Robotic Treasury: Seizing Digital Transformation in ASEAN
By Eleanor Hill, Editor
HSBC’s recent Global Liquidity and Cash Management Forum held in Singapore captured the spirit of digital change that is sweeping through businesses, governments, and treasury in the ASEAN region.
Jing Li Thoh
Ai Chen Lim
The digital revolution is having a clear impact on the way that businesses interact with their customers, subsidiaries and treasury functions. In ASEAN this is felt particularly keenly, as a young, growing and technologically savvy population is ready to seize the opportunities being presented by the Fourth Industrial Revolution, or Industry 4.0.
Opening the latest Global Liquidity and Cash Management Regional Treasury Forum, Tony Cripps, Group General Manager and CEO, HSBC Singapore, commented that the world is facing an economic power shift that is creating numerous challenges, alongside rising trade tensions. “Treasurers must support their companies as they expand into new geographies and the way in which they deploy fresh business models has to be adaptive and agile,” he noted.
Cripps also explained how more and more corporates are setting up operations in Singapore, leveraging it as the financial centre for ASEAN – attracted in no small part by the nation’s advanced digital connectivity. The establishment of smart cities, digitising trade, and building integrated systems are all on the agenda to develop ASEAN further, Cripps noted, and Singapore is driving the momentum behind these goals.
Treasury 4.0 in ASEAN
Next on stage was Lance Kawaguchi, Managing Director, Global Head – Corporates, Global Liquidity and Cash Management, HSBC. He described how Industry 4.0 is happening now, across the ASEAN region. Moreover, Industry 4.0 is converging with Treasury 4.0, Kawaguchi explained. “Next generation treasury functions will be automated, data-driven, real-time, forward-looking, and increasingly strategic. The challenge for treasurers is to look beyond the hype, towards practical, real-world applications of disruptive technologies,” he said.
Building a Smart Nation
Kawaguchi then introduced Kwok Jia Chuan – Deputy Director, Citizen & Business Projects at the Smart Nation and Digital Government Office (SNDGO) in Singapore.
Kwok said the Smart Nation initiative is about Singapore taking full advantage of technology to create new jobs and new business opportunities, as well as making the economy more productive and lives more convenient. Technology is being used to achieve considerable transformation in Singapore in three broad areas:
- Digital economy
- Digital government
- Digital society
Kwok said the government is looking in particular at transformational changes that focus on citizens. “Hot topics at the moment include artificial intelligence [AI], machine learning, and data. These all hold great promise for the government to continue to transform lives for people and businesses,” he said.
To achieve large-scale change, the government has introduced a series of Industry Transformation Maps, across 23 different industry sectors. The Government has also recently set up Digital Industry Singapore (DISG) to make sure that SMEs can also continue to accelerate their digital efforts.
In addition, SNDGO has also published the Digital Government Blueprint (DGB), which aims to make the Government “Digital to the Core” Kwok said: “Government has to ensure that citizens find its services easy to use and seamless. Businesses must find the services secure, reliable and relevant. Public officers need to be digitally-enabled and confident to take advantage of the opportunities that technology presents.”
As the economy and the Government continue to digitise, there are six Strategic National Projects being advanced as part of the Smart Nation drive:
- National Digital Identity. The aim of this project is to create a unique digital identity for every Singaporean.
- E-payments. The government and banks are working closely to promote safe, seamless and secure digital payments.
- The Smart Nation Sensor Platform to fuse data together from a network of sensors for better urban planning.
- Urban Mobility Piloting the testing of autonomous vehicles and new concepts in transport.
- Moments of Life is an app that bundles together Government services, from digitally registering births to locating childcare centres and providing easy access to immunisation records.
- The Core Operations Development Environment and eXchange (CODEX) is a new technical and data architecture for Government.
Kwok finished by saying that the Singapore Government is committed to the Smart Nation drive. “This is not something that will take a day, month, or even a year, but I am confident that this drive will keep Singapore relevant and globally competitive,” he noted.
Preparing for Treasury 4.0
Picking up the themes from Kawaguchi’s earlier address, a panel of industry experts then discussed how corporates can prepare for Treasury 4.0.
HSBC’s Lim kicked off the debate by explaining that Treasury 4.0 is essentially next generation treasury. “Treasury has always moved with the needs of the business and new technologies offer the opportunity to further enable treasury transformation,” she said. Technologies that are driving Treasury 4.0 are AI, where algorithms can be built into cash forecasting, application programming interfaces (APIs) that allow for instantaneous exchange of information and seamless transaction flows, and robotic process automation (RPA). Blockchain technology also has a role to play, such as R3’s Corda and IBM’s Hyperledger Fabric, she commented.
Sembcorp’s Thoh added anything that is repetitive in nature and involves taking information from other systems into the treasury management system (TMS) represents an opportunity for RPA. Sembcorp recently spent eight weeks simplifying one of its processes with a robot named Steve. As Thoh explained: “Robot Steve helps treasury download its cash information and cash projections from other systems and compile them into the daily position, which treasury can then use to plan its funding for the day. By doing this, Robot Steve has saved 1.5 hours per day for the team. This time can now be spent on tasks that perhaps cannot be automated, because they are not of a consistent or repetitive nature.”
At Microsoft, meanwhile, AI is a focus for Singh – with a particular emphasis on improving collections and accelerating cash application. “With AI, the conversation focuses on intelligence around dollar velocity. Treasury uses an ‘intelligent collections’ model – to study payment behaviour patterns among customers. The model predicts if there might be any erratic behaviour in terms of delayed payment or partial payment, and enables the collections team to call the customer beforehand and essentially change the customer’s behaviour.”