Treasury optimization in Asia

Part IV:

Global optimization in a world of ‘slowbalization’

Compared to their Western counterparts, Asian corporate treasuries have had to grow and learn to react to business complexities and changes in their environments very quickly. Western corporations have had the ‘luxury’ of adapting over a longer period, while Asian treasuries have worked hard to catch up and match their levels of maturity and integration. In this fourth and final part of our series on treasury optimization in Asia, we look at global optimization.

Until recently, building an efficient and value adding treasury function was not a high priority for Asian corporates. This has now changed, as increased volatility in both the financial and commodity markets, due to the recent COVID-19 outbreak, the legacy of the global financial crisis, regulatory changes and innovative business models have caused treasury departments in Asia to adopt a more strategic role. Even within Asia, priorities may differ according to the level of treasury maturity of a particular country. For example, Australian corporate treasuries are more mature and integrated with their business than Chinese companies are because they have experienced international growth for a longer period.

The Chinese have seen tremendous growth over the past decade yet, compared to their Australian counterparts, Chinese corporate treasury departments are relatively young and therefore lack the treasury expertise commensurate with the higher level of maturity needed to manage the complexities they are confronted with. However, they are able to advance through the stages of maturity at a faster pace, since technological advancements allow ‘new’ treasurers to omit several hurdles previously encountered by others. One such example is SaaS solutions, which enable corporate treasuries not heavily supported by IT to implement a TMS.

In line with trends in Europe and the US, treasury is adopting a more strategic role in the Asian organization. Senior management is underwriting the importance treasury can have in not only liquidity and risk management, but also in supporting innovative business models that will allow companies to drive competitive advantage. Without a high level of treasury sophistication, expertise and integration, companies may fall short when trying to structure a more efficient supply chain, improve their working capital and monetize their financial assets accelerated in the aftermath of the COVID-19 pandemic.

Transcending optimization

In a recent white paper, co-authored with Citi(1), we identified that although the traditional objective of centralization remains valid, its concept has changed. Instead of simply focusing on location, the new concept incorporates location with virtualization, supporting centralized control and local empowerment. However, we might be in for ‘slowbalization’(2), a term dubbed as the slowdown of globalization by The Economist. As discussed in our recent article on the disruption caused by the pandemic, the new normal could bring about a more fragmented structuring of processes(3) supported by technological advancements.

Companies that are entertaining the thought of reaching or transcending the highest level of optimization, have reached either the enhancing stage or the optimized stage applicable to the Treasury and Risk Maturity model we introduced earlier. Typically, these companies can be identified by their highly complex business environment and the high level of treasury integration with their business. Treasury’s expertise is relied on to offer solutions to navigate their complex business environment. For example, regulatory challenges and the global tax trend toward substance over form, transparency and documentation are driving a further need for standardization across the global organization.

Technological advancements have allowed treasuries at these levels of business integration and expertise to continue to mature, thus improving efficiency and providing better quality. This has allowed companies to reap the benefits of treasury’s value adding services. Technological advancement has seen increased speeds of development with new technologies such as robotic process automation (RPA), data analytics, blockchain and artificial intelligence (AI) - termed exponential technologies - igniting discussions around what level of optimization and centralization can be achieved next by transcending treasury.

Larger corporations at the highest level of maturity, however, are questioning whether local or regional teams are still required. With everything centralized and standardized, can we not consolidate and close some of our regional or local centers? Do we need regional or local centers in Asia if we are headquartered in Europe or the US, or do we need regional or local centers in the US or Europe if we are headquartered in Asia? These questions come up as treasuries reach high levels of maturity and optimization, and are confronted with highly improved treasury transcending technological solutions.

Such corporate treasuries act as internal consultants to the business, operating in highly complex business environments and highly integrated with the business to offer added value. However, if we look at the traditional solutions and stages of maturity, they are close to full optimization of their treasury operations.

Global Treasury Center

Exponential technology may offer a new solution to help answer the question of whether to centralize operations further in a single Global Treasury Center to increase the level of optimization, although developments in this area are so rapid that it is sometimes difficult for treasurers to keep up. Clients frequently ask us whether these advancements can offer a solution to their day-to-day problems.

We believe that treasurers who welcome and embrace the opportunities presented by exponential technologies will be able to improve their operations. To do so, they will need to evaluate manual processes and identify those that can be improved, redesigned and replaced by these technologies. They will also have to assess the human skill requirements needed to achieve their strategic objectives. For example, RPA will free up valuable time of the dedicated treasury staff to add more value elsewhere, potentially from a single location. Outsourcing will become near-sourcing and parts of the operations will be executed 24/7 on an automated basis supported by RPA, machine learning or AI. Developing a data strategy to identify, collect, manage and analyze all the relevant data will support a data-driven culture that should enhance the decision-making process .

CIPS (China Cross-border Inter-Bank Payments System) in China, and emerging instant payment solutions in Singapore and Australia are examples of continuous developments that are creating opportunities for efficient payments and cash management, enabling increased standardization and possibly centralization of processes by setting up a GTC. A GTC undertakes all functions, is highly centralized and serves as the only treasury for all global markets that a company operates in or as the consolidation of all local and regional treasuries.

A GTC will help overcome the fragmentation of organizational structures, policies, processes and systems as everything will be structured and managed from a single location and perspective to optimize the level of expertise and integration it can offer the organization as local empowerment becomes less important. However, exponential technology can still re-instate local empowerment even when centralization has taken place through offering a virtual presence in the region or locally, yet still running the operations from the single location at the GTC.


Traditionally, it would be counter-intuitive to say that global optimization can support regional or local empowerment because increased centralization and optimization require an organization to relieve local or regional staff of their responsibilities. With the technological changes and the evolution of the centralization paradigm, where the concept has shifted and incorporates location with virtualization supporting centralized control and local empowerment, this may no longer be the case.

Obviously, even if an ideal structure can be identified and implemented, maintaining such an optimal structure is not easy to manage. The external environment is susceptible to continuous changes, such as ever-changing regulations, banks and other providers continuously developing their products and services, and a treasurer's own business continuously adapting to changes in the market. These changes are mainly driven by exponential technologies and the digital revolution we are currently undergoing. In addition, globalization is a large contributor to fading borders and barriers. But for how much longer, as we see the disruption the COVID-19 pandemic has caused? Countries and companies are starting to revisit the notion that globalization is the way forward.

The level of entanglement due to fading borders has proven to be dangerous in recent months. Restructuring supply chains to become less centralized, for example, will require treasury departments to manage increasingly complex regional or local business operations as they become more fragmented. However, as previously mentioned, exponential technologies can support local empowerment.

Adapting to the new environment that incorporates these exponential technologies will require collaboration within the treasury ecosystem - between corporates, their banks, and technology and service providers. Open-mindedness, experimentation, shared experiences and lessons will be critical to the future of treasury, and to allowing highly mature corporate treasuries to optimize their treasuries further and transcend all levels of maturity. As mentioned before, each case is unique and requires a structured approach that takes into account any specific requirements and goals supported by best practices.

This article is the fourth and last part of a series on treasury optimization in Asia. The first three articls can be found here (please click on the titles):


(1) The Future of Corporate Treasury’, Zanders and Citibank, 2019 (2) The steam has gone out of globalisation’, The Economist, 2020 (3) Managing working capital in times of disruption’, Zanders and Citibank, 2020


This article was written in cooperation with Aron Åkesson. Aron has been living in Asia for eight years working with and helping MNCs to improve their treasury in the region. He has detailed understanding of local banking, financial markets and culture, speaks mandarin and is well connected among banks and financial institutions in the region. For more information, go to


As of October 2019, Zanders is also present in Asia. We have opened an office in Tokyo, Japan, to service to our clients located in the East-Asia region.

If you have any questions regarding our operations in Asia, please feel free to reach out to Michiel Putman Cramer via +81 3 6892 3232.


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