Lance Kawaguchi, Managing Director, Global Head – Corporates, Global Liquidity and Cash Management, HSBC, explains why Singapore is a breeding ground for next generation treasury management and outlines how treasurers can take advantage of Treasury 4.0.
Despite being a small island nation, Singapore is a heavy-hitter on the global stage. The city-state is the largest foreign exchange hub in Asia Pacific, the fourth largest financial centre in the world, and the number one location for APAC treasury operations.
The country’s tax rate incentive (currently 8%) on income from qualifying Finance and Treasury Centre services/activities has long been an attraction for regional treasury hubs. But the island’s cash and liquidity management landscape is becoming even more compelling as the nation’s willingness to embrace smart technologies shines through.
As Singapore gears up to adopt the new manufacturing techniques brought about by the Fourth Industrial Revolution, or Industry 4.0, the treasury profession is also readying itself for an era of smarter, leaner, and more automated treasury management – what we at HSBC like to call Treasury 4.0.
From Industry 4.0 to Treasury 4.0
Industry 4.0 is bringing the digital and physical worlds together, combining the skills of machines and humans, and altering the way we work and interact.
Examples of technologies driving the Fourth Industrial Revolution include:
- Internet of Things (IoT)
- Robotic Process Automation (RPA)
- Application programming interfaces (APIs)
- Distributed ledger technology (DLT) or blockchain
- Artificial intelligence (AI) and machine learning (ML)
- Big data and advanced data analytics
- Cloud computing
Treasury 4.0 is essentially next generation treasury. This will see treasury departments work in real-time, with highly integrated, automated systems. Data will drive forward-looking decision-making and treasury teams will have the opportunity to exchange manual work for strategic thinking.
Recent market developments which are fuelling the rise of Treasury 4.0 in Singapore include:
While it’s easy to think that Treasury 4.0 is just about technology, it’s also important to focus on people. Humans are key to extracting maximum value from Industry 4.0 technologies, since they bring the insight, inspiration, and instinct that machines lack.
But to make the most the of the digital treasury environment, new skillsets and mindsets will be required too. Organisations may therefore wish to explore the positive correlation between innovation and workforce diversity more closely as they prepare for next generation treasury management. And, once again, Singapore offers an advantage here, being a true hub of diversity and home to the most technologically-savvy nation in the world - all of which bodes well for the advancement of Treasury 4.0.
Discover more about Treasury 4.0: