Grab has been a key catalyst to the digital transformation which has been changing the way we travel and commute, consume, transport goods and services and the way we transact in Southeast Asia. It has contributed an estimated US$8.5bn to this high-growth region in the 12 months leading up to March 2020, as reported in the latest Grab Social Impact Report.
As the leading online-to-offline (O2O) mobile platform provider, Grab’s business straddles three core pillars; ride-hailing and deliveries, fintech and marketplace. It operates in a highly regulated sector, adding to the complexities of operating in a very fragmented region. Grab’s extensive Southeast Asian footprint also presents challenges in managing cash and treasury, ranging from cross border payments, foreign exchange transactions and yield optimisation, to financing and bank account management, across the different markets whilst conforming to different local regulations and constraints.
A black swan moment
The onset of the COVID-19 pandemic proved to be a black swan event, which disrupted pre-COVID ways of working. Wilson Koh, Group Treasurer comments, “Our immediate priority was on the safety and well-being of the team, our colleagues and partners we work with. This included strictly executing business continuity planning (BCP) procedures, providing the right tools and technology for prolonged working-from-home and creating new standard operating procedures (SOPs) with our banking partners across the region, to ensure liquidity continued to flow to support our operations, drivers and merchant partners.”
The work-from-home arrangements and circuit breaker measures, both at Grab and its bank partners, provided further impetus to drive Grab’s corporate treasury team to think creatively of ways to ensure business continuity and operational efficiency amidst the ongoing challenges. Additionally, the global impact of the pandemic had far-reaching effects not just across Grab’s markets but across its businesses as well.
Unlike large corporates operating in traditional sectors, Grab’s focus and position in the new economy makes it imperative to deploy forward-looking solutions, addressing requirements not only within the B2B space but across C2B and B2C flows. It had to take into account multiple ecosystem partners and stakeholders across drivers, merchants, consumers, as well as its own employees.
The treasury team worked closely with the company’s businesses and its banks to address the following objectives:
Driver partners – ensure timely earnings cash-out to the drivers’ respective bank accounts 24/7 to allow drivers to access their earnings and facilitate prompt rental payments for the use of their vehicles. The solution provides instant settlement of driver cash-out requests via API connectivity with UOB. Direct settlement of Grab fleet rental payments through driver wallets, delivered a cost-effective and more efficient collection process for both Grab and its drivers.
Merchants/SME partners – enable daily settlement to merchants to allow them to receive payments from sales generated via GrabFood deliveries or via GrabPay point-of-sale or online payments, which reciprocate with the ability to promptly make Grab loan repayments. Grab has also helped merchants accelerate their path towards an O2O strategy through innovative solutions, such as payment links and web building tools. Instant settlement of merchant cash-out requests enabling straight through processing and prompt payments are achieved via UOB’s API services. A virtual account solution simplifies reconciliation and eases the tracking of multiple receipts and loan repayments from these SMEs.
Consumers – enable a seamless and cost-effective user experience to create consumer loyalty, driving GrabPay wallet usage ‘stickiness’ and user retention by deploying low-cost digital payments, top-up solutions and availing online payment options for goods and services. This is achieved with the PayNow QR as an alternative to GrabPay wallet top-up option in addition to the more traditional methods via debit and credit cards, targeting a wider consumer base beyond debit/credit card users to enable topping up through instant PayNow transfers from bank accounts.
Ongoing deployment of auto-top solution via UOB’s instant direct debit authorisation services to be enabled in app, allowing consumers to authorise direct debits seamlessly and instantly through their GrabPay and UOB Mighty apps, a first of its kind for GrabPay in Singapore.
GrabInvest Users – offer access to affordable financial products and services to help users in their financial planning and bring them closer to their objective of achieving the financial stability they need well into their retirement. The new micro-investment solution made accessible through the GrabPay wallet, allows users to invest as little as SG$1 into liquid low-risk fixed-income funds managed by Fullerton Fund Management and UOB Asset Management. This innovative solution offers more investment choices for investors and Grab is working closely with UOB and other banking partners/fund managers to provide investment solutions that are most relevant to customers’ needs.
Grab’s treasury worked with UOB to set up the necessary Client Monies Account (CMA) to ensure client’s funds are segregated to comply with local regulatory requirements.
Employees – provide a quick and easy way to open a personal bank account, especially for foreign employees who needed to set up quickly to receive their salary. UOB Workplace Banking for the company’s employees helped to allow seamless in-app opening of accounts.
The treasury team has successfully brought together a holistic platform, combining the best of both worlds; treasury best practices to deploy seamless payments via increased automation, adopt optimal liquidity solutions amidst a highly fragmented and regulated operating region with yield enhancement tools, ensure robust FX risk management with greater pricing transparency and drive innovation with the rollout of digital solutions, leveraging API technologies and the emergence of real-time payments across its key markets.
Working with its strategic banking partners across the region, the team successfully deployed multi-pronged solutions in its key markets, particularly in Singapore, where Grab is headquartered and obviously a key market. These solutions straddle traditional and digital banking services, delivering an enhanced experience across the company’s key ecosystem partners and stakeholders, as well as achieving treasury’s objectives.
Beyond digital banking services
Grab treasury also embarked on other key initiatives to further enhance its FX, cash and liquidity management, and fleet financing including:
Efficient FX management – using UOB and FXall.
Seamless payments processing – leveraging SWIFT FileAct and ISO 20022 XML and in Singapore, the Kyriba (TMS) integration with UOB enhanced efficiency and scalability, providing a model for other countries.
Single online portal for consolidated visibility and control.
Automated cash pooling with group available balance functionality.
Yield optimisation – from time deposits and money market deposits to structured FX swap-linked deposits/fixed income funds to tailor-made solutions such as discretionary portfolio management via UOB Asset Management.
Rental fleet financing – an alternative and ready funding source to support drivers in generating income through the Grab platform without necessarily owning a car.
The treasury team continues to explore banking services that will seek to deliver synergies and efficiencies to its day-to-day operations and taps into both wholesale banking as well as retail banking solutions to achieve this.
“We are a small centralised team of six, yet we have big ambitions to be a data-driven, technology-enabled and solutions-driven team to drive shareholder value. Working with partners like UOB that can complement with the right tools, technology and techniques has definitely made the journey more meaningful,” concludes Wilson Koh, Group Treasurer.
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