Winning the Digital Transformation Race for Treasuries in Asia Pacific

Treasurers across Asia Pacific have recognised the need to go digital for a while in part due to the growing external pressure from competitors, customers and the increasingly complex supply chain, but also because of a stronger internal push for efficiency.

How is this progressing and what are some of the innovations that are likely to benefit the corporate treasury?

 

Current State of Digital Strategy Development: A Work in Progress

Only one in four (24.8 percent) large businesses in Asia Pacific have a clearly defined digital strategy, according to insights research conducted by East & Partners for DBS’ Digital Treasurer Index in May 2019, indicating the digital transformation journey for most treasuries in the region is in its infancy. The majority (50.1 percent) of the businesses are, at best, in either the initial stage of development or are still conceptualising.

That said, businesses in the region’s developed markets are more likely to have a well-defined strategy, including those in Japan, Singapore, South Korea and Taiwan. Notably, Australian businesses are lagging far behind the rest of the developed markets on this.

Diagram: Proportion of Large Enterprises Having a Well-Defined Digital Strategy

 

Spotlight on China

Businesses in China stand out in particular as paving the way for digitisation in Asia with more than half (57.6 percent) seeing their treasury function being on top of developments. This is partly reflected in the fact that not only does the market have the largest proportion of businesses using APIs when connecting with their banks and other partners, mainland corporates also have the second highest level of automation in the overall treasury reporting system, including work reports, compliance and management reports.

Interestingly, close to nine in ten (89.9 percent) Chinese businesses are often challenged with inadequate or unknown reliability of new treasury technologies, perhaps signaling the cutting-edge innovations being trialed.

Diagram: Using APIs to Connect with Banks and Other Partners

 

Smart Contracts: The Way Forward

Smart contract has been singled out as the most valuable digital application for treasurers in Asia Pacific moving forward with an average rating of 1.76 (on a 1-5 scale, with 1= very valuable and 5= not valuable at all), ahead of automating reporting/ end to end accounting (1.89), and API integration with banks/ corporate ERP and TMS systems (1.94).

Diagram: Top 5 Most Valuable Technologies in the Digitisation Journey

 

Find out more

For more information on the DBS Digital Treasurer Index, simply drop us an email.

 

This Research is jointly brought to you by DBS, East & Partners and The Corporate Treasurer. It was first published by East & Partners on 25 July 2019.

 

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