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Perspectives: Building the treasury of the future
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Treasury functions are evolving into strategic hubs, driving innovation, resilience, and growth in today’s complex business landscape. In this episode of HSBC Global Viewpoint, Patrick Zhu, Head of Cash Management Sales for Asia Pacific at HSBC, hosts a discussion with Ray Suvrodeep, Managing Director of Treasury Solutions Group at HSBC, and Larissa Murmann, Digital Chief HR Officer at Unilever International. Together, they explore how technology, real-time treasury management, and AI are reshaping the treasury landscape and empowering businesses to navigate uncertainty.
This episode was recorded during HSBC’s International Day in Singapore.
Disclaimer: Views of external guest speakers do not represent those of HSBC.
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Transcript
Podcast Introduction
00:00:00
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:12
Speaker
Make sure you're subscribed to stay up to date with new
Evolving Treasury Function
00:00:15
Speaker
episodes. Thanks for listening, and now onto today's show.
00:00:22
Speaker
Hi, hello everyone. My name is Patrick Zhu. I'm the head of cash management sales for Asia Pacific HSBC. I'm very excited to host this episode of ah Global Viewpoints, which will look at how the treasury function is moving beyond its traditional role of reporting and the forecasting to become a more strategic role with serious implications on growth, resilience, and in innovation.
Panel Introduction
00:00:50
Speaker
We are recording at the HSBC's International Day in Singapore, and we are very lucky to have two experts joining us today to discuss this topic.
00:01:01
Speaker
First, we have HSBC's very own Ray Suvadip, managing director, Treasury Solutions Group, Hi, Patrick. Great to be here.
00:01:12
Speaker
Thank you. And also sitting next to him is Larissa Mooman, Digital Chief HR Officer, Unilever International. Welcome. Thank you for having me.
00:01:22
Speaker
Really pleasure. Let's dive into the conversations right away.
Navigating Uncertainty
00:01:26
Speaker
Maybe the first question for you, Ray. At the current moment, there are a lot of uncertainties for many companies who are actually facing, ah including those geopolitical tensions, the uncertainty around tariffs,
00:01:44
Speaker
and also the interest rate uncertainty as well very recently, ah the volatility in exchange rate environments, especially with a number of elections going on as well.
00:01:55
Speaker
How are you seeing a companies reacting to those ah very long list of ah uncertainties right now? Thank you, Patrick. Firstly, great to be here with Larissa.
00:02:06
Speaker
um You know, this confluence of all the risk factors that you talked about definitely is the key word here is uncertainty, right? It's businesses are navigating uncertainty. And what we observe from various conversations that we have with our clients is that they're looking to do two things, staying nimble and staying resilient.
00:02:32
Speaker
If you can't stay nimble and you can't stay resilient, growth is out of the
Financial Resilience Strategies
00:02:36
Speaker
equation. So ultimately the objective is still driving and delivering growth for the shareholders, for the owners of the company, but then you have to survive and thrive within this age of uncertainty.
00:02:48
Speaker
So, you know, what we observe companies do is continuous continuously monitoring, you know, what is happening in the external world and making sure they have the financial resilience to absorb any unfortunate shocks.
00:03:04
Speaker
um you know Supply chain resilience is definitely top of the agenda for many companies who are doing a lot of international trade, lot of complex supply chain.
00:03:15
Speaker
In fact, one of the trade research that we did earlier and in the year across more than 5,000 companies, about 90% of these companies said that they're looking at some form of so supply chain diversification.
00:03:29
Speaker
and So that's definitely one on the agenda. And the second thing that we see often is there is a laser sharp focus on returns on capital.
00:03:39
Speaker
right So we are all aware of a bout of inflation that happened over the last three, four years, trade uncertainty, increasing input costs. All of these effectively is driving down operating margins of companies.
00:03:54
Speaker
And therefore, there is a heightened focus on cost discipline.
Technology in Treasury
00:03:58
Speaker
In fact, one of the more recent treasury research that we did across more than 500 corporate treasurers across across our global network and More than half of them are actually saying that they are focusing on operating cost reduction and and another half of them were actually saying, okay, they they' are focusing on some form of financial cost efficiency.
00:04:23
Speaker
The last point that I would make, irrespective of where we are on the business cycle, you know, use of technology to innovate, to drive business model innovation, business process innovation continues to be a secular theme.
00:04:38
Speaker
ah So these are a ah first few observations that comes to mind to answer. Thank you, Ray. you have ah There's a lot of information in in your answer. ah Let's just ah go a little bit deeper one by one. the first The first point that you made is that there's a lot of uncertainty.
00:04:52
Speaker
It requires a lot of ah close monitoring to understand what's going on outside world. ah But it takes either human being or some kind of systems to get the inputs from the outside world and the continuously, not one off, continuously understanding what's going on out of outside
HR and Digital Skills
00:05:08
Speaker
markets.
00:05:08
Speaker
From your, Larissa, from your profession, which is HR, do you encounter these requests from the business? Oh, I need people. I need to i need to have more people who are familiar with this kind of situation, who are experienced to be able to ah to be able to decipher all those uncertainties and a lot of things going on.
00:05:25
Speaker
And i also I've noticed that ah your title is a little bit unique as compared to a very many traditional HR heads. You are digital chief HR officer, right? Carrier digital.
00:05:36
Speaker
How do you ah foresee that ah the the wording of digital in the HR profession to be able to support the the business when it comes to you ask for more resources?
00:05:48
Speaker
No, I think every time you expand your business, the first request to HR will be give me more resources for that, right? Or every time you face a certain complexity yeah that requires manpower. And I think my finance, even in my area in Unilever International, is still a very manpower intensive function because many things are done in a manual way. And many of the finance employees, especially younger generations, they have to work very hard, very long hours, have to work through many manual files. Right.
00:06:15
Speaker
And it's not necessarily a generation that enjoys that. Right. So why is maybe our generation said this is like a
Real-time Treasury Management
00:06:21
Speaker
star on your uniform if you manage to get through this? Most of the younger generations actually told me, look, I actually don't want to do this work. Right. And what you can see with technology, humans are sometimes also not the best ones doing this type of very manual data intensive work. There might be an AI technology which is much more well versed to streamline the data, to automate the process or to detect mistakes in the data. right We also know as humans after a certain amount of hours you work on something, you are not that good at it anymore actually. know So I think in the treasury part there's many opportunities actually to bring technology
00:06:57
Speaker
to operationalize or kind of man automate this operational of the work, right? For example, fraud detection, I assume is something which is very easily With technology, you can detect patterns, you can maybe even forecast risks. Where has this ah fraud happened before? And so the machine is much better doing that and can do it at a very broad escape. Right now, my title. Yes, it's an interesting title. Most people will tell me that.
00:07:22
Speaker
um I think it's a purple, what I call a purple profile. So you are merging basically a technology profile with one of your traditional functions. I think in finance, the same thing will happen. You will need to get much more of these purple profiles in which have a FinTech background who actually can advise you on these technologies, who can tell you, I would use that technology over that one. These are the risks it actually has because every time you bring a machine in, you will need to give it data.
00:07:48
Speaker
And so that has certain risks. You need experts on your team who actually can detect that. And you need profiles who kind of understand finance very well and then can translate that to, okay, and that can what technology could do for me. It's not enough to just bring a technology profile in because they might not understand finance. So so it's not a simple yes answer to I'm going to give you the the resources.
00:08:11
Speaker
Neither the answers that I'm just going to give you a system of technology is so based on the understanding of the business needs and finding a solution for them as well, right? Yes, yeah. Okay, very, very good. right just yeah i mean Just to kind of supplement one thing, and we had lot of these interactions with our clients.
00:08:27
Speaker
The role of Treasuries is moving away from pure financial processes to driving customer experience, working with commercial team. As you know lot of these ah you know journey customer journeys are happening on digital platforms, lot of digital use use of digital payments, digital checkout, and so on.
00:08:47
Speaker
understanding of ah business processes, customer experience, hyper-personalization of client experience, all of these appreciation is to be there yeah alongside ah skill around technology and understanding of core treasury and finance functions.
Resilience and Leadership
00:09:05
Speaker
Yeah, well, that's a very high standard. um Coming back to your second point, actually resilience, which is really, really important. I think that we have been through a number of years where we see a lot of difficult environments situations and many customers, many companies manage to navigate through those difficulties. but not all of them managed to survive.
00:09:29
Speaker
ah So what's your advice of ah what's the secret sauce for being a Brazilian from a corporate treasury's perspective? I think, you know, I first try to answer the question a little bit differently in the sense that, you know, when we talk to a lot of corporate traders now, they are quite confident and that they' are they're able they will be able to navigate some these macroeconomic uncertainties, some geopolitical fallouts that may happen.
00:09:58
Speaker
simply because they had gone through that COVID period where it was a massive, massive tectonic shift when it came to financial processes, treasury processes. So to answer your question now, I think experience is definitely very, very important. like You need to have leadership within Anything and Treasury and finance is no different.
00:10:20
Speaker
You need to have leaders who have, you know, cut their teeth or, you know, have gone through that experience before, whether it's back 15 years GFC or five years, you know, COVID.
00:10:33
Speaker
So leadership is important. And in that leadership, you need to ah bring leadership. uplift people, their capabilities, their skill sets. So people management, harnessing talent, evolving people's people's talent is very important.
00:10:50
Speaker
But then the other good news is that in these several years, the technology landscape has also changed quite a bit. right So 10 years back, we didn't really talk about API, but now API is a mainstream you know topic of conversation with clients.
00:11:07
Speaker
The importance of API is really to provide that real-time information. If you don't have real-time visibility, you can't really be resilient enough. right You need to manage and risk in real-time these days and you need to have the technology for you to have that visibility.
00:11:25
Speaker
Exactly. So you you you touch a very important concept, which is real time. I heard this term very, very often now in terms of real time treasury management, real time solutioning, real time business management. so ah Tell us a little bit more about Because different people might have a slightly different interpretation on what does it mean to become a real-time treasury management. And I will come to you in terms of ah how do you, because if a treasury functions become real-time, how does HR functions become more nimble and to to borrow your words, on a high frequency basis to provide the needed supports for them as well.
00:12:01
Speaker
Yeah, I think there is no standard ah dictionary definition of what real-time treasury is. And you're right. As we talk to many clients, the notion of real-time treasury is quite contextual to their their business, their business model, their business um a structure.
00:12:19
Speaker
But if I were to take a common denominator across all of these client perspectives, what we see is that it's a it's a promise of a treasury which is having always available insights and be able to act upon them at speed when necessary.
00:12:40
Speaker
Which means that you are talking about a treasury who is highly responsive treasury, responsive to the needs of the business, responsive to the changes in external environment, not just in its intent, but actually the with the ability to act.
AI's Role in Treasury
00:12:56
Speaker
but So it's the execution capability on the back of real-time information and real-time insight that is key to real-time tragedy. um I think it's definitely where you know people talk about, or and give me some use cases of what real-time trade is, give some examples.
00:13:12
Speaker
And that's where we will see obviously differences between treasury, which is, let's say within treasury of an industrial company versus treasury in a digital economy, new economy type of company who's providing services on the digital platform.
00:13:29
Speaker
So if I take the example of a latter, let's say, imagine a ride-hailing company. right The driver partner has just finished his shift and then asking for a cash-out.
00:13:40
Speaker
So just goes into the app, press the cash-out button, immediately the cash-out instruction goes to the payments processing layer of the ride-hailing firm, It validates all the requests, everything, shoots out a payment instruction to its partner bank.
00:13:55
Speaker
The bank account in question doesn't really have cash at that time, but it pulls cash from the cash pool on demand, what we call as on-demand cash concentration. It brings the cash and then it funds the payment and the payment goes out to a real-time payment rail to either the driver partner's wallet or the bank account.
00:14:15
Speaker
The entire process is orchestrated and exist being executed in a matter of minutes, if not seconds. So this is an example of a real-time treasury, but this example is contextual to the particular business model of that particular firm.
00:14:29
Speaker
Exactly. So ah I simply can't imagine a human being sitting behind so to facilitate all the real time, oh regardless how smart the human being is, right? It's simply not possible task for the human beings to be able to produce those and also act upon those useful insights that you mentioned. Speaking about technology, nowadays, our world, everybody's talking about AI. And I heard your session, a very interesting session in the morning as well. I know you are a very strong advocate for AI.
00:15:00
Speaker
I assume that AI can help a lot to facilitate the real-time management as well. What's your take on this, maybe from ah yeah a little bit of an AI perspective? and So if you look, for example, at HR, and I think it's rightly what you said, you will look at processes and you will look at your data.
00:15:16
Speaker
right So in HR, there are, for example, many opportunities. And I think each of us as a leader can think in, what are the things I'm doing on a daily basis which actually I'm advanced of that, right? It doesn't need me, but I need to do it as an operational process. I have no other option because it's part of my job. But if I could give it to a machine, actually, then I could be doing other things, right? So mainly, for example, in HR, this is how I detected these are the areas where we have lots of opportunities because actually no one on on my team, even the lowest level, was actually fond of doing this. 24-7, an employee might wake up at 3 a.m. in the morning, has the question answers.
00:15:50
Speaker
There will be no HR person awake at that time, right so it would need to wait. So that is a huge, um I think, advantage in Treasury. Potentially have similar types of things. Fraud detection, for example, is something you want to do 24-7, right? Not only when humans are awake or when someone in a time zone.
00:16:07
Speaker
So there's potentially as a Treasury person, you can think in three, four, five things immediately. which potentially an AI could help you to do faster, more efficient and more correctly, right? Because a human is not able to to do that.
00:16:21
Speaker
Exactly. What I pick also from your just your comments is that ah it can be more personalized and tailored to individuals' so personal condition because you have more information around this person's profile, conditions, etc. So the answer will be more accurate instead of just being very generic. yeah That's additional benefit. Yeah.
00:16:40
Speaker
But of course, your data in the background needs to be well very well done and you need to train. So this agent we have, we are now consistently feeding it with new information and your user, the employee needs to give feedback. So some of the employees said, no, it's not working. It's not giving me the answer. yeah So you need to encourage your employees actually to say this answer was not good enough. So you give a thumbs down. okay And so the system then can actually learn or someone can intervene and say, it always gives a wrong answer to that. So we now need to train it to give the right answer because of course, the system is only as good as the what we call basically user stories we are feeding into it. If I can expand on your point and connect one of the examples of fraud detection, right? why The
Survey Insights on AI
00:17:20
Speaker
reason why fraud detection is such a mainstream service or use within Treasury today is because it's an embedded service provided by a trusted service provider.
00:17:31
Speaker
means either it's the bank who is doing this fraud detection or it's a TMS which has gone through full due diligence within the company's organization they've already you know validated all the data hosting and all of the requirements and within that application is this embedded AI which is fraud detection So I think if you look forward, definitely the adoption of ai or the use of AI within Treasury will be more realistic if the trusted service providers like banks, ERP, TMS providers, which are established enterprise solution provider, are able to embed some of the AI capabilities within its services. Yeah, yeah, yeah.
00:18:13
Speaker
Now, can can I pick a one more point from what you have mentioned at the very beginning? Ray, you mentioned that you have done a survey with 500 corporates. Yes. What are our corporate customers are telling us nowadays?
00:18:27
Speaker
What are the priorities, what they see from the markets? This is a survey called the Treasury Pulse. So we did it across 539 corporate treasuries across our global customer base.
00:18:40
Speaker
So obviously, ah one element was the one that I already talked about, which is efficiency, you know operational cost reduction, farm-wide adoption of technology. But specific to Treasury itself, um ah there are things around the fact that ah you know we are seeing varying level of automation and digitization within the treasury processes those which are more transaction heavy is where we are seeing more automation but companies who are ah ah doing more automation and digitization we when we look at the split of their treasury staff between operational activity and strategic activities we are clearly seeing a difference
00:19:22
Speaker
between those who are more digitized being able to focus more of their effort time on strategic activities rather than operational activities. So the benefit of technology, you know, thoughtfully adopted and implemented is actually paying dividends because, you know, we all talk about the strategic role of a treasure, right?
00:19:41
Speaker
But how do you achieve it? So the survey is clearly bringing out the fact as a means to achieve some of those objectives. ah We are also seeing ah payments, the the new payment methods, new payment features like, you know, we are talking about fraud, you know, validation, verification of pay before a payment instruction is being sent out, payment status monitoring, all these value-added features that is being introduced within the payment system by regulators actually seeing adoption and more importantly, in interest within the treasury and payments professional to make use of those.
00:20:18
Speaker
you know No discussion is perhaps incomplete in today's world without you know tokenization. So while we're seeing not low levels of adoption right now, but the interest on this topic is very high.
00:20:35
Speaker
That's what the survey is bringing out. On the topic of AI, what we're seeing in terms of use cases are ah things that you mentioned, data analysis, document analysis, you know, report reporting those things alongside fraud detection, cash flow forecasting, these are being some of the top use cases of AI.
Impact of AI on Jobs
00:20:55
Speaker
But it's also that about 70% of treasury professionals think that in the next three years, 25% of their jobs will be done by AI.
00:21:06
Speaker
Now that is not scary in the sense that ah the treasury teams are very lean, right? So globally, the average size of large global corporate treasury is just 10 people. is So going back to the strategic nature of treasury and how they can add value, if some of these repetitive tasks can be taken up by 25% of the bandwidth gets sort of ah feed up, presumably it will be deployed into more productive, more strategic use within for for the company. So overall a very positive picture. We are clearly clearly seeing use of technology being adopted, the direction of travel when it comes to digitization in terms of in-house banking structure, cash pooling, all of those pretty much is matching some of the hypothesis that we started off with when we commissioned the commission the research. yeah
00:21:57
Speaker
You spoke very well in terms of the percentage of the people's time and efforts on operational stuff, which usually today takes a lot of their time. And the shift towards the more strategic things, which ah which needs a more forward-looking view. And also it will be it will be better for human beings to do that to do make that decision.
00:22:17
Speaker
and And secondly, you also mentioned that ah the job a lot of jobs will be impacted. That's scary or not scary, depending on where you see it, whether you have a positive mindset of embracing it or you feel that it is a threat to job security.
00:22:32
Speaker
um ah But it's ah it's ah it's a question is that we cannot avoid, right? We cannot ignore. Larissa, what's your advice to those who are still very much worried about the impact of technology that is bringing to their job securities and the changing the job scope?
00:22:51
Speaker
Because change is not a pleasant thing for many. It's a human nature. so What's your advice to them in terms of ah how they are going to do, how they should deal with this kind of upcoming trend?
00:23:03
Speaker
I think for all of us, including HR, don't wait for your HR business partner to upskill you. Right. So I said to my employees, don't wait for me to build for you to plan what a finance person, a controller person, a marketing person now needs to learn in this
Growth Mindset and Innovation
00:23:18
Speaker
age.
00:23:18
Speaker
To be honest, I will be too slow. Right. Because I still have a lot of manual work. It's not completely automated my job. So I might not be able to get there fast enough, but you have access to all of the information I have, right? Because no one today exactly knows what will be the jobs of the future. But there's a lot of research you can actually do.
00:23:37
Speaker
So you just go and chat GPT and you start having a brainstorming conversation with that machine telling you what is out there, what are the latest skills reports for your profession? What kind of upskilling could I take? This wave is coming. Now we have the AI wave, next wave will be a different one, right? And when the Internet came, we had a similar kind of tendency. People who are able to fall in love with the idea of transforming themselves and enjoy that process rather than saying, oh, this is horrible.
00:24:03
Speaker
I now have to learn something new. I'm going to lose my job. I cannot do exactly any anymore what I did. The thing is that if you don't have this gross mindset, of and you have a fixed mindset about things need to stay the same, you potentially will suffer over the next one because now change is going to happen much faster. yeah So you need to adopt that kind of mindset of what kind of version could come out of me. So I recommend every human being on the planet to think about that.
00:24:28
Speaker
Because there will be some technology coming that might take over, but there will be also other things we can do. And most people you will see is that it's not that they love every part of their job.
00:24:38
Speaker
Most of us love certain parts and the other parts were actually okay if a technology would take it. So once you start ah falling in love with that idea, then you will automatically go and upskill yourself. The most impressive thing to me is that it is the mindset which makes a huge difference.
00:24:54
Speaker
I think to my personal experience, the moment i want to learn, I learn the most. It's not the corporates that are telling me that so these are the training courses you have to go through. i just tick those boxes. so So it has the attitude actually change, yeah actually brings to very different to outcomes.
00:25:10
Speaker
Now, some closing remarks for our listening audience. First one, Larissa. No, I think what you just mentioned, right, is a very important point of not being only internally focused, but really looking outside, especially for the big players. Sometimes we believe we are best at everything and there's many things we can learn from outside. What I learned on this journey is visit startups, find out what are they doing, see other industries, where are they advanced, right?
00:25:36
Speaker
and visit the best AI companies in the UAE, for example, right? There's lots of interesting things also to learn there. So Singapore is very advanced on it, but there's maybe also other places who can add value. That opens your mind and also you learn from their mistakes. So you don't have to do the same thing, actually. You can go actually through a faster learning curve with with whatever you want to implement.
00:25:58
Speaker
And I think keeping this openness as a leader in that growth mindset, especially when you are in an area which is more risk adverse where you will get many no's when you want to implement something. No, we have never done this. No, we cannot do this. This is too risky.
00:26:11
Speaker
How do you keep an open mindset to it? Because every no, you're closing a door basically. right So how you can actually encourage your teams to, yes, we must be risk-adward and we must manage that very well because we are the stewards of the company basically.
00:26:25
Speaker
But we also must keep that openness to where can we experiment and can do things and actually what you said, where can we get started? So from there, there's many conferences on AI now. I don't know how many are out there, right? Singapore, I think, has every week.
00:26:38
Speaker
Every week has at least two. And then there's panels and so on. So everyone is talking about it. There's very little people doing it, right? But you can see those who went into practicing and doing. Yes, they will make mistakes, but they are learning, actually, and they can talk from real. They better and better. Exactly, they get better. So you need to get yourself very quickly into that area of at least exploring and experimenting with something. You don't have to immediately take a risk.
00:27:00
Speaker
But I think making that step relatively fast so you can gain your own experiences and you can speak from from experience is very important.
Summary and Final Reflections
00:27:08
Speaker
Thank you very much. And you, Ray? Well, maybe I will summarize in three Ps.
00:27:15
Speaker
and First is passion. and We talked about passion. So, you know, in treasury leadership, passion is key. You know, you need to have the passion to drive innovation, to drive excellence.
00:27:27
Speaker
Second is people. And we talked about a lot of things today around people's skills, the future skills. which is very, very important. We heard from some of the trade leaders today in in terms of how important people strategy is.
00:27:41
Speaker
And the third is partner. So partners can be internal partners like ah HR working closely with trade in finance. It could be external partners like banks. You mentioned the experience that we bring to the table, the connection that we make from one client to the other client.
00:27:57
Speaker
as well as technology service provider partners. So look at these people these organizations as but as partners achieve to help achieve your ends. So it's really have the passion to excel using, you know you know, leveraging the people that you have working closely with the partners. That's basically my three Ps. Excellent, excellent.
00:28:20
Speaker
if If I may, I would like to just ah come back to the impact from the technology, in particular AI, on the human beings, on the on the workers. I heard somebody said one thing which reasoned me a lot.
00:28:35
Speaker
The treasurer will not be replaced by AI. but the treasurer will be replaced by some other treasurer who is augmented by AI. And similarly, I believe that the head of HR will not be replaced by AI, but the head of HR will be replaced by another human being, which is so good, much better at using AI, right?
00:28:56
Speaker
So that that shows that ah If you start the journey today, if you are open minded, start trying things, start from low risk things, moving on to more sophisticated, the higher risk things, you will be there and you will be likely ahead of the others. So the chance for those individuals to be more successful will be will be larger.
00:29:14
Speaker
Absolutely agree. Couldn't have said it better. Thank you very much. And I look look forward to our next episode probably will be done by the AI agents among the three of us. The clowns, exactly. With that, Larissa and Ray, I would like to say thank you to be with us on this ah episode episode of a Global Viewpoints. It has been pleasure speaking to both of you.
00:29:37
Speaker
And I have to thank the audience listening to us ah as well. i I hope you found this episode episode very, very insightful and useful. And ah ah make sure that ah please subscribe to the HSBC channel to stay connected with us.
00:29:52
Speaker
Thank you. Thank you for joining us at HSBC Global Viewpoint. We hope you enjoyed the discussion. Make sure you're subscribed to stay up to date with new episodes.