Coping with market uncertainty requires prudence and flexibility. What matters to corporates and financial institutions seeking to optimise their cash in complex business environments is liquidity access, cost effectiveness, risk management and technology.
The winners of Asiamoney’s Cash Management Poll 2015 demonstrate their excellence in these areas and more. The poll, which surveyed more than 10,000 senior financial and treasury staff from corporates and financial institutions, assessed global and domestic banks in the Asia Pacific region across a wide range of cash management product and services categories.
Deutsche Bank was a big winner among corporates, claiming top rank in the small (less than $100m in turnover a year) and large (over $500m in turnover a year) categories. Unsurprisingly, corporates were most concerned with competitive pricing from their service providers, followed by security and flexibility in solutions, respectively. Counterparty risk and professional staff were also high concerns, and these are the very areas in which the winners of Asiamoney’s Cash Management Poll excelled.
“We offer best-in-class solutions for clients seeking in-depth consulting and customisable cash management solutions to meet their business demands," said Mahesh Kini, regional head of cash management corporates, Asia Pacific, Deutsche Bank. "As a leading cash management provider in the industry, our teams are able to harness resources and expertise from across the bank to provide clients with award-winning and value-creating solutions.
"Deutsche Bank’s achievement in this year’s Asiamoney Cash Management Poll is indicative of our strong partnership with clients in Asia Pacific."
Corporates in Asia today are facing a unique environment of ongoing market volatility and so require solutions to provide transparency, efficiency and greater control at global, regional and local levels. However, this has proven to be challenging for corporates, especially in Asia, due to the heterogeneous nature of the regulatory landscape.
The poll results show that cost effectiveness remains a top criterion when corporates shop around for cash management services, but there is also high demand for secure and flexible services. Safe, customisable solutions supported by well-trained knowledgeable personnel are deemed indispensable for Asia’s corporates.
Treasury is now increasingly given a strategic role within corporates, so ways are sought to reduce cost, inefficiencies and risks. One challenge is to effectively fulfil such requirements while providing corporates with convenient and easy online facilities.
“Electronification of transactions in the region, which involves converting paper to electronic, batch processing to real time and cash to cashless, is opening up new opportunities for corporates to re-evaluate their cash management and working capital processes," adds Deutsche's Kini.
"This presents a significant opportunity for banks like Deutsche Bank to introduce innovative solutions to help its clients optimise and fully leverage the latest technology. Deutsche Bank recently announced its commitment to digital banking and investments in cash management with Strategy 2020 to support the bank’s market leadership in cash management and transaction banking."
DBS building block
DBS, the other big winner, proves it ranks among the best by winning the small and medium ($101m to $500m turnover a year) categories as voted by financial institutions.
“Cash management has been a priority for us and is viewed as a critical building block for strong and long-standing client relationships," says Navinder Duggal, global head of cash product management at DBS Bank.
"Aligned to our group’s commitment to making banking more interactive and intuitive for our clients, we devote special attention to building holistic relationships and providing innovative solutions. The key underlying theme is to help improve clients’ profitability and productivity.”
Today in Asia, financial institutions are expanding out of their home markets and establishing subsidiaries, and are therefore needing more sophisticated cash management services — especially solutions for multi-location and multi-entity operations, managed through a central or regional treasury function.
There are also clear trends in the spread and development of electronic transaction initiation, automated reconciliation solutions, optimisation of working capital and faster payment delivery.
Tokyo-based Sumitomo Mitsui Banking Corporation, a strong cash management services provider for many years now, spares no effort in engaging clients throughout the region, especially as competition heats up in this vibrant geography.
“We have financial institutions professionals in all main Asia Pacific markets and, in addition to our dedicated Japan-based client service team which regularly travels the region, we provide regular direct contact and support to our Asian FI customers," explains Koichi Nishijima, head of global clearing solutions & network management group at SMBC.
"Our meetings and seminars help financial institutions with the latest updates and provide understanding into Japan-specific factors such as charging practices for JPY payments. At the same time, we receive inquiries and feedback, enabling us to offer solutions and enhancements in a timely manner.”
Timely is the operative word. Developing Asia is advancing swiftly and commercial and regulatory environments demand not only increased flexibility and responsiveness but also the acumen to best leverage resources, knowledge and capabilities to formulate the best solutions. Technology, of course, facilitates all this.
“The market is changing. For financial institutions, regulations, digitalisation and integration of products, infrastructure and platforms are reshaping this industry," says Nancy So, head of sales for Asia Pacific, institutional cash, within institutional cash and securities services at Deutsche Bank. "To operate effectively, financial institutions have to be more stringent with know-your-customer and anti-money laundering processes. However, customers are the ones dictating the relationships. They require speedy implementation of solutions, and to be able to self-administer tasks using online platforms and apps."
Indeed, for increased operational efficiency and profitability, the increased focus on automated and digital solutions, such as mobile solutions, e-commerce and real-time payment, is inevitable.
There is a salient rise in collaboration between banks and ERP providers, logistics companies, and the partnerships between banks and FinTech companies driving the evolution of innovative use of technology in the banking sector. Nevertheless, changing regulations, low interest rates, cyber crime and social engineering still present challenges in cash management.
More cash management activities are expected in the near future as the opening up of large trade markets such as China, India and Asean presents unprecedented opportunities. The liberalisation of the renminbi also adds to the changing cash management landscape.
