries, are currently underway.
Partnering with Citi, Transsion has harnessed a full suite of cash management products to revolutionise its treasury operations. This includes API connectivity, host-to-host (H2H) and robotic processing automation (RPA).
Transsion also uses virtual accounts for collections and has digitised its trade solution using the bank’s account receivable distribution finance (ARDF) e-platform.
“We have also implemented automated domestic and cross-border cash pools and to optimise global liquidity management and enhance yields on surplus funds, we implemented two layers of liquidity structures,” explains Xinyan Tan, Group Treasury Director.
Best practice and innovation
Transsion has showcased best practices and innovative approaches to address the challenges posed by its global expansion. The team exhibited outstanding treasury management by establishing a centralised and streamlined approach to manage settlements and liquidity across a diverse range of markets, spanning over 70 emerging economies. This strategic move ensured efficient cash management and minimised risks associated with manual processes and fragmented liquidity positions.
Moreover, Transsion’s commitment to digitalisation and transformation set the company apart as industry leaders. It took the initiative to be the first medium-sized enterprise to implement API with Citi in China, facilitating real-time payment and reconciliation processes.
Embracing RPA technology and digitalised financing platform for loan drawdowns further showcased its readiness to leverage cutting-edge technology to upscale treasury operations.
Furthermore, Transsion is the first company to be invited by China regulator State Administration of Foreign Exchange (SAFE) to pilot a multi-currency cross-border cash pool in Shenzhen and this has highlighted Transsion’s pioneering spirit in exploring innovative solutions to enhance liquidity management.
Transsion’s treasury excellence, best practices and innovative spirit have empowered the company to overcome challenges and fuel its growth as a dynamic player in the mobile phone industry.
Key benefits
Cost savings – global banking relationships reduced by one third and global bank accounts reduced by 55%.
Headcount savings.
Process efficiencies.
Increased automation.
Risk mitigated.
Improved visibility.
Errors reduced.
Number of banking partners/bank accounts reduced.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
“Our treasury operations have achieved unparalleled efficiency, allowing us to expand rapidly into new markets in Africa, the Middle East, South-East Asia, South Asia and Latin America. Our proactive and forward-thinking approach has not only transformed the company’s treasury operations but has also set a new standard for treasury management practices,” concludes Tan.
The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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