Multiple banking relationships and a lack of cohesive platforms mean that Asia-Pacific corporate treasurers are unable to have real-time visibility of their cash flow, a new study has revealed.
According to cash flow systems provider Cashfac Technologies, just 35% of corporates in the region have a real-time consolidated view of their cash holdings.
In total, 364 chief financial officers and corporate treasurers were interviewed by research firm East & Partners Asia for the survey, The Cashfac Operational Cash Index, in order to create a snapshot of corporate treasuries for major organisations in Asia Pacific.
The resulting 16 page-white paper revealed that only 40% of Hong Kong corporates, which had an average of 5.6 bank relationships, were able to achieve “a real-time consolidated view of their cash”, while as few as 25% of Malaysian corporates were able to do so, despite having fewer bank relationships (an average of three).
The report stated that achieving a real-time consolidated view of transactions and balances “remains elusive among Asian corporates”.
“A real-time view of cash is imperfect despite being available in real time. Pockets of cash remained in the shadow despite corporates owning systems that enabled real-time visibility”, the report stated.
The research revealed that among the corporates with a real-time view, an average of just 54.8% of total cash and on-going transactions was visible in real-time. This left the remaining balance to be consolidated manually in order to achieve a complete view of cash positions.
Lachlan Colquhoun, CEO of East & Partners Asia, said: “Due to the complexities and shortcomings of managing multiple banking relationships regionally, our research found that many Asia-Pacific corporates lack a line of sight to their cash positions. There are barriers, both regulatory and operational, that firms need to wrestle with, but the survey showed that in every region there's still room for firms to benefit from greater control of operational cash.”