Business Digital Transformation: Are We At A Game-Changing Moment?

Business Digital Transformation: Are We At A Game-Changing Moment?

Faced with unprecedented challenges of adapting to operational and supply chain changes overnight, remote customer acquisition and economic uncertainty, going digital is right back at the top of the agenda for businesses and corporates in Asia Pacific.

Rewind a year and businesses were still in the early stages of their digital journey with less than one in four (24.8 percent) large businesses in the region having a clearly defined digital strategy, despite most recognising the importance of digital transformation to improve their ability to survive and thrive (http://eastandpartners.com/uploads/files/research-notes/2019/2019-07_Research_Note.html).

So where do we stand now with business digital transformation? The DBS/East & Partners second “Digital Treasurer” benchmarking research is out.

 

Businesses Are Making Strides in Their Digital Transformation Journey

As businesses reshape their overall business strategy in response to the Covid pandemic, taking into account the shift in customer behaviour, supply chain disruptions, business model opportunities and operational continuity, they are having to take a step back and reassess their roadmaps. Many businesses are reporting a shift in their priorities and resources for the digital roadmap itself.

Despite these challenges, a larger proportion of businesses in Asia Pacific now have a clearly defined digital strategy relative to a year ago, according to insights research conducted by East & Partners for the DBS Digital Treasurer Index II. This figure has grown by 7.7 percent to reach 26.2 percent. At the same time, there is a material drop in the proportion of businesses with no strategy, falling from 25.1 percent a year ago to 18.7 percent. Taken together, these highlight an accelerating growth in digital strategy development among businesses in the region.

Current State of Digital Roadmap Development

% of businesses

Insights Research: Current State of Digital Roadmap Development (Graph)

Source: East & Partners insights research for DBS’ Digital Treasurer Index II – H1 2020 (N count = 1,686)

Businesses Are Making Strides in Their Digital Transformation Journey

Reducing cost and improving efficiencies in the long run have always been the emphasis in many business cases for digitisation. But increasingly, enhancing customer experience is rising as a key driver and for good reason. Having a user friendly and seamless digital platform is now integral to ensuring business continuity, especially when direct interactions with customers are becoming increasingly remote.

In fact, improving customer experience has been highlighted as the greatest ROI from investing in technology solutions by treasuries in the region, alongside reducing cost. Perhaps unsurprisingly, our research suggests that middle-market enterprises stand to benefit more relative to the larger corporates when it comes to customer experience enhancement, levelling the playing field for market participants.

“Cost efficiencies were where we began developing business cases together for digitisation investments but we’ve actually found lots of other benefits that flow, in particular making our customers more sticky and spending more with us.”

- Treasurer, US$2.5Bn, Hong Kong Regional Hotel Group

Key Returns to Investment

Rating on a 1-5 scale, with 1= high return and 5=no return at all

Insights Research: Key Returns to Investment (Graph)

Source: East & Partners insights research for DBS’ Digital Treasurer Index II – H1 2020 (N count = 1,686)

Where Are Businesses Investing in Treasury Services?

There has also been a shift in treasury investment focus. Cash management digitisation has initially led treasury digitisation in the region, as evidenced by the higher level of automation reported in cash management for large Asian businesses relative to other functions such as trade and supply chain financing, cross-border payments & FX, and risk & compliance reporting.

But now, businesses seem to have already eked out efficiencies in their cash management operations and looking to digitise their physical and financial supply chains. This is particularly prominent in Malaysia, India, Japan, Hong Kong, China, Singapore and Indonesia where a majority of businesses are investing in new technology solutions related to trade and supply chain financing.

“We’ve currently got 3 supply chain funding and management development projects happening which will then drive a redevelopment of our cross-border payment operations.”

- Treasurer, US$1.4Bn, Malaysian Importer/Exporter

Top Investment Area for Each Market

% of businesses

Insights Research: Top Investment Area for Each Market (Graph)

Source: East & Partners insights research for DBS’ Digital Treasurer Index II – H1 2020 (N count = 1,686)

What is your experience implementing digitisation projects in your organisation? What is the most valuable learning point that helped you along your journey?

We'd like to hear your thoughts and opinions, get in touch with us below.

On behalf of DBS, we are delighted to provide you with access to an interactive benchmarking tool, where you can find out how your organisation measures up against your peers in digital readiness.

Upon completion of the tool, you will receive an assessment of your digital readiness via 4 core digital values. Kindly access the benchmarking tool here: https://treasuryprism.dbs.com/digitaltreasurer

Have a conversation with DBS today.

Start your digital transformation journey today by finding out more about the latest, available digital solutions that can help to solve your treasury challenges. See our most recent articles on Digital Pulse, or sign up/login to Treasury Prism today to discover a world of opportunities.

 

This article was first published by East & Partners on 20 August 2020. The Digital Treasurer Index Research 2020 was conducted by East & Partners, in partnership with DBS and The Corporate Treasurer.

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.

Digital Supply Chain Solutions: Asia at the forefront of digital growth

Digital Supply Chain Solutions: Asia at the forefront of digital growth

COVID-19 has made it clear that digitalisation is imperative for organisations to survive and thrive. As the pandemic accelerates global adoption of digital supply chain solutions, Asia is emerging as a catalyst for digital transformation and a beneficiary of economic growth, says Mark Troutman, Group Head of Sales, Global Transaction Services, at DBS Bank.

The COVID-19 crisis has created a need for contact-free interaction between customers, suppliers and employees, directly impacting business strategy, sales transactions, trade finance processes and treasury operations. As a result, many organisations have accelerated their digitalisation plans and treasury professionals are leveraging technology to overcome supply chain disruption – from API-led connectivity to enable remote engagement and eliminate manual workflows in the order-to-settlement journey.

 

Amid all these trends, Asia – spurred by its relatively quick recovery – is at the forefront of global digital transformation and poised to benefit economically from post-pandemic opportunities in Asia.

“There is a serious move to digitalisation and we are here to help,” confirms Troutman. “We are seeing a particularly notable swing amongst organisations operating in Asia.” And within this new normal landscape, he believes banks are playing a greater role in helping businesses adapt to the reality of a post-pandemic world.

A new global supply chain ecosystem

As organisations recover from the effects of the pandemic, there is a need to consider their broader supply chain needs. This is where banks can take a more proactive and far-reaching leadership role in driving digital transformation for their clients.

“Banks can leverage existing strengths of connectivity across the supply chain ecosystem, linking manufacturing lines to supplier lines with data, along with their ability to help finance and deliver on logistics needs in a contact-free manner,” explains Troutman.

APIs are also key in the digital transformation of supply chains; they allow organisations to upload trade applications digitally and directly from their own internal platforms, offering an alternative solution to replace wet signatures, with enhanced real-time status notification capabilities. Recently, DBS offered same-day financing to distributors of products made by Haier, the Chinese electronics manufacturer, via Haier’s own digital supply chain platform. Through a series of APIs, DBS enabled distributors to obtain financing digitally and Haier to sell more products.

The digital priority

Digitised supply chains offer greater efficiency and more robust processes, ensuring access to fast and fluid working capital for all parties and enhancing connectivity across a horizontal ecosystem. Each step in the client journey can be digital – from online account opening and digital onboarding of suppliers, to uploading or presenting transactional documents, online platforms, managing application and resubmission processes, as well as receiving financing.

Shorter processing time is another benefit. For example, DBS completed the first transaction through the CamelONE Trade Finance portal early in 2020, becoming the first Singapore bank to join Contour’s network, enabling shorter settlement times, less paperwork and simpler trade processes for customers.

Efficient liquidity management - crucial during times of crisis – is improved by instant settlement, automated reconciliation and greater visibility of the organisations’ cash. In the wake of COVID-19, banks enabled digital solutions for organisations to leverage surplus funds across entities, enabling treasurers to better manage borrowing costs, and to enjoy greater transparency over transactions and increased control over cash as the result of more instant payment transactions.

Asia at the centre of digital transformation

Troutman believes Asia, with its general resilience based on economic strength, robust domestic and regional demand and agility in digital adoption, is well-positioned to lead its Western counterparts in supply chain transformation and post-pandemic economic recovery.

“The overall recovery is slow, especially for major trading partners in Europe and the US,” explains Troutman. “There is also more economic interdependence between Asian countries as geopolitical and economic forces are impacting traditional relationships.”

As organisations look to minimise supply chain disruption and diversify production bases, this could mean a shift in procurement to countries such as Vietnam and India, where labour costs remain relatively low. In addition, organisations that built out their local and regional supply chains within Asia can benefit from shortened supply chains and expedited transactions as well as strong demand from a demographic that is highly receptive to digital services.

With attractive growth opportunities, Asia is expected to remain a nexus for trade, while propelling digital transformation across global supply chains in a post-pandemic world. This bodes well for organisations able to tap this potential first-hand and ready to embark on the next phase of their journey. “Organisations that prioritise digital transformation and look forward to the ‘new normal’ will position themselves to be more relevant, and improve their relevance in the post-pandemic world,” concludes Troutman.

Have a conversation with DBS today.

Start your digital transformation journey today by finding out more about the latest, available digital solutions that can help to solve your treasury challenges. See our most recent articles on Digital Pulse, or sign up/login to Treasury Prism today to discover a world of opportunities.

 

This article was first published in Global Finance in July 2020.

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.

Leading in Digital Cash Management

For many years, cash management was an ancillary function for corporate treasurers, and in some cases, the same applied to banks. No longer. As corporations in all industries review and transform their business models for a digital age, and new payment and collection methods emerge, managing cash effectively has become a strategic priority to improve margins, enhance the customer experience and support global liquidity needs. In this environment, working with a strategic partner such as DBS that is pioneering innovative solutions in cash management across key Asian markets, is a vital way to address pain points, leverage new commercial opportunities, offer a seamless customer experience, and create competitive advantage.

 

Digitisation and the customer experience

Regardless of the industry a company operates in, creating a seamless experience for customers has become fundamental to delivering growth and competitive advantage. To achieve this, corporations of all sizes and profiles are seeking to digitise and automate their processes and customer interactions from end-to-end. For example, companies that previously sold through distributors or agents, whether business-to-business (B2B) or business-to-consumer (B2C), are increasingly selling direct to customers through e-commerce models.

As a first step, this involves setting up new digital sales channels and the means to collect payments. However, a successful e-commerce model with a high level of customer satisfaction also relies on immediate fulfilment of goods and services. To achieve this, companies need to be able to identify and reconcile incoming flows immediately, and integrate this data instantly into internal systems to trigger the dispatch of goods or authorise access to services. In many cases, companies also need to be able to manage a fast-growing volume of collections as subscription-based models, online media services such as pay TV, and digital payments for transport, insurance and other services become more prevalent.

 

Enablers of transformation

Real-time payments and innovative technologies are amongst the key enablers of transformation and digitisation of traditional business models. Real-time or instant payments schemes offer instant movement of cash, but also 24/7 processing, negating the concept of business hours and creating both challenge and opportunity in the way that corporations construct their business models. At the same time, new technologies are transforming the exchange of transactions and data, and the way in which data can be harnessed, including the use of open application programming interfaces (APIs) combined with sophisticated data analytics, artificial intelligence (AI) and machine learning (ML).

As a result of these developments, alongside wider industry developments such as the growing use of mobile wallets and industry disruption as new players and business models emerge, the concept of cash management is changing dramatically.

“While payments and collections were ancillary to the core business in the past, today they are pivotal to digital business models, driving supply chains and fuelling ecosystems.”

Jasmin Ng, Group Head of Cash Product Management, DBS

Consequently, banks can no longer sell products and services in isolation, but must understand their customers’ business in depth and deliver solutions that integrate data and transactions across the ecosystem in real-time, 24/7. This requires a fundamental change of approach, moving from traditional banking to digital banking, and from discrete products to integrated ecosystems.

 

Client-centric innovation at DBS

“As a bank, we pride ourselves as being the bank for a digital age, and a first mover in the use of new technologies to transform our clients’ experience of banking, address treasury and cash management problems and create new commercial opportunities.”

Jasmin Ng, Group Head of Cash Product Management, DBS

DBS is one of the first banks in Asia to use API-enabled banking with our clients, with an initial suite of over 100 APIs which continues to grow. Through the use of APIs, DBS enables the seamless integration of banking services into clients’ business platforms and processes for improved productivity and workflow efficiency. For example, DBS has  worked with regulators in Asia to digitise tax payments, partnered with ERP and accounting system providers to integrate transactions and information flows,  and co-created digital payment and collection solutions for clients and their end customers.

”Our approach to digital, integrated banking is wholly client-centred, reflecting every client’s diverse needs and expectations of innovation. In some cases, clients come to us seeking new ways to resolve specific pain points, such as identification and reconciliation of incoming flows, payments or process efficiency. Others are looking to understand what new opportunities are emerging and the value that these could offer to their business.”

Jasmin Ng, Group Head of Cash Product Management, DBS

For instance, a large number of organisations in Singapore are seeking solutions to leverage the new Singapore Quick Response (SGQR) code, the world’s first unified QR code offering. SGQR was first introduced in September 2018, and allows buyers to scan a single QR code to make payment across any one of 27 payment schemes, such as PayNow, Nets, credit/ debit cards or e-wallets, rather than having to find the specific QR code that relates to their payment scheme. The convenience and simplicity of the unified QR code approach has led to an explosion in the use of QR code-initiated digital payments. Companies with online businesses or mobile applications in particular can benefit from using QR codes as a mode of payments/collection, as this in turn provides a seamless and instant transaction experience for its customers to pay without using physical cash or card, while not compromising payment security. One example where DBS has enabled an organisation to do this is its partnership with Singapore Airlines (SIA). With the use of PayNow QR codes, SIA enables passengers to pay for their flights direct from their bank accounts using PayNow, and issue tickets once payment is completed. In the event that the trip is cancelled/amended, SIA can refund the outstanding amount back to the passenger’s bank account directly and automatically. Benefits accrue to both passengers and SIA: passengers benefit from secure, convenient payment, while SIA can identify and reconcile incoming flows easily, and manage refunds efficiently.

As awareness and adoption of QR codes continues to increase, corporations operating in a wide range of of industries, particularly fast-moving consumer goods (FMCG), media, retail and other B2C industries, are seeking to understand and implement ways to leverage the opportunities that QR codes offer.

 

Accelerating innovation and reducing risk

Whether clients consider innovation to be a way of solving problems or creating new opportunities, the most successful innovations are those that are most deeply embedded into their processes, system environment, business model and strategy.

“To achieve this, we co-create with clients leveraging our ‘4D’ innovation process: discover; define; develop and deliver. By taking a structured approach to innovation, we can accelerate the innovation process and reduce project risk, whilst ensuring that new solutions achieve project objectives in a precise, integrated way.”

Jasmin Ng, Group Head of Cash Product Management, DBS

An example of 4D innovation is the way that DBS has worked with large insurance companies to digitise claims processing in Singapore and Hong Kong, transforming the customer experience whilst also streamlining internal processes and reducing costs. While in the past, it could take days or weeks to process claims, DBS has enabled insurance companies to accelerate claims processing and replace manual cheques with instant payments direct to claimants using bank account instructions held in a central, government repository. In other cases, DBS has worked closely with ride-hailing platform companies to streamline and digitise both payments from customers and payments to drivers.

In doing so, we have helped to enhance the experience of every participant in the value chain, reducing costs and improving financial and operational efficiency and satisfaction levels from end-to-end.

 

Resetting industry norms and expectations

The impact of these innovations is not simply to enhance the experience of individual corporations, but also to set new expectations and establish new norms for the industries in which these organisations operate. However, fulfilling this transformative role requires more than technology innovation alone. A bank also needs to demonstrate a proven ability to deliver new technology solutions, a commitment to client partnership and co-creation, a structured innovation process, and the expertise to understand and positively contribute to client needs and aspirations.

In addition, the cash management landscape is changing rapidly with significant disruption as new payment services providers and fintech companies enter this space.

“At DBS, we embrace this change and disruption and recognise our role as the connectivity hub in clients’ ecosystems, facilitating the flow of transactions and data between ecosystem participants. This role continues to evolve as new payment methods and business models emerge, transactions and data are increasingly exchanged in real-time and client expectations on service models develop, such as interaction using augmented reality. It is important for us to continue to innovate and invest in the right skills and experience to support our clients through this new digital cash management landscape.”

Jasmin Ng, Group Head of Cash Product Management, DBS

While cash management is likely to be radically different in ten years’ time compared to today, banks with a long-standing commitment to cash management, alongside their third-party technology and infrastructure partners, will be catalysts, enablers and long-term partners to accompany clients through their transformation journey.

 

Discover a spectrum of opportunities

Explore DBS Treasury Prism today to start building your own cash management simulations and discover opportunities that can shape your treasury strategy. 

 

 

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.