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More Apac treasury teams involved in digital strategy

Nearly three in 10 (29.5%) chief financial officers (CFOs) and corporate treasurers across the Asia-Pacific (Apac) region believe they are increasingly responsible for driving the agenda of their companies’ digital strategy, according to the inaugural Digital Treasury Index commissioned by Singapore-based DBS Bank.

The percentage compares with 43.6% of respondents who saw it as the responsibility of their technology colleagues.

The survey was conducted for DBS in May by East & Partners Asia. The firm interviewed 1,304 CFOs and corporate treasurers from an even mix of middle-market companies (US$100 million to US$1 billion revenue equivalent), and corporations (over US$1 billion revenue equivalent) in 13 markets: Australia, China, India, Indonesia, Japan, Hong Kong, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

Singapore leads, Australia lags

An unexpected finding from the survey was that only 11.3% of respondents across Apac said that driving digital transformation was the responsibility of their CEOs. Just over 44% of the CFO and corporate treasurer respondents also noted that along with leading the agenda, they are partnering heavily with their business units to drive digital transformation execution.  

Asked about their digital readiness, the survey also showed that seven in 10 Asia Pacific companies risk being left behind by a lack of digital strategy and execution plan.

Singapore companies fared better than others across the region with 41% having a digital transformation strategy in place. Australian businesses appeared to be the least mature of the developed markets surveyed with less than one in 10 reporting that they had a clearly defined digital strategy. 

Digital transformation is pervasive and disrupting industries across the globe, said John Laurens, group head of global transaction services at DBS, “More and more, companies have come to understand that digital transformation involves a complete transformation across their organisation – from front-end sales engagement to back-end operations.

“And this requires the involvement of every part of the company’s organisation. We are seeing more and more CFOs and treasurers being called upon to drive this change because they have broad oversight and in-depth understanding of key business drivers and organisational challenges.”

Top three risks

Asked to name the top three risks to digital adoption CFOs and corporate treasurers surveyed singled out the speed of change and complexity of the enabling technologies (86.4%), execution challenges and delivery of outcomes (78.8%), and the availability of talent to help execute digital transformation efforts (67.6%).

Laurens said that Apac companies are increasingly seeking out banks’ advice on the suitability and safety of new technologies for business use. “It is interesting to see CFOs and treasurers deal with some of the new fintech risks emerging as a result of the digital push by business leading to reliance on banks to help mitigate such risks.

“What’s more, they are demanding new ways to connect to banks such as through application programming interfaces (APIs) where the connection is both direct and instantaneous.”

The increasing adoption of APIs for integration with banks and third parties was a particular highlight in the index, with 32.3% of CFOs and treasurers now using APIs to connect with banks and other third parties. This number is set to grow to 40% over the next 12 months.

“It’s all about APIs for us; they are quick to deploy and tend not to require major rework around our enterprise resource planning (ERP) platforms,” said one major Hong Kong-based exporter. “We are finding the approach especially useful as well across our supply chain partners,”

Asked what they regard as the greatest advantages from digital transformation, CFOs and corporate treasurers ranked reducing costs and improving efficiencies as a top return on investment (ROI), which 1.93 on a scale of 1 to 5 with 1 being high return and 5 being no return at all. Improved customer experience (2.03) and lower market engagement barriers (2.11) followed closely.

The results illustrate the growing realisation that digital transformation is critical to driving competitive advantage and future revenue generation for their businesses, commented DBS

The bank added that it commissioned the Digital Treasury Index survey to help Apac senior treasury and finance executives establish their relative operational effectiveness versus their peers, and to encourage the adoption of digital solutions to improve efficiencies in the business/treasury functions.

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