Over nine in 10 multinationals are empowering their treasury and finance departments to actively drive business transformation and growth: DBS global survey

Singapore, 25 Jul 2024 - A global survey by DBS has revealed a significant shift in the role of treasury and finance functions within multinational corporations – with these departments moving from traditionally supporting roles to providing strategic leadership. This comes amid a rapidly changing business landscape marked by supply chain shocks, rising geopolitical tensions and climate change.

In a new report entitled Pivotal: How treasury and finance enable a new era of globalisation, some 94% of respondents indicated that their treasury and finance functions are playing a more prominent role in shaping corporate strategy. Another 80% said these teams were actively driving innovation and new product development. A total of 570 senior executives from 15 markets across Asia Pacific, Europe and North America were surveyed^[1].

In addition, 79% of companies said they were leveraging treasury and finance expertise to drive procurement and supply chain reconfiguration strategies. Other emerging areas of involvement included digital transformation (75%) as well as sustainability-related activities (71%). These are on top of the teams’ existing responsibilities including cash and liquidity management, compliance, as well as risk management. The report findings underscored the growing strategic influence of these departments amid an increasingly complex business landscape.

Tan Su Shan, Group Head of Institutional Banking, DBS, said: “Business leaders face multiple challenges today. From dealing with unexpected tech outages to rethinking supply chains and driving innovation, businesses need to be agile in developing and implementing new strategies to tackle a rapidly changing landscape and emerging risks. To build resilience and drive growth, companies must embrace innovation, digital transformation, and build sustainable supply chains. Treasury and finance teams are uniquely positioned to influence the long-term success of their organisations by enhancing strategic planning, risk management and data-driven decision-making. Through these measures, companies can better navigate challenges and capture new business opportunities.”

Inga Kudzmaite, Regional Treasury and Tax Director, APAC, for the Carlsberg Group, said: “Treasury for me is an enabler of business strategies. We play a key role in safeguarding economic value and ensuring the business has all the necessary needs to operate, such as creating the procedures and policies to make sure that foreign exchange or financing is available in the markets where it is required, and that it is used effectively.”

Success will be driven by growth within Asian markets

Among companies looking to expand their operations and penetrate new markets, the majority expect these activities to be driven by growth within Asian markets. Some 76% of respondents polled said building top-line growth in the region is a key priority over the next two years. One in two companies said that Asia’s long-term growth potential and strategic location for supply chains were the key draws for expansion in the region.

James Li, CEO at LinkLogis International, a China-based fintech that supports supply chain financing, said: “We see international opportunities as our clients move into Asian countries, and we follow them. In the last few years, we have set up offices in Hong Kong and Singapore to cover the region from north to south, and this year, we are going further by hiring people in Vietnam and Indonesia. You need to establish yourself in these markets to understand the local frameworks and business environment.”

In line with the need to drive strategic priorities and enable diversification plans, companies cited the increasing importance of securing multiple streams of financing.

Some 76% of businesses said that diversifying sources of financing – such as tapping lenders in different markets – is necessary for expansion across Asia. Another 74% said selecting a suitable location for a regional treasury centre (RTC) is critical. Key considerations on selecting a location included access to global markets (74%), a stable political environment (71%), a conducive business environment through business-friendly policies (70%) and availability of a diverse talent pool (70%). Having a financial services partner with deep sector knowledge (40%), strong market presence (38%) and technology capabilities (37%) was another important factor to enable success.

Lim Soon Chong, Group Head of Global Transaction Services, DBS, said: "Asia continues to be the epicentre of growth, with businesses seeking new consumer markets and manufacturing capacities in the region’s emerging economies. To capitalise on these opportunities, companies are increasingly operating across borders, embracing e-commerce and delivering on-demand services to keep up with changing consumer preferences.”

“These shifts require corporates to work with a wider ecosystem of partners, including banks, to tap a broad suite of solutions and services – ranging from optimisation of cost structures, data analytics and AI, treasury risk management, as well as innovative digital payments and working capital management. As an Asia-centric bank with an extensive regional footprint, DBS has been leveraging our network to partner clients as they navigate the challenges and opportunities that come with growth.”

Conclusion

The findings give a deeper understanding into the evolving role of treasury and finance teams amid a new era of globalisation. Companies that embrace this change by upskilling, embracing new technology and embedding the right culture to enable teams, as well as working with a network of trusted partners to adapt to these new responsibilities stand to unlock new opportunities in a dynamic global marketplace.

Read the full report here: https://go.dbs.com/pivotalglobalreport2024

^[1] Over 85% of respondents were from companies with an annual revenue of over USD 1 billion. The study was conducted by FTLongitude, the specialist thought leadership division of the Financial Times Group.

About DBS
DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.

Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 15 consecutive years from 2009 to 2023.

DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets.

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