Asia Leads in Digital Transformation
Tags: cash management, CFTC, digital transformation, iTreasurer, payments, pension trends, regional treasury, SOFR
The June issue of iTreasurer offers a glimpse of the rapid digital transformation taking place in Asia and China in particular. We look at a new trend in pensions, plans to overhaul the CFTC and why banks need to make their cash management system more user-friendly. Also discussed are the new Libor replacement, SOFR, and how one company is augmenting ACH payments with technology and regional regulatory knowledge.
Transformation in Asia arguably is happening at a pace that few other places experience. Thus, it is a great place for companies seeking to keep pace with change globally to witness how and how fast things can move. "The digitalization of day-today human experiences taking place in China shows how the pace is advancing faster than most large corporates are used to and up their games to stay in business in China and, soon, almost anywhere," writes Joseph Neu in "Asia Transformation Drivers and Five Ideas for Regional Finance Leadership," on page 1.
Finance and treasury teams operating in the region need to help the businesses they support make this transition, which is often called a digital transformation. What many are doing is proactively asking to take the lead on global initiatives and make Asia the proof of concept for them.
In “Anticipated Exposures,” iTreasurer takes a brief look at the latest trend in pensions, a targeted approach known as defined ambition. These plans promise to be more sustainable than DB plans and offer better returns than 401(k)s. Also, money market fund investors are still waiting to hear what will become of reverse distribution for European MMFs, and we take a quick look at Ernst & Young’s view of the new tax reform.
On page 6, iTreasurer discusses recent comments from Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo, who is looking to bring more order to his agency. Gone are the days when the commission operated in calamity mode, popping out regulations like donut holes. Now he wants rule-making to get back to exploring rules’ impact and making rules easier to follow.
In this month’s peer group summary, we take a peek at what was discussed at NeuGroup Treasurers’ Group of Thirty (T30) meeting in March. On the agenda were a look at how tax reform’s lower rates, while attractive, add new complexities; a discussion of how blockchain is here to stay; and the unfolding possibilities of robotic process automation.
On page 11, iTreasurer discusses a new report from consultancy Aite that suggests banks need to upgrade to more user-friendly cash management systems. One reason is that cash management systems have been so overly customized by banks that they cannot be easily upgraded and thus haven’t been able to keep up with the tech advances.
In "Switch from Libor to SOFR Will Be Challenging" on page 12-13, we discuss the implications of moving from Libor to the new SOFR, or Secured Overnight Financing Rate. The switch should provide major benefits to corporates’ cash-management and funding efforts. But with the transition now taking its first steps, they should carefully monitor its progress.
Finally on page 14-15, we take a look at how payments firm Earthport uses ACH and a wide assortment of tools to make global payments move faster and more efficiently.
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.