From energy to e-commerce, the importance of the treasury function across different sectors comes to the fore as treasury management professionals such as CFOs and treasurers work alongside their banking partners to solve day-to-day challenges. Over the review period, the board of editors at The Asset took into account a range of thoughtful and successful solutions as part of the Triple A Treasurise Awards 2024 programme that showcases the best efforts of companies to advance industry standards and improve the experience of their end customers.
In the financial institutions/non-banking financial institutions (FI/NBFI) segment, several solutions leveraged a combo of application programming interface (API) connectivity, virtual accounts, and electronic direct debit authoritization (eDDA) to help treasury professionals improve their reconciliation processes and gain real-time visibility of their account holdings. This was particularly useful for insurance companies seeking a better grasp of their premium collections.
As in previous years, companies in the new economy sector were appreciative of the work of their banking partners who understood their business model and met their specific requirements. These banks had to do out-of-the-box thinking to come up with impactful solutions ranging from cross-border merchant accounts and payment aggregators while working closely with financial regulators to make sure certain transactions were permissible. Several banks embedded their cash management solution with automated FX conversion, resulting in better cost efficiency for clients. There were also enhancements to back-end transaction processes to be able to handle a higher number of transactions per second to support the low value/high volume nature of most new economy companies.
There was also notable coverage of the services sector seamlessly executed by a number of banks. In the education sector, clients were able to digitalize the collection process, doing away with the use of cheques and leveraging instant payment networks such as FPS (Faster Payment System) in Hong Kong or PayNow in Singapore.
Green transition
The energy sector – the renewables segment, in particular – was another focus area for service providers to finance the procurement of essential equipment such as solar panels and wind turbines that corporate clients needed in their green transition. These financing packages included letter-of-credit discounting and multi-jurisdictional bank guarantees.
In heavy industry sectors such as manufacturing and commodities, there was a focus on working capital optimization with solutions involving receivables financing and supplier financing programmes. An interesting trend observed during the review period was the prevalence of insurance-backed account receivables purchase programmes. Other programmes involved syndication to third-party institutions to overcome funding limit constraints.
Companies also looked to their service providers for solutions aligned with environmental, social and governance (ESG) principles. For example, CFOs and treasurers have sought to integrate ESG factors into activities such as cash management and supply chain financing to demonstrate their commitment to sustainability.
The board of editors at The Asset has noted that the integration of ESG into corporate finance has gained further momentum during the review period, with ESG-linked treasury activities demonstrating resilience in the face of macroeconomic and geopolitical uncertainties.
Sustainable projects
Among the most popular banking products were green and sustainable deposits targeting jumbo-sized and ESG-dedicated corporates. These products enabled clients to use surplus liquidity to invest in qualified green/sustainable projects, which in turn gained increased short-term liquidity while lowering the cost of capital.
Sustainable trade finance was another major area where treasury and ESG merged. Solutions like green bank guarantees allowed banks to help their clients close their working capital gap and achieve their green transition ambitions. Some Chinese renewable energy brands, for example, were able to expand their green business across the world through such programmes offered by banks.
Sustainability-linked supply chain finance solutions were also on the rise. Leading suppliers committed to sustainability sought to incentivize their partners in the supply chain network, usually small and medium-sized enterprises, and cooperate with them to align their sustainability agenda. During the process, banks were able to help them understand the best industry practices and offer favourable financing rates in line with their improved ESG performance. This type of product proved highly popular among companies in the consumer goods sector aiming to clean up the sourcing of their raw materials.
All these are but a few of the outstanding treasury solutions across multiple industry segments that have made it to the Asset Triple A Treasurise Awards 2024.
To see the list of winning solutions and learn about these awards please click here.
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