Liquidity risk management continues to be a top priority for treasurers. Improving cash flow forecasting capabilities remains important and willingness to outsource operational treasury activities is increasing.
In terms of technology, treasurers are still identifying use cases for generative AI, while treasury technology continues to be centred on a small number of global vendors.
These are the key findings from the 2024 Deloitte global treasury survey published last month. But given almost two-thirds of the respondents have operations in Asia Pacific, we asked François-Dominique Doll, Deloitte global treasury advisory Southeast Asia leader to outline the key issues facing corporate treasurers in the region.
“In addition to challenges like gaining visibility into global operations, cash flow and financial risks, treasurers in APAC place significant emphasis on issues such as FX volatility,” he says. “This is due to the region’s diverse environment, where factors like supply chain disruptions and inflation have prompted a re-evaluation of treasury policies and hedging strategies.”
Another key concern is the need for enhanced digital capabilities. While treasury technology adoption is on the rise in Asia as companies adopt cloud technology and API connectivity, many companies in the region still rely on spreadsheets – leading to issues with data consistency, consolidation and time spent on manual tasks.
According to Doll, Asian corporates are increasingly adopting centralised treasury models. “Many have shifted to in-house banking structures, tapping into internal cash reserves rather than external funding sources,” he says. “Consequently, staying informed about regulations regarding cross-border cash flows and reviewing transfer pricing rules has become critical.”
Companies with surplus liquidity are exploring alternative investment options and diversifying their placement instruments to mitigate the impact of varying interest rate policies.
Automation extends from bank statement integration – offering real-time visibility – to the integration of cash flow forecasts for liquidity planning and automatic posting of general ledger entries for treasury transactions.
“The next wave of automation, as highlighted in recent surveys, involves generative AI,” suggests Doll. “Though still in the pilot phase, this technology is expected to enhance cash flow forecasting by analysing historical data trends and external factors such as market volatility. It could also automate cash positioning, optimise cash flows across a group and offer AI-driven recommendations for FX and interest rate risk management based on consolidated positions.”
One of the most interesting issues in the Asian corporate treasury sector is the level of enthusiasm for implementing real-time payments.
Doll observes the region is leading the way in digital payment transformation, having recognised instant payments are especially useful for accounts payable and supply chain operations managed through shared service centres.
“Real-time payments aid in generating prompt forecasts for disbursements,” he adds. “The development of cross-border initiatives such as the PayNow-to-PromptPay corridor between Singapore and Thailand will further drive the adoption of real-time payments across Asia.”
Outsourcing remains in its early stages across Asia and is more commonly seen in Australia and New Zealand, where organisations provide treasury managed services for tasks such as cash management, hedging within policy frameworks and reporting.
“A recent trend in South Asia involves outsourcing treasury systems, either through fintechs or banks offering white-labelled TMS solutions with standardised setups,” says Doll. “These solutions are cost-effective, provide multi-bank connectivity and offer automation benefits.”
