Digitising treasury operations has become one of the biggest goals for corporate treasury departments across Asia for the year ahead, according to a report by Greenwich Associates.

Asian Corporate Finance: The Treasury Digitisation Drive just published by the US management and consulting group found that the share of senior Asian corporate treasury officials citing “digitisation” as a top priority for their companies in the year ahead nearly doubled to 22% in Q4 2018, from 12% in Q4 2017.

“Digitisation now ranks behind only core functions like funding and liquidity management in terms of the biggest goals for corporate treasury departments across Asia in 2019,” says Gaurav Arora, Greenwich Associates Head of Asia Pacific and report co-author.

In addition, digital capabilities are cited by nearly half of the region’s large corporate respondents as among the key selection criteria for their cash management providers.

Four key areas

The report provides an in-depth look at how Asian companies and their banks are using technologies to revolutionise operations and reviews corporate digitization efforts in four areas:

• Automation
• Digitisation of payments and receivables
• Seamless integration of information flows
• Data analytics and insights.

“Prior to the global financial crisis, innovation in corporate finance and treasury meant the rollout of new and increasingly sophisticated banking products,” says Dr. Tobias Miarka, Greenwich Associates managing director and report co-author.

“A decade later, the innovation most important to Asian CFOs and treasury professionals has less to do with financial products and more to do with digital solutions, data analytics and artificial intelligence (AI) that make treasury and banking operations better, cheaper, faster, and more transparent.”

The report notes that when digitising corporate treasury functions today, Asian companies can access host of new alternatives from “fintech” providers in payments, FX, trade, liquidity, and even cash management, and full treasury management systems (TMS).

While fintechs are generally more nimble and easier to work with, many Asian corporates still prefer working with banks, which still rate highly on trust and compliance. However, this advantage is unlikely to last for long. 

Greenwich Associates conducted 765 interviews between September and November last year in large corporate banking and 955 interviews in large corporate cash management at companies in China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Subjects covered included product demand, quality of coverage, and capabilities in specific product areas.