The latest Asian Banker annual survey of cash management trends demonstrates the rapid digitalisation of treasury in Asia which was gaining traction even before COVID-19 disrupted the business routine. The pandemic has fasttracked the demand for technologies that eliminate manual processes and drive electronic treasury transactions. The businesses and consumers deviate from cash in favour of payments via contactless cards, mobile and online, so the demand for real-time payments increased. This accelerates the treasury’s quest to have full visibility over cash positions and efficient access to their regional and global liquidity lines.

Mobile payments are becoming ubiquitous as businesses transition from a business-to-business (B2B) model to a business-to-consumer (B2C). This shift towards e-commerce delivery channels is paving the way for new business models. Banks have responded by working directly with technology service providers to jointly build application programming interfaces (APIs) and end-to-end integrated digital cash management solutions that cater to today’s treasury needs. Banks continue to invest in open APIs as reflected by 33% of respondents harnessing technologies to provide the last mile connectivity.

The recurrent theme of regional corporates going global as part of their network expansion is driving a surge in cross-border collaboration. This comes despite disparities in local regulations as governments, banks, fintechs and payment service providers (PSPs) work together to integrate corporate platforms with financial services seamlessly. Given the launch of instant payment clearing infrastructures in Asia Pacific (APAC), in-bound investments in Southeast Asia (SEA) and One Belt One Road (OBOR) flows, 22% of respondents noted new business opportunities from the emergence of real-time payment systems.

Banks wade deeper into applications of APIs

APIs continue to be relevant in digitalisation of treasury services. With the growing demand for instant payments and real-time confirmations, banks have developed solutions and platforms that will help clients transition seamlessly to a cashless ecosystem.

United Overseas Bank (UOB) has deployed API services in Singapore leveraging process efficient and costeffective pay-and-receive channels. OCBC Bank, on the other hand, partnered with fintech companies to deliver customised industry solutions through its first-to-market transactional API solutions.

The Indian government has taken a proactive approach in promoting fintech and developing a support infrastructure. This includes a set of APIs such as Aadhaar, the unified payment interface (UPI) for instant payments, electronic know-your-customer (eKYC) using adaptive biometric authentication. The digitalisation of financial services through Aadhaar has led Kotak Mahindra Bank to extend these capabilities quickly to all customers in areas including cash management services.

Yes Bank propelled the use of API technology to enhance the collection and validation process and migrate more clients into straight-through reconciliation (STR) through web services integration.

Banks are forging digital partnerships with key non-bank, emerging e-commerce, and third-party payment platforms such as Grab which has made significant inroads into the bank-dominated financial services marketplace in Myanmar and Thailand. These partnerships mark an important milestone that determines how retail customers conduct their transactions within seconds.

CB Bank’s partnership with Grab saw the fastest adoption of cashless transactions in Myanmar. The API integration paved the way for a holistic cash management solution that allows the Grab drivers to receive the funds from Grab’s app, send it instantly to their bank account, and can be easily cashed out at any of the bank’s ATMs, branches, or affiliated agents.

Kasikornbank in Thailand has developed open APIs that allow corporate platforms to integrate seamlessly with financial services. The bank has launched quick response (QR) and bill payment APIs under electronic facilities for statutory payments such as tax, customs and excise duties.

With the emergence of integrated digital payment or third-party ecosystems, Deutsche Bank leverages in-house capabilities as well as alliances with fintechs to implement open APIs that deliver more personalised and cross-device payment options. Corporates now have the ability to receive real-time credit and debit advices through their bank account or demand deposit account API. They can access push notifications with updated current balances by use of the automated and standardised format to deliver real-time messages to clients.

Demand for integrated cash management services increased

Corporates have become increasingly digital in their operations to attain optimum cash and treasury management which led banks to step up the delivery of integrated and unified cash management services (CMS) across channels. There is a huge demand for treasury dashboard solutions that allow quicker decision-making. Driven by alliances with fintechs, the bank’s ability to optimise accounts represents a fundamental shift in CMS models.

Bank of America noted a complex account management scenario for its clients across diverse markets in Asia, Thailand, and China. The bank applied a next-generation account structure through the use of virtual bank accounts. This streamlines the number of operating accounts, increases visibility over cash positions, reduces the client’s dependence on time-consuming manual reconciliation activities and digitises workflows. The structure reduced the number of operating accounts by 12%, enhanced cost savings by more than 10%, thereby accelerating the straight-through processing up to 80%-90%.

Bank of China (Hong Kong) or BOCHK saw the need to provide more versatile payment and collection solutions to connect consumers and merchants. It has an integrated collection and merchant presented QR code service to collect payments from multiple channels. The bank launched the ‘BOC Pay’ service, a cross-border payment e-wallet, which enables mobile payment function in the Greater Bay Area by scanning QR code.

The State Bank of India leveraged data analytics and enhanced reporting through single-sign on dashboards to generate more in-depth reports. The bank collaborated with enterprise resource planning (ERP) solution providers to offer end-toend solutions to its customers.

There is a huge potential for automating payment processes in Sri Lanka. Considering the high growth in business in the insurance and medical sectors, local corporates are keen to make real-time payments upon request. Union Bank of Colombo devised templates where pre-approved payees could set a limit and accounts will be funded in real-time whenever the payment request is made.

Banks in Vietnam have invested in internet banking solutions to eventually migrate corporates to e-channels. The Bank for Investment and Development of Vietnam (BIDV) rolled out multi-channel disbursement and collection or bill payment services with round-the-clock support and virtual accounts solution to manage the receipt of funds from multiple clients. Its all-in-one payment gateway solution is widely used for electricity bills, water bills, top-up services including that of e-wallets, online shopping and many more.

Techcombank continuously enhances its cash management product suite through the application of unique tools. It uses a cash transaction analysis tool and customised reports to improve business administration for customers. The bank aids in the optimisation of client earnings and costs by increasing revenue through efficient cash flow management and automated processes.

Real-time payment revolution underway in Asia

With Asia making significant headway in the adoption of domestic realtime payment schemes, corporates stand to benefit from 24/7 settlements of transactions, deeper integration of payments in purchase orders through request-to-pay options as well as the transition from batch to real-time processing among others.

BOCHK offers a merchant-presented QR code solution for payers as optimism prevailed brought by increased flows from the OBOR initiative and Greater Bay Area development. They can use any mobile app of banks or store value facilities (SVF) that supports faster payment system (FPS) common QR code standard to scan the bar code and pay to merchants.

Hang Seng Bank developed a range of propositions such as direct debit instruction and status enquiry APIs to enhance the advanced connection between customers’ enterprise resource planning (ERP) with the bank’s backend system or bill payment facilities via FPS QR code to meet day-end bank statement reconciliation.

The immediate payment service (IMPS) launched in 2010 and unified payment interface (UPI) in 2016 had driven the wider use of real-time payments in India. Kotak Mahindra Bank leverages UPI to operate a consumerto-business (C2B) collections platform on the back of a biller operating unit (BOU). This drives inter-bank’s consumers to call for bills, validate and make payments. The bank has integrated UPI to come out with a powerful collection solution for its corporate customers.

With the expansion of instant payment clearing infrastructures in Asia, UOB Singapore observes the growth of peer-to-peer payment channels to include B2C and C2B payment flows via PayNow Corporate in Singapore, PromptPay in Thailand, and Duitnow in Malaysia. The launch of PayNow paves the way for the digitalised cash-on-delivery through UOB mCollect solution which allows clients to collect payments from their customers digitally via PayNow QR.

Foreign direct investment (FDI) flows from China, Japan, Korea, and Taiwan into Southeast Asia now account for 21.6% ($33.4 billion) of the total world inflows. E.Sun Commercial Bank supports customers with business interests in Southeast Asia as it sees significant opportunities from increased FDI flows. It enhanced regional integration and service capacity improvement through the deployment of overseas CM teams in Vietnam, Myanmar, and Cambodia.

Real-time payments systems and new technologies are providing basic functionalities and features to meet customer demands. Being an old participant in the Pan-European Single Euro Payments Area (SEPA) Instant system, Deutsche Bank has actively participated in the instant payment schemes in eight Asian countries such as Singapore, Hong Kong, India, Japan, South Korea, Malaysia, Sri Lanka, and Thailand. It will be joining the real-time payment schemes in Vietnam and the Philippines this year.

The Association of Southeast Asian Nations (ASEAN) is working to set up cross-border payment systems in local currencies through the ASEAN Payments Policy Framework. It would establish crossborder, real-time retail payments across ASEAN member states. Developments related to cross-border interoperability of standardised QR code for payments and real-time remittances are underway. The live operation of Singapore-Thailand real-time retail payment system linkage is expected to be completed by the first half of 2021.