View from Asia Pacific: Building the Treasury of the Future

Market Trends

With agile and proactive treasury teams, companies can strike a fine balance between addressing unexpected challenges and fulfilling key priorities.

The lifting of pandemic-related disruptions globally has made 2023 the year of the ‘great reset’. However, as companies re-adapt to operating without restrictions, they face an environment beset with volatility, uncertainty, complexity, and ambiguity (VUCA) stemming from geopolitical risks, monetary tightening, and recent US bank failures. To successfully navigate the VUCA environment, corporates need to build a treasury of the future, capable of striking a fine balance between addressing challenges and fulfilling key priorities.


“To support businesses seamlessly, the treasury of the future needs to be agile in proactively managing volatility and risks, and in optimising cash — all while remaining cost effective. Attaining the right mix of human talent and technology tailored to the company’s needs, making ESG a strategic objective and collaborating with banks to co-create appropriate solutions will also be crucial,” says Rupa Balsekar, Head of Transaction Banking, Southeast Asia, BNP Paribas.


At the recent BNP Paribas APAC Treasury Board meeting in Singapore, CFOs and treasurers from diverse sectors across Asia Pacific met to discuss their top priorities. We examine four of the key challenges to emerge, and how treasurers can prepare. 

Optimising working capital and liquidity

Two thirds of participants indicated they planned to build cash reserves for working capital over the next 12 months. While optimising working capital and liquidity has always been challenging in a diverse region like Asia, where capital controls often hinder cash centralisation, the VUCA environment further complicates a treasurer’s task of providing businesses with ready access to cash, especially in trapped-liquidity markets.

Challenge: With the era of cheap liquidity behind us, borrowing costs are rising, as is the opportunity cost of holding excess cash. Recent US bank failures have highlighted the importance of counterparty risk mitigation when deploying cash in interest-bearing deposits and liquid instruments.

Preparation: Treasurers’ priorities could include re-evaluating banking relationships and counterparty risks, avoiding overdependence on a single bank, and assessing intercompany agreements and dividend policies. In a credit crunch, having the right set of banking partners who can provide timely liquidity and holistic products will be key. Bank counterparty risk ratings are starting to guide cash deployment decisions on across multiple banks. Additionally, intercompany lending arrangements and preserving cash by adjusting dividends can also shore up liquidity.

Nurturing treasury talent

Automation and digitalisation have resulted in leaner treasury teams. While technology enables treasuries to do more with less in business-as-usual scenarios, a VUCA environment can render automated machine-based decision-making less reliable, or even ineffective. The treasury of the future will need skilled and experienced personnel to assume full control of critical treasury functions, especially when faced with testing situations.

Challenge: While over-reliance on automation is too risky, headcount caps limit hiring. Meanwhile, treasury talent has become scarce; the pool of experienced professionals has dwindled over the years as automation has replaced traditional jobs.

Preparation: Building resilient treasury teams involves incentivising experienced treasurers to stay on, while making treasury roles appealing to younger professionals. Corporates could rethink country-focused treasury roles, give experienced treasurers a regional or global remit and utilise their skills across geographies. Companies could attract fresh talent by incorporating sustainability and fintech partnerships in treasury functions, in order to make these roles more appealing to purpose-driven and tech-savvy young people.  

Tailoring digitalisation to drive growth

While digitalising treasury management systems is imperative to enable adept decision-making, the majority of treasurers felt they were a little behind the curve when it comes to investing in data and technology.

Challenge: Given a multitude of cutting-edge solutions and fintech proliferation, picking the right solutions and partners is daunting at the best of times. Digitalisation needs vary across companies, industries, and markets. While payments have become highly digitalised, many companies still struggle with paper-based invoice and receivables reconciliation.

Preparation: Treasurers are starting to review their internal workflows and processes to understand what is working well and identify gaps. Digitalisation ought to serve the company’s specific needs rather than focus too much on the latest cutting-edge innovations. In choosing fintechs and banks to co-create new treasury solutions, corporates can seek partners capable of building regional or global platforms rather than country-specific solutions.

Sustainability as a strategic objective

Though ESG adoption in financing has yet to gain traction among most treasury departments in Asia, sustainability agendas are starting to take centre stage. This is crucial to meet emerging and future regulatory compliance as well as customer expectations, and to attract fresh talent. When asked about the progress in adopting ESG financing, over half of the treasurers at the Treasury Board meeting noted that they were in the process of evaluating options, or had yet to start.  

Challenge: ESG goals are yet to become a top priority, however there remains a lack of knowledge on the most appropriate ESG options, and an absence of common standards across jurisdictions.

Preparation: The treasury of the future must make sustainability a strategic objective, aligning itself with the company’s ESG goals and taking a proactive role in driving sustainability agendas. Treasurers are well placed to advocate ESG adoption as this would enable them to tap lower cost financing, or higher yields, in the case of sustainable deposits. This calls for strong understanding of the ESG landscape in order to highlight its importance from a financing perspective, and meet the expectations of investors, consumers and wider stakeholders.

In meeting the key challenges discussed above, treasurers can work with their banking partners to co-create solutions that enable scalability with risk mitigants, as well as to gain advice on sustainable solutions.


“During times of uncertainty, it’s even more important to draw on market insights and innovation from banking partners and to invest in treasury transformation today to be better positioned to meet future challenges,” says Krishna Sampath, APAC Head of Liquidity and Investment Solutions, BNP Paribas.

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