Asia not only offers big growth opportunities, but also innovative ways to be more cash efficient.
When you mix a lack of substantial infrastructure with an innovative nature and add higher-than-average economic growth, what one ends up with is a market ripe for testing of new technologies and products. In the highly competitive world of cash management, international banks have particularly targeted the Asian continent for these reasons, and with some quick successes.
In the past year or so, major players such as Citi and Deutsche Bank have jumped into the market with a variety product offerings, including smart card solutions and mobile banking applications to expedite cash collections. Working together with multinational to test new solutions, these banks and others hope to roll them out globally after all the kinks have been worked out in Asia’s proving ground. Companies and their treasurers that do business in Asia should work with their global banking partners to make sure they are on board.
A culture of innovation. A culture of innovation exists particularly in the Asia-Pacific region where smart cards have been in use for years in Hong Kong, Singapore and more recently in Japan. As one Deutsche Bank managing director noted, “most of the work we are doing with these companies is in Asia where there is a faster uptake of new technology.”
For its part, Deutsche Bank currently is leveraging both growth in short message service (SMS) and that appetite for innovative IT solutions. The bank now offers cashless collection services for its large corporate retail customers with a newly developed mobile-based solution. Using the SMS protocol, invoice information is sent to the customer for approval via the customer’s mobile phone. Once approved, direct debit instructions are issued same day to the customer’s bank for payment. There is some upfront set-up and authorizations required, but efficient, seamless processing and same-day funds in the bank replaces cash and check handling by sales or delivery personnel. Besides improving liquidity, DB’s solution reduces collection costs and the potential for fraud and theft.
Another example is Citi, one of the most widely used banks in Asia. It chose Singapore for a pilot showcase of its new, faster card issuance program. Working with the island’s metro system, Citi was able to get access to 1.1 million potential new customers.
Check with your partners. Treasurers with cash flow in the Asia Pacific area should challenge their bankers to see how they are approaching this market in terms of cash management products and services, and how to improve corporate liquidity in the region.
If company revenue generated from Asia is expected to grow alongside the strong economic growth, take a look at the innovations and products global banking partners are developing overseas. Faster acceptance of new technologies and solutions (and not being burdened with old processes and infrastructures), can open the door for cost-effective solutions that are not necessarily available in the other global markets you sell to.