Asia’s Corporates Driving Treasury, Banking Digitization

Large corporates across Asia are driving digital transformation of banking and treasury management in the region, according to new analysis from Greenwich Associates.

The firm published its new report, “Asian Corporate Finance: The Treasury Digitization Drive,” this week, finding that digitization is a top priority for treasurers, financial chiefs and other executives for the year ahead. The portion of treasury officials prioritizing digitization has nearly doubled since the fourth quarter of 2018 to 22 percent, the report revealed.

Analysts said treasurers are focused on the acceleration of banking and treasury processes, as well as the ability to make these tasks more affordable and transparent.

“Digitization 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,” said Greenwich Associates Head of Asia Pacific Gaurav Arora, the report’s co-author, in a statement.

Key to the digitization process is treasurers’ embrace of FinTech partners, analysts noted, as they pursue four key areas: automation, digitization of payments and accounts receivables, information and data integration, and data analytics.

“Prior to the global financial crisis, innovation in corporate finance and treasury meant the rollout of new and increasingly sophisticated banking products,” said Tobias Miarka, Ph.D., Greenwich Associates managing director and report co-author, in another statement. “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 AI that can transform the way they do business.”

In areas like foreign exchange management, trade, and cash management, working with FinTech third-party providers will be an important part of the digitization journey. Today, the report found, most treasurers prefer to work with traditional banks, thanks to their competitive advantage of customer trust and compliance. But the report found that FinTechs will soon be able to compete on those levels, too.