Cash & Liquidity Management

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How Treasury Supports WPP in Asia Pacific Alex Koh, Regional Treasurer for Asia Pacific for communications giant WPP, describes how treasury’s role and priorities are evolving to support the business’ changing needs.

How Treasury Supports WPP in Asia PacificHow Treasury Supports WPP in Asia Pacific 
by Alex Koh, Regional Treasurer, Asia Pacific, WPP plc

 
Asia Pacific is one of communications giant WPP’s fast-growing regions, as countries across the continent embrace sophisticated and innovative communications, media and data solutions and multinational corporations extend their geographic and digital footprint. As the business and regulatory environment evolve, treasury’s role and priorities are also developing to support the business’ changing needs, as Alex Koh, Regional Treasurer, Asia Pacific for WPP outlines.

Treasury organisation

Our treasury is organised on a regional basis. One team is responsible for cash and treasury management in Asia Pacific, but team members are located across different parts of the region, including Australia, Hong Kong, India and China. As we operate in different locations, we don’t often have the opportunity to hold face-to-face meetings, so technology such as instant messaging, cross-border networks and collaboration software are essential.

Our team structure reflects the unique characteristics of our business: for example, although treasury defines policy and strategy, and manages treasury operations at a regional level, we need to support the activities and bespoke requirements of local business units. Our business is changing, however, which has an impact on treasury at both a local and a regional level. For example, historically our operating expense base was mostly in the currency of the countries in which we conducted business; however, this is changing as our cross-border interactions increases, so managing cash and risk has become more complex. As we do not have imports or exports of physical goods, we have limited trade finance requirements, hence cash and working capital management is a priority for us.

Cash management priorities

As a global business, establishing visibility over cash is a primary objective for WPP. This is a significant undertaking, as we have a large number of entities, bank relationships and bank accounts, further complicated by the highly acquisitive nature of our business. HSBC has been our primary cash management bank in Asia Pacific for more than fifteen years, and we work with the bank in 16 markets across the region. In addition, we maintain selected local banking relationships to facilitate in-country requirements. Maintaining these relationships is important for a variety of reasons: firstly, in-country regulations often restrict the services which foreign banks can offer; secondly, local banks offer a more extensive branch network than foreign banks are able to offer in some markets and thirdly, these banks have valuable insights into regulatory developments in-country which complements the expertise and advisory that HSBC provides to us.

However, the number and diversity of our banking relationships mean that maintaining complete visibility across cash balances, across regions is an issue. Collecting timely and accurate information and combining this data in a consistent and meaningful way can be difficult. Consequently, we needed a robust framework that would allow us not only to access information on existing bank accounts, but also to integrate new entities, bank and accounts easily in the future. We therefore decided to implement SWIFT to report account balances through HSBC into our Hong Kong entity. Although a ‘clean’ and convenient solution, it is a major undertaking given the need to complete documentation for more than 1,000 accounts across various countries. 

 

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