The inaugural Digital Treasury Index commissioned by DBS Bank revealed that Chief Financial Officers (CFOs) and corporate treasurers (29.5%) see themselves as increasingly responsible for pushing the agenda of their companies’ digital strategy.
This compares with 43.6% of respondents who saw it as the responsibility of their technology colleagues. Surprisingly, only 11.3% of respondents across APAC said that driving digital transformation was the responsibility of their CEOs. A large number of the CFO and corporate treasurer respondents (44.1%) also noted that along with leading the agenda they are partnering heavily with their business units to drive digital transformation execution.
In terms of digital readiness, the survey also showed that seven in 10 companies in the Asia-Pacific (APAC) region risk being left behind by a lack of digital strategy and execution plan. Singapore companies fared better with 41% having a digital transformation strategy in place. Australian businesses appeared to be the least mature of the developed markets surveyed with under 10% having a clearly defined digital strategy.
John Laurens, Group Head of Global Transaction Services at DBS, said that digital transformation is pervasive and disrupting industries across the globe. “More and more, companies have come to understand that digital transformation involves a complete transformation across their organisation - from front-end sales engagement to back-end operations. And this requires the involvement of every part of the company’s organisation. We are seeing more and more CFOs and Treasurers being called upon to drive this change because they have broad oversight and in-depth understanding of key business drivers and organisational challenges.”
Speed of change - biggest risk to digital adoption
CFOs and corporate treasurers said that the top three risks to digital adoption were (1) the speed of change and complexity of the enabling technologies (86.4%), (2) execution challenges and delivery of outcomes (78.8%) and (3) the availability of talent to help execute digital transformation efforts (67.6%).
Laurens said companies are increasingly seeking out banks’ advice on the suitability and safety of new technologies for business use. “It is interesting to see CFOs and treasurers deal with some of the new Fintech risks emerging as a result of the digital push by business leading to reliance on banks to help mitigate such risks. What’s more, they are demanding new ways to connect to banks such as through APIs (application programming interfaces) where the connection is both direct and instantaneous.”
The increasing adoption of APIs for integration with banks and third parties was a particular highlight in the Index, with 32.3% of CFOs and Treasurers now using APIs to connect with banks and other third parties, and set to grow to 40% over the next 12 months. “It’s all about APIs for us; they are quick to deploy and tend not to require major rework around our ERP platforms. We are finding the approach especially useful as well across our supply chain partners,” says a large Hong Kong based exporter.
When addressing the greatest advantages they see from digital transformation, CFOs and corporate treasurers ranked reducing costs and improving efficiencies as a top ROI (1.93) outcome. However, improved customer experience (2.03) and lower market engagement barriers (2.11) followed very closely, illustrating the growing realisation that digital transformation is critical to driving competitive advantage and future revenue generation for their businesses.
1 The survey conducted by East & Partners Asia interviewed 1,304 chief financial officers (CFO) and corporate treasurers from an even mix of middle market companies (USD100m to USD1bn revenue equivalent) and corporations (USD1bn-plus revenue equivalent) in 13 markets - Australia, China, India, Indonesia, Japan, Hong Kong, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. The survey was conducted in May 2019.
2 On 1 to 5 scale: 1=‘high return’ and 5=‘no return at all’