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.

DBS Digital Treasurer: Asia’s Largest Companies are Embracing APIs

Research by DBS reveals the region’s most influential treasury units will notably increase usage of API technology to solve their biggest issues. Dynamic companies such as Gojek, Skyee and Bukalapak are just a few live examples.

Asia’s largest companies are embracing API technology as a major way to connect to their banking partners. Among the region’s largest companies by turnover, 34.8% of corporate treasurers said in 2019 that they were using APIs, with 42.6% expecting to use more of this method of communication in 2020.

The findings are part of first-of-its-kind research by DBS in partnership with East & Partners Asia. The first DBS Digital Treasurer report conducted in 2019 captures the prevailing thinking of more than 1300 of the region’s most influential businesses about the opportunities and challenges that digitisation offers their finance and treasury operations*. A follow up survey in 2020 is being conducted so look out for the results that we will be sharing.

 

APIs are increasingly popular with corporate treasury teams across the region; they are quick and easy to deploy and don’t typically require a lot of work integrating with existing ERP systems.

In step with API technology’s rise, mobile connectivity is also increasing in popularity with 39% of all surveyed expecting to be connected to banks via this method in 2020, up from 32.7% in 2019.

The research was evenly split between companies within the top 100 revenue ranked corporates in each market – with annual turnover greater than $1 billion – and middle market enterprises with annual turnover of between $100 million to $1 billion. Both segments admit they want more API-based solutions.

For the uninitiated, API stands for application programming interface and can be described simply as a set of routines, protocols, and tools for creating applications. An API determines how software components communicate with each other. The better the design, the smoother the communication.

This growing appetite for API solutions contrasts sharply with the more traditional methods of bank to client communication. Host-to-host (H2H), for example, is fast losing traction with treasurers; only 27.9% of those surveyed expected to be using this method in 2020, down from 31.7%.

But API technology isn’t automatically going to improve your operational performance; it’s what you do with the API that truly matters. DBS is working with some of the most dynamic companies across Asia using such technology to solve real-world problems.

A Gojek-it attitude

One example of this is ,Gojek, one of Southeast Asia’s most exciting startups that provides ride hailing services, logistics, shopping and payments. When it was planning to launch its ride hailing service in Singapore, Gojek had an aggressive timeline to work to and they wanted to work with a bank to provide cashless real-time pay outs to its drivers, thereby differentiating Gojek from its competitors and its ability to attract more drivers.

Working with DBS in Singapore as its primary banking service provider, Gojek adopted the bank’s RAPID (real-time APIs with DBS) solution which enables the business to provide a real-time payments answer via APIs, to solve their problem. At the end of each day, Gojek also receives a report with details of each transaction via a host-to-host connection handling reconciliation – a service which uses PGP encryption for end-to-end security.

Instant Disbursements

In a similar vein, Bukalapak, one of Indonesia’s unicorn companies and online marketplace, is using API technology to improve payment processing amongst merchants.

Bukalapak’s key objective was to improve customer experience and provide instant merchant disbursement of funds any day of the week, within six hours. Previously, this task required staff to work weekends to prepare payment files and execute via file upload on DBS IDEAL, the bank’s corporate banking platform. Bukalapak also wanted to reduce manpower requirements and failed payments, largely down to reconciliation issues.

DBS implemented its RAPID API suite for Bukalapak, enabling it to achieve its goals. The company now uses RTOL (the BERSAMA Network) for disbursements to merchants without a DBS account; ACT (account transfer) for disbursements to merchants with a DBS account, and BAV (Bank Account Verification) to validate the beneficiary’s account details, prior to executing a transaction.

As such, the solution enables Bukalapak to make payments quickly, seven days a week regardless of whether the customer has a DBS account, thus achieving a significant reduction in the number of rejected transactions and cutting down disbursement fulfillment time from six hours to one.

The Skyee is the limit

But APIs potential doesn’t end within the boundaries of one country. DBS is also supporting Skyee, a cross-border payment service provider that serves merchants in China and Hong Kong to collect sales proceeds from platforms such as Amazon, and Chinese companies to make payments to overseas vendors.

Given its huge volume of inbound and outbound transactions, and its manual processes, Skyee needed to automate transaction processing and reconciliation to obtain faster processing times and reduce “fat finger” input error. Operating in multiple currencies, it also needed to consolidate all its bank accounts used to manage them.

Working with DBS, Skyee implemented a multi-currency account solution allowing it to use a single account number, linked to multiple currency wallets, to manage its transactions. Each currency wallet is automatically created by the first incoming transaction, and additional currency wallets do not require the submission of further documentation. All the currency wallets are linked to DBS IDEAL, allowing Skyee to view balances and manage foreign currencies in real time.

Embracing API

As can be seen, some of the region’s most dynamic companies apply API technology to help streamline and improve treasury operations. In doing so, they are leading the pack in terms of innovation and change. But to start the change process, it requires a treasury team to assess its own way of doing business and build consensus around a vision to head towards.

An important starting point is to compare your digital strategy against your peer group – establish your strengths and your weaknesses and look for inspiration from fellow treasurers on how to improve.

Benchmarking Tool

Utilising the thousands of data points sourced from The DBS Digital Treasurer research, we developed a unique benchmarking tool that allows you to compare your operations with that of hundreds of other businesses across the region and answer the question ‘How digitally ready are you?’

After answering some questions within the tool regarding your operations, you will receive a unique digital benchmark score for your company as compared to your peer group average. You will then be directed to some observations to help you establish the next steps to building out your digital treasury strategy.

Click here to try our benchmarking tool and see where you stand in terms of Digital Readiness.

* Note to reader:

The research is based on direct interviews held in 2019 with 1,304 businesses, an even mix of the top 100 revenue ranked corporates ($1 billion and above in annual turnover) and mid-market enterprises ($100 million to $1 billion) across 13 country markets in Asia Pacific: Australia, China, India, Indonesia, Japan, Hong Kong, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. 97% of those surveyed had treasurer as their designated job title. The second round of this research is taking place in 2020 and we will be sharing similar follow up results.

 

This article was first published by The Corporate Treasurer on 9 June 2020. The Digital Treasurer Index Research 2019 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.