Alvin Ho, who became Deutsche Bank’s head of corporate cash management for China in June this year, spoke next on the key digital transformation trends within treasury management across the four markets of China, India, the ASEAN member countries and regional hubs/North Asia.
Ho said that China is seeing a huge increase in the adoption of new technologies as a driver for greater financial inclusion. Mobile-based payments have become standard for consumers, while corporates are seeking out new payment methods as more transition from a business-to-business (B2B) model to a business-to-consumer (B2C) one. China’s treasurers are closely involved in tapping into the new payments and channels that could potentially drive the business model – particularly those with global aspirations that are moving towards e-commerce delivery channels. Banks have responded by working directly with fintechs to jointly build end-to-end integrated solutions that address treasury’s needs.
In India the government has been highly proactive in promoting fintech and developing a supporting infrastructure that includes the IndiaStack – a set of application programming interfaces (APIs) such as Aadhaar, the Unified Payments Interface (UPI) for instant payments, digital know-your-customer aka eKYC using adaptive biometric authentication, eSign and DigiLocker. These enable governments, businesses, start-ups and developers to utilise a digital infrastructure for paperless and cashless service delivery. India’s corporates are responding much faster in their adoption of APIs and other technologies
The impact on India’s treasurers is that they are having to adopt or work with the banks and fintech companies in order to implement mobile app-based solutions for payments, collections and reconciliations, as e-commerce is transforming the landscape.
The ASEAN (Association of Southeast Asian Nations) region comprises the 10 countries of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, a “very fragmented market” said Ho and with a diversity of different regulation. The region’s digital economy is on course to reach up to US$240bn in value by 2025, effectively tripling in size and driven primarily by e-commerce.
Despite the disparities in local solutions, governments and ASEAN banks are driving for increased cross-border collaboration. The region is also seeing tie-ups between fintechs and payment service providers (PSPs) to build last mile capability, with last mile cash solutions provided through partner banks and ATMs.
Regulatory initiatives aim to further develop the region’s main financial hubs of Hong Kong and Singapore as regional hubs – for example for regional treasury centres (RTCs), while Apac’s mature markets, such as Japan and South Korea, are exploring emerging technologies to replace legacy market infrastructures, such as Japan with blockchain.