Banks in the Asia-Pacific may be better capitalized than their Western counterparts, but navigating the different regulatory regimes and market practices across the region is challenging for companies.
Tax and regulatory regimes are many and varied in the countries that make up the Asia-Pacific region. With multiple currencies and diverse macroeconomic outlooks, disparate banking systems and inconsistent technological and physical infrastructure, managing cash and liquidity across the region can be challenging at best.
One of the key concerns for corporate treasurers is staying on top of changing domestic regulation. China has once again enacted measures to restrict capital outflows—creating fears that it may retreat on promises to liberalize its currency and cross-border investment.
In April last year, the National Payments Corporation of India introduced the Unified Payment Interface for speedier person-to-person and e-commerce transactions and for compliance with know-your-customer regulations.
Other regulations that are impacting companies in Asia include the Bank for International Settlements’ Basel III capital-reserve requirements. Banks in Asia are well positioned to meet the standards, as many jurisdictions have more-stringent capital
restrictions in place than those stipulated under Basel III.
Other key concerns for Asian corporate treasurers are geopolitical in nature, such as the territorial disputes in the South China Sea, for example.
There is uncertainty surrounding Asia’s trading relationship with the United States—particularly trade ties with China—and how it is likely to change under the new Donald Trump administration. Although a great deal of rhetoric suggests Trump could enact trade barriers and import taxes, how that plays out remains to be seen.
President Trump has pulled the United States out of the proposed Trans-Pacific Partnership, which would have given preferential trade treatment to signing members in the Asia-Pacific region—including countries such as Australia, Japan, New Zealand, Singapore and Vietnam.
On the other hand, corporate treasurers continue to benefit from the fast pace of digitization and technological advancement across the region.
Companies ranging from small and medium-size enterprises up to the largest blue-chips are anxious to go digital-first with banking partners. And regulators—particularly in Hong Kong and Singapore—are driving this trend by pushing companies away from a check culture toward electronic payments and digital money.
As is the case elsewhere, transaction banks in the region need to work with the best and brightest financial-technology companies to deliver the high-end solutions their clients are looking for to improve customer interaction, increase data availability and ensure the safety and security of their data.
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Asia-Pacific |
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Best Overall Bank for Cash Management |
DBS Bank |
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Best Bank for Liquidity Management |
China Construction Bank |
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Best Provider of Short-Term Investments/Money Market Funds |
JP Morgan Asset Management |
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Best Bank for Payments and Collections |
YES BANK |
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Best Bank for Working Capital Optimization |
Standard Chartered |
ASIA-PACIFIC
Best Overall Bank for Cash Management
DBS
DBS has been rapidly expanding its treasury and cash management offering and market share in the region in recent years. The bank has embraced digital solutions and launched a number of new offerings that are tailored to specific markets in the region. For example, DBS launched enhanced online tax payment functionality on its IDEAL platform–for Indonesian clients; automated clearing house (ACH) services in Taiwan; NACH solutions in India; and an On-Demand Domestic Sweeping service in China, which allows clients to initiate multiple intraday sweeps between entities for urgent settlement. In addition, DBS PriorityPay provides instant cross-border transfers within Asia.
The bank saw its transaction services business grow significantly in 2016, and record growth is on track for the coming year, as well.
Best Bank for Liquidity Management
China Construction Bank
China Construction Bank has focused on increasing investment in digital banking solutions for enterprise clients and has invested heavily in its cash and treasury management suite. That investment is paying off, as the banks boasts increasing numbers of cash management customers—and increasing market share.
Managing liquidity in Asia is hardly a simple thing. It is a region of disparate regulatory and currency regimes, from fully- liberalized markets to very restricted ones. But digital banking solutions are being launched to increase cash visibility, which is a first step to improving liquidity management. For trapped liquidity, banks are making use of tailored solutions, such as intercompany transfers, dividend payments and interest optimization, to move liquidity.
China Construction Bank provides corporate clients with access to a wide range of solutions to deal with the complexities of the market, including interbank lending and borrowing, repos and reverse repos, and interbank deposits.
Best Bank for Payments and Collections
ICBC
ICBC online banking platform offers a “single point entry for global cash management in different currencies, languages, countries across different time zones and banks worldwide,” notes the bank.
On the payments and cash management front, the bank has been investing heavily in its solutions for global account management, collections and disbursement and liquidity solutions, such as cash pooling. One key plank is the bank’s multicurrency centralized collection and disbursement offering, which supports data flows between ICBC accounts, between accounts of ICBC and third parties—and between accounts at third parties.
Best Provider of Short-Term Investments/ Money Market Funds
JP Morgan Asset Management
With decades on the ground in key markets in this region, few banks have the deep local roots and global reach of J.P. Morgan. It offers access to a range of short-term liquidity and investing solutions covering the gamut from money market funds to short-duration funds and commercial paper, along with Treasury securities and other offerings.
J.P. Morgan’s Asset Management arm is one of the leading bank-owned providers of investment solutions to corporate clients in the region. It has global assets under management of $1.7 trillion, and the banking group has a CET1 ration of 12.4%.
Best Bank for Working Capital Optimization
Standard Chartered
Standard Chartered boasts more than 6,000 corporate clients in the Asia-Pacific region. It takes a client-specific approach to working capital optimization that stands out. The bank works closely with clients to solve working capital problems is ways that are specific to each market and company.
At the same time, Standard Chartered offers market-leading global solutions, such as working capital analytics tools to improve cash-flow forecasting. It also offers a virtual account solution for collections and payments, to centralize funds and improve intraday working capital management. And of course, the bank is perhaps best known for its wide-ranging and tailored trade and financial supply chain solutions, which are structured to help companies improve working capital efficiency.
