Looking East and West

It's hard graft but this is the time year when your correspondent takes flight for Singapore. My primary focus was GTR Asia, the world’s leading and largest trade and trade finance event in which the ACT is positioned as the expert treasury partner. This allows the ACT to showcase our latest Business of Treasury (BoT) report to a large trade finance audience, albeit with a healthy corporate segment. In addition, a corporate treasury panel discussion (led by your Speakers’ Chair!) covered a range of treasury and technology issues.

Overall the conference mood during its two days was cautiously optimistic. Business is sensitive to the China/US trade dispute (‘war’ being too strong a term for some) and other regional political spats, but there is some respite led by consumers in markets such as Thailand and Indonesia supporting domestic industrial and agriculture producers.

One noticeable feature of the conference was that of the promised arrival of technology such as AI, blockchain (or distributed ledger technology, DLT) and digital trade (eg e-bills of lading) is increasingly a reality. Many more banks and fintech operators (and some governments) have trialed and been successful with their solutions in local and international businesses and with agencies (such as Asian Development Bank). Is there more work to be done? Yes, certainly but one can see both patterns and a direction of travel.

It helps that tariff barriers are reducing across ASEAN although non-tariff obstacles remain, along with the usual cross border issues of currency, legal jurisdictions, differing levels of bank liquidity and access for corporates – especially SMEs - to funding. There remains a gap between demand from corporates for trade finance and what markets currently offer but there’s a lot of professionals working on closing it!

The corporate panel on innovation agreed with the BoT conclusion that technology will impact treasury and could lead to some job losses in operational activities, but felt that opportunities would come along in data analysis, risk management and broader treasury involvement in areas such as procurement.

The night before the conference the ACT held a member/student meeting (hosted by Clifford Chance) with a full dive into the BoT research. Its focus on technology and the current and developing concerns of treasurers was keenly appreciated.

Clifford Chance also provided an update on LIBOR/IBOR changes. Attendees were urged to review all their LIBOR based contracts and agreements and to talk (now!) to their financial service providers and advisors.

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