For treasurers around the world, one of the many consequences of the COVID-19 pandemic has been a greater focus on the importance of digital technology.
From country-wide lockdowns to social distancing measures, traditional ways of working have been disrupted – and at the same time, many businesses have had to shift their focus from bricks-and-mortar stores to online sales. In light of these changes, treasurers are increasingly seeking out solutions that can help them work effectively in a remote working environment, while helping their businesses adapt to challenging conditions.
In many cases, technology is proving key to navigating this environment. “Most of the current treasury transformation strategies have a technology component, and it is important for treasury departments to adopt a digital mindset for their future projects, be it internal or external,” comments Gaurav Jain, Senior Manager at Deloitte Treasury Advisory Singapore. “The COVID-19 pandemic has proven that treasury teams can still operate effectively through remote access and without manual processes.”
The appetite for digital solutions in Asia Pacific was recently illustrated by the DBS 2020 Digital Treasurer Survey, which polled around 1,700 treasurers, CEOs, CFOs and business owners across the region. The survey found that 99% of respondents face external pressure to transform digitally, with key drivers including changing consumption patterns, as well as growing supply chain complexities. Where specific areas of investment were concerned, the most significant were cash management (33%) and trade/supply chain finance (30%).
Where individual markets are concerned, the survey found that almost half of corporations in Singapore have a well-defined digital strategy, followed by Hong Kong (44%) and Japan (41%). At the other end of the readiness spectrum, the Philippines and Vietnam, at 10% and 8% respectively, were found to be the least digitally ready.
That’s not to say that treasuries located in those markets are not taking steps to embrace digitalisation. Christopher Schöffel, Head of Treasury APAC at pharmaceutical company Boehringer Ingelheim, is based in Manila in the Philippines, where he notes that people are “very educated on technology”.
While the company as a whole has a well-developed digital strategy, regulatory factors can hinder the development of a digital strategy where treasury is concerned, Schöffel notes. “But I think in comparison with other corporations here, we are already doing pretty well when it comes to the digitalisation of our processes,” he says. “We just have a small portion of manual payments and have everything fully automated. Just a month ago, we decided to implement some payment intermediation software in order to build connectivity with our local banks in Asia, as well as in South America.”
The DBS survey also explored the adoption of APIs and enterprise cloud solutions in bank connectivity. While APIs were identified as the most popular method of bank connectivity – almost half of APAC businesses were using APIs, compared to 31% using cloud-based solutions – the survey also noted that a “big shift to cloud” is expected in the coming three years. Indeed, 59% of respondents said they were looking to implement cloud-based solutions in that timeframe.
“It is fortunate that the cloud technologies that companies are adopting are evolving and they are coming to realise that cloud can drive digitisation with the desired security and controls,” comments Jain. “The low cost of cloud technologies can help small- and mid-sized companies to implement workflows that are fully digital and robust. By implementing these technologies when in recovery mode, companies will be able to reap the benefits and thrive for many years to come.”
With the pandemic continuing to bring major challenges for businesses, embracing the opportunities brought by new technologies could prove critical for many. As Tan Su Shan, Group Head of Institutional Banking at DBS Bank, commented in a press release: “The COVID-19 pandemic is the crisis of a generation and has reset the way countries and businesses operate. It has forced many to rethink their strategies to ensure their sustainability. However, every crisis also has its silver lining and there is no better time for corporate leaders to grab the bull by its horns and re-engineer their business blueprints quickly to adapt to the changing landscape to build our businesses back better and stronger.”