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Treasury Beyond Borders: How Asia’s treasurers are redefining risk and liquidity management
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This episode is also available as a podcast, search "Global Viewpoint" on your preferred podcast player to watch, listen, and subscribe. From shifting supply chains and tokenisation to the meteoric rise of real-time payments, Asia is pushing the boundaries of treasury best practice. In this instalment of TMI’s Treasury Beyond Borders series with HSBC, Sridhar Narayan and Yvonne Yiu reflect on how treasurers are responding – and explain why the region has become a leading light for financial innovation.
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Transcript
Introduction to HSBC Global Viewpoint Podcast
00:00:01
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.
00:00:13
Speaker
Make sure you're subscribed to stay up to date with new episodes. Thanks for listening, and now onto today's show.
Focus on Global Treasury Amid Geopolitical Shifts
00:00:22
Speaker
Welcome to this special TMI podcast series in collaboration with HSBC called Treasury Beyond Borders, Balancing Risk and Opportunity Through Global Growth. I'm Eleanor Hill, Editorial Consultant at TMI, and over the course of this series of podcasts, I'll be exploring how global treasury is evolving amid geopolitical shifts and digital transformation.
00:00:44
Speaker
Across the episodes and with insights from HSBC experts, we'll dive into key themes both globally and across different regions, from managing risk in uncertain markets to leveraging new trade corridors and emerging technologies.
Episode Focus on Asia with HSBC Experts
00:00:58
Speaker
And for today's episode, focusing on Asia, I'm delighted to be joined by Shridhar Narayan, who is Head of Corporate Sales Asia, Markets and Security Services, HSBC, and Yvonne Yu, Head of Global Payment Solutions, Greater China, HSBC.
00:01:12
Speaker
So welcome both of you. It's really great to have you here. And there's so much going on in Asia that I know we've got loads to squeeze into this podcast episode, but Shruda, let me come to you first. Maybe we can talk a little bit, ah some background. some bigger picture on supply chains and all of the shifts that are happening. So this isn't a new phenomenon. It's something that we've been seeing a fair bit of in recent years.
00:01:37
Speaker
But how would you say that it's different this time round? What are the key issues that corporates are facing? Give us a sense of what you're seeing on the ground, what you're hearing from clients. That would be great.
Changes in Corporate Strategy Since 2016
00:01:50
Speaker
Hi, Eleanor. Thanks for having us over. So it's a great question to start off the conversation. Historically, corporates have been guided by the conventional economic theory of comparative advantage, which emphasizes on where can I produce my goods efficiently at scale and how can I distribute it effectively to all my consumers?
00:02:11
Speaker
Now, this approach was focusing on cost effectiveness, efficiencies, and it allowed companies to maximize their production capabilities, distribution capabilities, and reach their products across global markets seamlessly.
00:02:24
Speaker
But since 2016, there has been a significant shift in the corporate strategy. And the one aspect that got introduced into decision making is resilience. This became a critical factor.
00:02:37
Speaker
This was largely driven by the expected and perceived geopolitical risk. And it was also caused by, of course, the disruptions caused by the COVID pandemic. yeah Companies began to realize the importance of having very simply backup plans.
00:02:51
Speaker
And they started spending time and effort trying to figure out how to introduce continuity to their operations. And we saw strategies like China plus one, near shoring, French shoring and on shoring. It all gained prominence.
00:03:05
Speaker
These strategies were not motivated by economic factors. The key need that the corporates were trying to address was alternate sourcing channel to mitigate one risk, which is resilience. And this, I would like to call it phase one.
00:03:21
Speaker
There were very clear objectives and there were consistent applications of resilience focus variables. And the key beneficiaries, as we all know, were South Asia, specifically ASEAN and some countries like Mexico, et cetera.
Impact of US Tariffs on Asian Businesses
00:03:33
Speaker
Phase two, I think what we are living in currently, businesses are grappling with the challenges posed by the tariff measures announced by US, simply put, the first order and the second order effect.
00:03:44
Speaker
Historically, the Asian exporter community had benefited from low or very low single digit tariffs from the US for most of the products. But the recent tariff increases with its baselining around 20%, give or take, have really introduced some economic challenges.
00:04:01
Speaker
You also need to consider the effective U.S. tariffs have become, in most cases, 3x to 4x of what it was yeah before. yeah And as you can understand, it impacts profitability, affordability, and in some cases, even sustainability of the very businesses that you are running.
00:04:18
Speaker
So unlike phase one, which was driven by resilience, phase two is driven by tariffs. It has been made more complicated by one simple element, uncertainty. There is a significantly higher degree of uncertainty.
00:04:31
Speaker
Let's take China as an example. We started with 10 percent, then it went to 50 percent, then above 150, and now we are close to 30 percent. Even now, when the base tariffs for most economies have been announced 10 to 20 percent for most Asian countries, for example, there is still a lot of uncertainty around the final outcomes for two of the largest economies in Asia, China and India.
00:04:51
Speaker
And even outside of that, if you look at some sectors, take automobiles or semiconductors or copper or steel, we still don't know where the sectoral tariffs will land over and above the base tariffs.
00:05:02
Speaker
And let's not forget, we spoke about China plus one. ASEAN was a big beneficiary in Asia. And the one variable that is under question now is the definition of transshipment. It is still not very clear how transshipment is going to be defined, what goes into the calculus of defining transshipment.
00:05:19
Speaker
So in this very, very uncertain environment, obviously companies are facing difficulties in planning effectively. So the people who in the phase one had established alternate supply chains are perhaps finding it a bit easier to navigate phase two.
00:05:36
Speaker
But for people who entered into the ring in phase two, clearly things are very, very different. So what do I do with my business? Should I transfer some of my supply chain from one place to the other?
00:05:47
Speaker
Should I even commit some capital expenditure in pursuance of that theory? Because I don't know what tomorrow holds for me. So the one message I would say is that it's going to be difficult. It is challenging.
00:05:58
Speaker
But the only thing I'll say is that if you're a corporate finding yourself in that situation, you are not alone. Oh, absolutely not. I'm sure many of the listeners will be thinking, yes, this sounds very, very familiar.
00:06:11
Speaker
But Shreda, we'll talk a little bit more later about some of the things that clients are doing around the tariffs and around the bigger risk management and supply chain
Real-Time Payments and Digital Innovations in Asia
00:06:19
Speaker
kitsch. So Yvonne, we've got real-time payments and digital banking that are redefining cash management at the moment. And we often look to Asia as leading the way in that space. There's a lot of rapidity. adoption of instant payments and all of these new digital banking solutions and innovations.
00:06:37
Speaker
So maybe just share with us your observations of some of the latest developments, what you're excited about, what you're hearing from clients. Certainly, you're right. Asia has been at the forefront of digital finance innovation, um particularly with the rapid expansions of real-time payments and the wild adoptions of various kind of payment methods such as e-wallets, right?
00:07:01
Speaker
Yeah. Now, this is driven by the always-on, always-connected economies with consumer increasingly favoring digital channels for the transactions, prioritizing speed and convenience.
00:07:13
Speaker
Now, the opportunities in e-commerce in Asia, we are anticipating to reach around 3.8 trillion by 2028, which is amazing, right? how Now, the critical questions for business is their readiness to leverage this trend through digitizing the front-to-back business model and operations.
00:07:31
Speaker
Now, in Asia, what we have observed is substantial progress in the consumer-to-business digital journey, which was propelled by RTP developments, such as the cross-border connections between Hong Kong faster payment systems and Thailand's PromPay with the mainland RTP system, which we have just recently deployed in Hong Kong.
00:07:49
Speaker
yeah We also have a lot of innovative digital solutions developed by banks and fintech. Now, I just want to share for HSBC, we have made significant investment in building the RTP infrastructures across the region.
00:08:04
Speaker
Like, you know that we basically have got this deployed in almost every market in Asia, like around 15 to 16 them. We have also introduced various digital solutions to support our clients' growth ambitions.
00:08:16
Speaker
Now, for example, we've launched a digital merchant service in Hong Kong, and which is to enable business to consolidate various digital payments like cards, RTP, e-wallets into a single scalable and robust robust system, which is capable of handling high volumes of APIs and throughput.
00:08:35
Speaker
Now, this service is already operational in Hong Kong. And it's set to launch another market later this year. Now, we are also very cognizant that we need to support mobile commerce because this is why accepting in Asia.
00:08:48
Speaker
And HSBC, we have innovated in the corporate card space and pioneered the launch of the Hong Kong first mobile virtual corporate card. This provides businesses with the convenience of integrating their cards with mobile payments and offer flexibilities in card issuance, enhanced controls, and seamless transactions for both online and in-store purchases and for their supply payment.
00:09:13
Speaker
Super stuff. So it's great to hear about all of that innovation that's going on. And I know I think half of the press releases that come into my inbox are from your Asia team and there's always so new developments. But it'd be great to know about the impact of all of this on Treasury
Role of Treasurers in Digital Transformation
00:09:29
Speaker
teams. We've got 24, 7, 3, 6, 5 liquidity now.
00:09:33
Speaker
Everything going on, so much more data. So how should they be preparing for this shift? Yeah, so in today's the digital transformation landscape, the role of the treasurer actually have evolved beyond the traditional liquidity management.
00:09:48
Speaker
Now, they are now central to the steering of the company's digital usual transformations, making data-driven decisions in order to enhance the strategic importance within the organizations.
00:09:59
Speaker
So as a result, treasurers are looking for more than just cash management solutions from the banks. They need a comprehensive perspective on the transformation strategy. It is crucial for their banking partners to keep them informed about the latest trends in development so they can stay ahead and plan effectively.
00:10:16
Speaker
And what about the e-commerce side of things and the real-time payments specifically? Because speak to quite a few treasurers who are like, I might like to receive money in real time, but do I want to pay money away in real time? and Tell us a little bit what you hear and the impact on treasury operations.
00:10:32
Speaker
Yeah, this is quite an interesting dynamic, right? Because like you want to receive the money quicker and you want to pay later. But then that's the transformation of the journey, right? Because with the rise of the e-commerce and LTP, all the treasurer must ensure that banking partners have the capabilities to provide end-to-end solutions for continuous payments, collections, and fund flow. I think having a deep liquidity of the bank is is very important because you need to ensure that the money can float 24 times 7 is pretty much.
00:11:02
Speaker
yeah Now, data availability for decision making, reconciliations, and forecasting is absolutely essential. Now, some treasury teams will need to expand the digital and technical knowledge to support the company's transformational journey as well.
00:11:17
Speaker
So we're talking like the skillset required for treasury professionals actually has been evolved, right? Also, as RTP volume increased, Initiative-like project assets are expanding across different markets and that they are utilizing ISO 222 standard.
00:11:36
Speaker
This ensures seamless communications between different domestic LTP systems. Additionally, the use of digital distributed ledger technology, DLT, and the growth of digital asset, CBDC, along with the introduction of stablecoins, have sparked interest in exploring new treasury management applications.
00:11:56
Speaker
Now, these advancements are paving the wave towards real-time treasury. Companies like Ant International are leading the wave by executing real-time tokenized transfer between blockchain wallets in Hong Kong and Singapore.
00:12:11
Speaker
This innovation offers 24 times 7 access to secure, digitalized liquidity, enhancing financial visibility and control.
Regionalization of Supply Chains in Asia
00:12:20
Speaker
brilliant stuff yeah the ant international story i've been following very closely and we recommend our listeners to have a little look at that online so it's very interesting or what's been happening there if on just really quickly any other challenges corporates face in digitization and maybe anything you've seen in terms of how they address them Yeah, I think it goes without saying that like corporate must tackle cybersecurity and geopolitical risks by blustering their risk management framework.
00:12:49
Speaker
Strategies such as risk diversifications and talent developments are essential to address these challenges effectively too. Yes, and no doubt we'll get into those a little bit more later in the podcast. But Shredda, let's bring you back in and talk a little bit more about the supply chain shifts. So they're becoming more regionalised. We've got more companies localising operations and sourcing within Asia, as we spoke about at the top of the podcast.
00:13:15
Speaker
What are the key themes driving this shift in supply chain conversations? And which countries do you see on the rise here? Are there any specifics, any hot tips? You know, we spoke about the prevalent uncertainty in the markets and how the confidence in decision making is obviously low in yeah an environment ridden with uncertainty. So the first thematic we see is wait and watch.
00:13:41
Speaker
To not do anything, just absorb. But for the few conversations that we have picked up outside of the wait and watch, the first is on shoring. And corporates, where possible, trying to enter the U.S. market in any capacity or increase the proportion of the U.S. produced goods in their supply chain.
00:14:00
Speaker
Now, we have picked up some conversations, Asian shipbuilders, for example, talking about forming joint ventures in USA. We have seen Asian electronics companies starting or in some shape or form where they already had a presence to expand their production in the USA.
00:14:17
Speaker
We have seen automobile manufacturers in Asia boosting and their U.S. output. We have also seen wine exporters from Asia, actually Asia-Pacific to be clear, relocating some part of their supply chain, specifically bottling activities into the U.S. to gain economics in the process.
00:14:36
Speaker
The second theme is pretty intuitive that if my current supply chain setup is not going to work, can I look at alternatives ah based on relative tariffs?
00:14:47
Speaker
Can I align my supply chain with countries that have a favorable tariff? As simple as that. So on this thematic, we have picked up conversations from an Asian optical instrument manufacturer who's shifting production or planning to shift production from Mexico to Thailand.
00:15:03
Speaker
A garment manufacturer talking about, you know, operations moving from ah Hong Kong to Bangladesh, Cambodia and even Vietnam. Yeah. We have heard of a pharmaceutical company from India proposing to use Thailand as their base and textile al manufacturer trying to shift operations from Thailand to Egypt, as you know, who which has a base tariff of 10%. Yeah.
00:15:28
Speaker
But beyond these two themes on the supply chain side, corporates are also wondering, is it possible to de-risk themselves from having a single large buyer?
00:15:40
Speaker
Can I look at markets outside? So we have seen an Asian furniture manufacturer trying to diversify their sales away from U.S. into European Union and also some parts of Asia itself.
00:15:53
Speaker
We have had conversations where an Australian garment company is transferring inventory to EU and also some textile players seeking new markets in Africa, for example, and also EU. So EU is coming up quite often in the conversation.
00:16:08
Speaker
I would round off by also saying there are potential conversations around opportunities as well. Remember, it's not the absolute tariff that your business and supply chains are facing. It's what your competitors are facing as well. So as the new tariff rendered my supply chain more competitive compared to my competitor. Yeah. Of course, these conversations are quite few. And I think people are focusing right now on getting their shop in order with the new tariff ridden world.
00:16:38
Speaker
But I'm pretty sure this topic will also gain traction in due course. Oh, absolutely. It's not going to be going away. But Sridhar, from all of those conversations that you've had, and it sounds like clients are coming up with new ways to think about things, think about how they operate in this new tariff world.
00:16:58
Speaker
What would be the key considerations for corporates? If I put you on the spot to give us a shopping list of five or six things, what would those considerations be and why?
Navigating New Tariffs and Supply Chain Changes
00:17:08
Speaker
So I would probably split my answer into two. I would call it primary and the second order. Right. So on the primary side, I think the first and foremost is you have to allow the analysis of the impact of the new tariff to your own supply chain.
00:17:23
Speaker
How are you faring independently and comparatively? One has to reassess the competitive position and calculate in very simple terms the landed cost of your product into the hands of the consumer.
00:17:35
Speaker
And how does it fare compared to history and compared to competition? There is a higher cost, right? They have to figure out who's going to bear the cost. Should the manufacturers absorb? Should the people in the ecosystem all the way through the customer, should they absorb some part or should the customer take part of the cost?
00:17:52
Speaker
There's no formula. You have to evaluate and find your way through to the right balance. One has to consider contingency plans. What should I do if nothing works? Do the current tariff world and the current country of origin rules allow me to diversify to a place which gives me relative advantage?
00:18:10
Speaker
And keep in mind, the operational load has increased for the corporates. Compliance-wise, documentation-wise, regulatory filing-wise, documentation-wise, These are all on the upside now.
00:18:23
Speaker
One has to consider how am I going to deal with these steps as well. And don't forget, most companies have shareholders and boards to inform and keep them updated on A, what's happening, B, what's your plan and C, continuously update them on the progress of that.
00:18:41
Speaker
The second order part are far more linked to our BAU activities as a treasurer. New countries expose your businesses to new currencies and regulations. They bring in new variables in the form of new foreign exchange risks, newer interest rate risks. And this requires reasonable amount of navigation.
00:19:02
Speaker
I want to make a point here. It's not just about...
Assessing Enterprise Risk Amid Market Changes
00:19:04
Speaker
absolute tariff or the absolute baseline tariff? Because if that was the only criteria, you would probably say China at 30%, Malaysia at 20%. So Malaysia is 10% better than China, right?
00:19:16
Speaker
But what if I told you that over a two-year period, The Malaysian Ringgit adjusted for inflation has appreciated as a currency by approximately 12%. This is what we call the R-E-E-R terms.
00:19:30
Speaker
Now, does it seem so easy now? It doesn't, right? Keep in mind, volatility has gone up. Currencies have moved 2 11, 12% since April. Commodity prices have gone up and down. Freight rates have reacted.
00:19:43
Speaker
The cost of taking a wrong decision or no decision has gone up. Now, when you go into newer markets, you have to consider what happens to your working capital cycle.
00:19:55
Speaker
The tenor of the cycle, the quantum of the cycle, both could be higher and longer. You have various financing options to consider because you are in a new market. Should I borrow at my home currency? Should I borrow in a different currency? Are there exchange risks involved?
00:20:12
Speaker
There is also a conversation about the tools that have been historically using to mitigate my financial risks. Are they adequate? Are they fit for purpose? yeah Will they serve my needs now?
00:20:23
Speaker
And last but not least, I want to talk about this aspect of enterprise risk and resilience. And this is where the treasurer has to wear the CFO or the CEOs hat and ensure that the risks that are there and that can be mitigated is one story, but there will be residual risks.
00:20:41
Speaker
And does the enterprise have enough buffer to take care of the residual risks? And this is the resilience of the corporate that I want to bring into the picture Yeah, absolutely. So much to consider, Shridhar. Thank you for that.
00:20:53
Speaker
So, Yvonne, let's bring you back in here because Shridhar mentioned the liquidity side of things. That liquidity risk obviously remains a top concern for corporates. We've got interest rate risk on top of that.
00:21:04
Speaker
But in Asia, the financial market cycles are... ah different. So tell us a little bit about how companies are adjusting their approach to things like debt financing, liquidity management, working capital. What are they doing to day resilient? As Sridhar said, we really need that resilience happening behind the scenes. So give us a flavour of what you're
Managing Liquidity and Interest Rate Risks in Asia
00:21:25
Speaker
seeing.
00:21:25
Speaker
Yeah, this is a very topical point that we would like to gather more information from our clients. So that's why we have interviewed 460 treasurer's practitioners across eight Asian market and produced a report called HSBC Redefining Treasury 2025.
00:21:43
Speaker
Now, from that report, we have got the insights that the critical importance of managing treasury functions under this fluctuating foreign exchange and interest-based environment.
00:21:55
Speaker
Now, it's not a surprise that about 60% of our clients in Asia are feeling the heat from market volatilities. Treasurer are stepping up the game, just like what Shreda mentions, because they actually need to play a more strategic role in fostering growth and managing risk, especially with the added pressures from the high interest rate and ongoing global trade tensions.
00:22:16
Speaker
Yeah, of course, Yvonne. But what does that mean for Treasurer's top priorities as a result? You say they're stepping up the heat. What are they looking at specifically? Yeah, so amongst all the subjects that they've talked about, there are three main points that they have put as their priorities.
00:22:31
Speaker
Now, the first one is active risk management. Treasurers are focusing on active risk management to safeguard profit margins. They are employing tools like derivative, natural hedges, and multi-currency cash flow planning to maintain stability despite interest rate and ethics fluctuation.
00:22:51
Speaker
ah One of our clients mentions that ethics hedging and cross-border cash pooling are essential for their business. Now, the second priority is leveraging internal cash.
00:23:01
Speaker
Now, our clients are innovatively using internal cash through in-house banking and cash pooling to achieve self-funding and address liquidity risk. There are also diversifying funding sources beyond the home market, which is crucial in regions and locations with capital controls, like for example in China.
00:23:21
Speaker
Now, establishing financial hubs in locations like Hong Kong and Singapore is part of this strategy. So the third one will be the role of real-time data and AI, which is transforming cash flow forecasting and liquidity management.
00:23:35
Speaker
Now, these technologies enable Treasurer to anticipate risks and navigate volatility with greater confidence. Notably, over 77% of Treasury professionals view AI as an increasingly valuable asset.
00:23:50
Speaker
Shredda, let's bring you back in and get a sense of everything that's going on here. There's so many financial risks. Yvonne's described a lot of them and some of the wider risks as well. What are the key considerations here for corporates when they're dealing with these? And what would you say in just fairly simple words? How can they go about thinking about what they should be doing here to make sure that they're keeping on track?
00:24:13
Speaker
Look, we can keep defining uncertainty in degrees, but uncertainty is a common aspect in business. And um why go far when we saw how corporates reacted and acted during the massive disruption that they faced during COVID, right?
00:24:26
Speaker
So the complexity has increased, surely. and The variables are fluctuating, but the building blocks, I would say, have remained more or less the same. The first stage is building awareness of what are the risks to your business in this change landscape.
00:24:39
Speaker
The second step is that of quantification of the risks, especially financial risks. The third step is asking yourself whether these risks can be mitigated using mitigation tools.
00:24:52
Speaker
And the last part is wearing on the enterprise hat and evaluating after all the mitigation activities have been done, the residual risks that you have, is that something an enterprise can withstand? Do they have the adequate buffers?
00:25:06
Speaker
I would put it as simply as that. Yeah, that makes sense. Just coming back to you know the mitigation tools and you mentioned hedging there. We've spoken about FX exposure already and we've got people going into new countries. Therefore, they've got these ah new currencies to deal with.
00:25:22
Speaker
Tell us a little bit more about what's driving the uncertainty around FX at the moment and how treasury teams are adapting their risk strategies to manage this currency volatility that's out there.
Adapting to FX Market Volatility
00:25:34
Speaker
yeah So sort of geopolitical and trade disruptions such as what we are seeing right now, tariff events, they have consistently heightened volatility in the currency markets. And the trend has been pretty pronounced in the recent years. But especially since April this year, we have seen that at an extremely heightened level.
00:25:53
Speaker
I'll just throw a few data points just to elaborate what I'm talking about. The dollar index, if you talk about currency, has dropped by about 7% broadly. And against that, currencies like Malaysian Ringgit and Thaibaut in Asia have appreciated by over 5%.
00:26:09
Speaker
Swiss franc, Brazilian real and Mexican peso have approximately appreciated by 10 to 12% in the same period. Take commodities. Oil has fallen by nearly 10 percent, but gold, on the other hand, has surged over 12 percent against the dollar.
00:26:25
Speaker
Now, interest rates not to be left behind. There are two stories there. With the weakening economic outlook, most countries, the policy rates and the short end of the interest rate curve are dropping down, whereas the fear that economies will have to spend more at a government level are pushing the yields in the long run up.
00:26:44
Speaker
And also there is divergence amongst key central banks as well. Like Japan and EU are slightly towing a different line in terms of monetary policy compared to some of the other large economies. So the macroeconomic situation remains unsettled. And in this context is where we see foreign exchange and interest rates as critical variables that corporates have to deal with.
00:27:02
Speaker
I would like to reiterate at one point here, which I mentioned that the value at risk per unit of risk has significantly increased in this period.
00:27:13
Speaker
In summary, what I have seen is there is a noticeable increase in the quantum of hedging yeah and the tenors of hedging that corporates are carrying out.
00:27:24
Speaker
And have also seen amongst a lot of our corporates, they have moved away from traditional hedging tools, linear products like forward contracts to more bespoke and customized FX options products to manage their risks.
00:27:40
Speaker
The corporates are increasing their discussions of investing in data and analytics, spending more time in understanding and raising the awareness of the risks. They are grasping with the liquidity and volatility dynamics of different markets, as you said.
00:27:55
Speaker
They are re-evaluating their historical patterns of hedging and the duration of hedging. And they are certainly exploring Risk Mitigation Act strategies going beyond the conventional financial market tools as well. Yeah, and that makes complete sense in this environment, you know,
00:28:10
Speaker
Not just sticking with what you know and those vanilla products, but looking what's more suitable. And also there's, like you say, there's more data out there. There's more technology out there to help people. Absolutely.
00:28:21
Speaker
Let's dive into that a little bit. Yvonne, maybe you can give us a few examples of how the bank's investments into technology ah helping corporates and anything else you're seeing is it from a tech point of view from treasurers that might be interesting for our listeners.
Role of Technology in Risk Management
00:28:36
Speaker
Yes, we have been actively developing a suite of tools to support our clients. Now, we understand that treasurers require real-time data to make informed decisions, so we offer APIs for transaction inquiries and account information, assisting companies like UliLiver in visualizing the transaction details across all their accounts around the world.
00:28:58
Speaker
Now, to address ethics and currency risks, we understand that businesses are concentrating on optimizing liquid liquidity within the structure. Now, this includes the use of automatic cash concentration solutions to mobilize their cash balances and liberate trapped cash across borders, and refining treasury investment policy to maximize returns.
00:29:21
Speaker
We also believe that robust tools are crucial for corporates to achieve just-in-time liquidity. So in markets where ethics controls are prevalent, HSBC has introduced data-driven tools to streamline the regulatory reporting process to enable straight-through processing.
00:29:37
Speaker
Now, for example, in India, Indonesia, and Thailand, we have launched Unitransact, which is a digital platform designed to streamline foreign currency management and the cross-border payments process from start to finish, including ethics booking and document submission.
00:29:53
Speaker
In China, we have introduced a service called SpeedX, which is designed to streamline regulatory reporting process that cuts cross-border transactions times by up to 75%. Wonderful stuff. Well, there's an awful lot going on, but Shridhar, I'm sure you've got more for me. What are you going to add to that?
00:30:11
Speaker
I doubt if I can add much to what Yvonne said, but I'll take my shot at it. No, we spoke about how corporates are increasingly spending a lot of time in understanding, calculating and planning risk mitigation strategies, right?
00:30:23
Speaker
So the good news, if there was one, is that technology is really, really helping these processes and making the tasks for a corporate I would say bit easier, a bit more efficient and perhaps a lot more accurate.
00:30:36
Speaker
HSBC has made significant investments to support our clients in this area and I want to call out two such examples. The first is AI markets. Now, this is our digital platform that leverages advanced AI to deliver real-time market insights, and analytics, and tools to the corporates to help them make informed decisions and manage risks effectively.
00:31:02
Speaker
With over, I would say, ah close to 200 clients which are onboarded into this digital platform, they are benefiting from its features because it aids them in understanding effects, rates, and options pricing.
00:31:16
Speaker
It allows the corporates to access our in-house research. It also allows the corporates to perform analytics on the risks that they are running and the market variables. And it also helps the corporate evaluate liquidity across various asset classes.
00:31:32
Speaker
The other piece of investment that we have done and I would like to call out is auto hedge. This is an automated FX hedging tool or a product which really simplifies the FX exposure management for a corporate.
00:31:46
Speaker
Simply put, it reduces the operational burden for corporates. It allows the corporates to seamlessly manage the exposures and the hedges in one place based on the corporate's own chosen defined rules and principles that they can embed into this program. Mm-hmm.
00:32:04
Speaker
So yes, technology is important and technology helps the corporates and HSBC has been investing in the space to help the corporates. Wonderful stuff, Frida. Thank you for that. Yvonne, final question to you, and then we will wrap up, although I know we could go on all day, I think, in this podcast because there's so much to talk about. But with the pace of change in intra-Asia trade, supply chains, all of the digital finance that we've spoken about, what's the key takeaway for Treasury teams looking to place themselves in the best possible position to stay ahead?
Challenges in Trade Environment and Treasury Strategies
00:32:39
Speaker
I know it's hard to whittle it down.
00:32:41
Speaker
Yeah, this is a difficult question. So I think business today are indeed facing a challenging trade environment. Global trade policies such as tariffs are significantly influencing trade and investment balance across countries and industries.
00:32:57
Speaker
This is particularly evident in rapidly growing regions like China and Atheon. As these trade patterns evolve, companies are compelled to assess their supply chain, seek new partners, and explore fresh markets to adapt effectively.
00:33:12
Speaker
Now, based on our discussions with clients, Cash is a vital resource and managing it effectively is crucial. Now, one core focus is to preserve capital by mitigating risks associated with cash.
00:33:27
Speaker
This involves managing exposure to country risks, currency depreciations, and counterparty defaults, ensuring cash availability for seamless operations.
00:33:39
Speaker
Real-time data is essential for supporting 24-7 business operations. Now, and another thing is to mitigate ethics risks and enhance cash visibility. company might centralise operation using in-house bank structures or adjust invoicing currency.
00:33:56
Speaker
This simplifies ethics management and centralise payments for group entities. And presumably those advanced forecasting tools and things play quite a big role here and maybe something that our listeners should think about looking at for the future.
00:34:11
Speaker
Yeah, advanced forecasting tools and real-time data are pivotal for predicting and managing risks under uncertainty. Now, building future-oriented treasuries involve creating a digital treasury that provides a global real-time view of cash positions and financial exposure.
00:34:30
Speaker
According to HSBC's Corporate Risk Management Survey, about 55% of CFOs consider cash flow forecasting and monitoring as key components of treasury management.
00:34:42
Speaker
Now, interestingly, over 93% have experienced losses due to inaccurate forecasting. So by leveraging data analytics with external variables and AI tools, treasury can gain a clearer understanding of liquidity and funding needs across various scenarios.
00:35:00
Speaker
Yeah, I'm sure 93% of the listeners will identify with that as well, Yvonne, but it's great that there's all of this technology and data that's becoming more available and more usable. So thank you for that.
00:35:13
Speaker
Trida, let's come across to you. Any final takeaways for our listeners? Thanks,
Importance of Partnerships in Unpredictable Times
00:35:18
Speaker
Elinor. We spoke a lot about technology, but I want to that in these highly volatile times, I would even go ahead and say uncharted times.
00:35:27
Speaker
Beyond technology, I would say reach out to us, speak to us. We have our teams with rich experience in each of these 18 critical markets in Asia. We have a presence on the ground and we can be your able partner.
00:35:40
Speaker
as you seek to navigate this highly, highly unpredictable times. And a simple message to all of you is reach out to us. brilliant stuff. Thank you, Shreda. It's all about partnership and people and knowledge sharing, which is exactly what we've done through this episode today. So thank you both ever so much for joining us. That's a wrap for this episode of Treasury Beyond Borders.
00:36:04
Speaker
Thanks to everyone who tuned in as well. We hope you enjoyed the discussion as much as we did. And be sure to subscribe, stay updated on our other episodes, and also watch out for the articles accompanying this series.
00:36:17
Speaker
But for now, thanks again to our wonderful speakers and thank you to everyone for listening.
00:36:25
Speaker
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.