Seamlessly connect: towards the digital treasury future

As corporates across Asia Pacific race to integrate digital solutions into business processes, financial decision makers are focused on working ‘smarter’ to enhance the customer experience.

According to HSBC’s Asia Supply Chains Research in 2021, 66% of corporates in the region seek seamless integration with their banking partners to support their ongoing digitisation journey. So the race is really on – but the course isn't straightforward. 

Many corporates are still navigating how to digitise. At Zuellig Pharma, for example, Daniel Laverick, Vice President and Head of Digital & Data Solutions, explains key technology-related challenges stem from different levels of adoption across Asia. As a result, the healthcare services provider has had to adapt how it customises products to fit the most pressing needs of customers, as well as educate all stakeholders on the application of technologies.

Quicker and slicker tech

The shift towards digital is not just a matter for treasuries, it is also a response to consumer and business behaviour. To address this, more corporates are leaning towards banking integration via application programming interfaces (APIs) to help close transactions and access information more quickly.

“The single-most common question from treasurers is how to make their treasury function more efficient, to enable growth,” said Zohair Ahmed, Director, Global Liquidity and Cash Management at HSBC Singapore. “The answer, increasingly, is via APIs.”

This suits companies of all types – whether it is a commodities firm operating in Indonesia or a pharmaceutical company operating in Thailand. “Rather than needing to collect cheques in person, an API-based process makes collections a lot quicker and paperless”, said Ahmed. 

Zuellig Pharma has reaped similar benefits. In response to the pandemic, the company leveraged new digital solutions to make communications simpler and faster. “Covid-19 and its lockdowns forced us to pivot quickly to ramp up our ecommerce platform to fulfil orders to get life-saving drugs out the door,” explained Laverick.

In short, this revolutionised the firm’s processes overnight – from a manual effort with collectors knocking on doors for cash and cheques to deposit in the bank – to offering online capabilities that gave customers a new way to pay, quickly and easily.

With around $1.5 billion to $2 billion outstanding in accounts receivables at one point, the API solution helped the company to keep operating with sufficient cashflow, emphasised Laverick.

More broadly, APIs and platform-based sales can enable companies to tap into a larger customer base than previously possible, explained Ahmed. The next step is embedding ‘Banking as a Service’ to facilitate financing through an ecommerce platform.

The application of APIs will have significant implications for Zuellig Pharma, too. “We see huge potential for optimisation going forward,” he said. “We can also respond much more quickly when new opportunities emerge in new markets, by expanding existing tools and plugging gaps in other markets we see in the health tech space.”

Blockchain breeds seamless connections

Blockchain also has the potential to transform the role of treasury functions. Its uses are multi-lateral, including:

• Real time cross-border settlements
• Digital identities
• Real estate tokenisation
• Bond issuance

In essence, this enables a wide variety of information to be exchanged among several parties with better visibility than before.

Further fuelling blockchain’s potential is the demystification of this technology. “Misconceptions were mainly about whether enough people will start to adopt it, so that it could become a workable solution with regulatory support,” explained Ahmed.

Today, there is greater realisation of its ability to also solve pain points such as simplifying cross border payments and onboarding requirements for banking customers, he added.

Zuellig Pharma is already a big proponent of blockchain. “We started on this journey to enable the authentication of pharmaceutical products for patients,” said Laverick. A natural extension of this is guaranteeing that a product is genuine and of high quality, including how it is transported in the right conditions. The firm can then automatically generate an interaction with the bank, to eliminate manual processes in favour of an end-to-end, seamless user experience.

This provides a glimpse into how the treasury landscape will potentially evolve; blockchain can help corporates transform their ecommerce platform into more of a real virtual marketplace.

This is the case for Zuellig Pharma, explained Laverick, enabling it to offer more than one payment provider and competing products to enhance the user experience as a one-stop shop that delivers choice. “It is about building an ecosystem where users can do everything they want and need on one platform.”

Taking on a new treasury role

HSBC is already seeing treasuries evolve from being focused on operational efficiency to become more customer-centric and growth oriented. This manifests itself in greater synergies between treasury and the business, enabling companies to capture new technology-led opportunities.

“Two years ago, technology was nowhere near as high on our agenda as it is now,” added Laverick.

His firm’s goal mirrors that of many other corporates: customer loyalty and stickiness. “So we need to work hand-in-hand with our tech teams and HSBC to enable customers to do everything on our platform.”

While the finance function and IT have historically been aligned, the new digital teams allow treasury to bridge the commercial gap and enable growth. “It has to evolve in line with the objective of delivering a better customer experience,” added Ahmed. “Customers now want things quicker, which drives more collaboration internally.”

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