Amongst all participants, Flex is one of just a few companies which implemented almost the full scope of the programme, including payment/receiving on behalf of (POBO/ROBO), centralised FX deal management, a virtual sub-accounts structure, centralised foreign currency deposits, offshore foreign currency centralisation into China, and cross-border sweeping. Treasury worked with its banking partners to persuade the SAFE Guangdong branch office to grant it further preferential treatment so that it could set up an in-house banking structure for multiple Chinese legal entities – making it the most advanced structure in the China market and the only live case of an in-house banking structure in the country at the time of writing.

In order to centralise, standardise and professionalise its treasury activities, Flex took the further practical decision to establish its treasury back office in a Shared Service Centre (SSC). The scope of the back office function today covers FX deal confirmation and settlement, cash flow, e-banking, CDF (Customs Declaration Form) compliance for China, and documentation and reporting for Flex’s Chinese legal entities in ten cities. Given the level of control and oversight this set-up affords Flex, it has proven to be something of a treasury risk mitigation exercise too.

Asian treasury is not only about China of course: Vivian and her team reach across the region to make the necessary process improvements. Amongst such successes is the advanced multi-currency notional pool (MCNP) that was established in Hong Kong. This involved consolidation of surplus cash in local currencies in different countries, including JPY, SGD and HKD, automatically and without physical FX conversion. As part of the MCNP’s function, all surplus cash is swept out of Hong Kong to the US headquarters (in equivalent USD) at the end of the day from the header MCNP account (a process known to the team as ‘draining the pool’). Cash can be swept back to country operations in the respective currency by the end of the day to cover local payments during the day. By combining cross-border sweeping, intraday overdraft and end-of-day auto-sweeping processes, treasury effectively realised a cash centralisation model with minimal or zero impact on local operations – and at the lowest cost. The team has since become a pioneer of netting in Malaysia.

Best practice and innovation:

It would be entirely fair to state that Flex’s treasury is something of a pioneer in the market. It is ready to adopt the most up to date technology, treasury management concepts and best practices and take some of these ahead of the field. Complications can arise when applying cutting edge technologies and international best practices to tightly regulated environments such as China and Malaysia. This can be further complicated when viewed through the lens of Flex’s overall business needs. The level of sophistication of its Asian liquidity solutions demonstrates that Flex ATC, led by Vivian, does indeed have a deep understanding of local regulations, Flex’s own business needs and treasury management best practice. It is a position that is characterised by a strong spirit of innovation, driven by communication skills capable of motivating all parties to work hard together.

All the solutions developed by Peng and her team – whether done so specifically for the Chinese market or the wider Asian community – demonstrate that it is entirely possible, and indeed worthwhile, further exploring treasury best practice in a complex Asian environment.

Meanwhile, under Peng’s direction, treasury continues to focus on its pursuance of the best strategy and will keep optimising its own processes.

All the solutions developed by Vivian and her team – whether done so specifically for the Chinese market or the wider Asian community – demonstrate that it is entirely possible, and indeed worthwhile, further exploring treasury best practice in a complex Asian environment. Given that many of the difficulties addressed on this journey will be common to many companies, such endeavour can only serve to inspire other treasurers in Asia to strive for a better and more creative practice. Meanwhile, under Vivian’s direction, treasury continues to focus on its pursuance of the best strategy and will keep optimising its own processes.

The team is clearly endowed with strong members who are highly motivated under the current leadership. All seem to possess a team spirit that sees them willing to accept challenges and none are afraid of the hard work that pushing boundaries often requires. Vivian says younger recruits tend to grow up fast, learn quickly and enjoy their undoubted achievements.

The next steps for Flex ATC will see it aiming to retain its status as the ‘Best in Class’ treasury team in Asia. The ambitious plan has a number of elements set to establish it with the most advanced treasury management structure, including continuous engagement with process and system improvements, close work with the most reliable banking partners, strict internal and external compliance, development of its expertise in local regulatory matters, further improving liquidity, and minimising the risk. With a team that refuses to stand still, Flex treasury is without doubt at the top of its game.

As Vivian Peng explains, “Key to the success is my team, their hard work, their ability to work as a team and also their willingness to learn. In addition, we have strong support from our management and our culture allows the team to innovate in a complex environment. That same culture fosters a great team spirit – One Flex/One Team – which enables us to execute the strategy.”