Ascending the mountain
Xu joined KPMG after getting his degree in International Economic Law and Accounting from Shanghai University of Finance and Economics. He also had a sojourn getting a master’s degree in Corporate Management in Beijing from Renmin University of China.
That aside, the qualified CGMA/CIMA management accountant is a Shanghai loyalist who lives in the 21st century city that has grown up around its ancient core as China’s economy has expanded. He uses its fantastic connectivity and future-proofed infrastructure to commute via China’s renowned fast trains back to his home in Hangzhou in little over an hour. There he likes to relax with his family after his busy workday in the centre of the city.
Outside of work, Xu loves hiking. “I go to the mountains to relax and enjoy myself. It’s also something I do with my colleagues at PingPong, which I joined in October 2020 as Group Vice President, responsible for the company’s finance function, treasury operations, and the management of domestic and overseas financial institution (FI) channels.”
PingPong is a PSP for merchants globally. It has 44 offices around the world, covering 50+ currencies with associated FX risk mitigation and other processing options via its bank partners, such as J.P. Morgan. It also has major in-house capabilities thanks to the proprietary software it develops.
“Four times a year, the executive team at PingPong gathers in the mountains outside Shanghai in the Chinese interior for our formal quarterly business reviews,” says Xu. “We then hold informal discussions about the future of the company and the industry. The mountains give us space to think clearly about the future. I’ve come to like them in my time off, in my personal life as well.”
Treasury career
Xu has already seen ‘the future’ become a reality of modern digitised business, although there is always another technological advance that can be incorporated to further enhance corporate treasuries and business.
“When I look back over my career over 20 years and more, it has followed an interesting path,” he says. “I worked for a number of large foreign multinational corporations (MNCs) initially after graduating from university and accountancy at KPMG. I went to work at Nokia China and Logitech in China for example – the latter being my first encounter with treasury as a function.”
Xu as a controller at Logitech China focused on expenses and financial planning and analysis (FP&A) before transitioning into an overall management role. This tasked him with treasury responsibilities like capital allocation, money movement to make payroll and cash management to optimise liquidity, as well as risk opportunity and mitigation tasks. As Xu explains, this was a much more dynamic role that was central to the business.
“Treasurers increasingly serve their firms as a business enabler as well, which I like, especially as AI-enhanced automation advances,” says Xu. “This trend is negating our traditional payment approval and prior manual procedures, but that’s OK. It frees treasurers up to do more interesting work.”
After working for Logitech China, Xu then spent over a decade working for domestic Chinese ‘new economy’ firms including iTutorGroup. “These were acting like early fintech firms at the time using financial technology and other new digital options to disrupt traditional ways of doing business,” he notes. “I enjoyed working in the new economy.”
Today, Xu reflects he has “gone full circle” as he is now once again working for an MNC – although he points out that PingPong has a strong focus on localization, and one that acts culturally like the start-up firm that it once was. While PingPong was already well advanced along its growth path when Xu joined the company in 2020, he says that scaling the business up has been a “fun challenge”.
The digital future
“Since the turn of the decade, AI is definitely having an impact,” continues Xu. “AI is empowering treasury management and will have a still bigger role in future. It can provide intelligent bank account management, for instance, and thereby help to rationalise the number of banks that treasuries use. This cuts costs.”
The company has already used J.P. Morgan’s Kinexys blockchain-based suite of payment and digital asset products to further explore how future transactions might look using the equally disruptive distributed ledger technology (DLT). Xu says that DLT is another tech that can shape the future.
The company is also using virtual accounts with J.P. Morgan to gain efficiencies on cross-border transactions and encourage more digitisation and abstraction. As Xu explains, “This is important in a smaller world where borders are shrinking as real-time data-centric capabilities enhance.
“However, as AI plugs into this increasingly digitised and data-centric world to improve the accuracy and analysis of the vast information flows available to it, the strategic role of the human becomes more important.”
In closing, Xu reflects that AI can automate and analyse things – but when it comes to yield and risk management, a human being is still better suited for seeing something out of the ordinary that doesn’t compute. “For spotting an unidentified opportunity or a black swan risk lurking in the background, experienced humans are pretty good,” he adds.
As such, Xu argues that soft skills, already crucial capabilities for a modern treasurer, will become more important in an increasingly AI-dominated and automated world. Speaking the language of business is still a human activity after all – for now.
