Home to some of the largest economies and developed markets in the Asia-Pacific region, North Asia offers multiple opportunities for service providers across the client spectrum – from multinational companies (MNCs) to large local corporates (LLCs) and SMEs. This rich offering has driven the banks to invest heavily in countries such as China, enabling these institutions to bring forward different solutions in sectors like e-commerce, where B2C online business models, for instance, have been increasing rapidly.
Cash management remains a significant revenue stream, with several banks enhancing their in-country capability – perhaps in line with the trend for in-country request for proposals (as opposed to regional proposals). The cash solutions are usually designed to streamline the collection process and increase the company’s liquidity position, maximize internal funding operational efficiency, daily reporting via multi-bank solution, and streamline the cross-border payments and receivable process.
In the meantime, trade revenues have failed to match the strong cash management gains, partly due to Sino-China trade tensions dampening trade flows. Trade friction has resulted in heightened volatility in FX rates, and the ensuing higher level of risk aversion has impacted trade activities.
This market turmoil comes at a time when trade finance is witnessing its own transformation via the outlay of blockchain technology, most notably with the participation of the regulators, who are initiating new trade finance platforms in places like Hong Kong. The Hong Kong Monetary Authority (HKMA), for example, announced in October last year the official launch of eTradeConnect, a blockchain-based trade finance platform developed by a consortium of 12 major banks in Hong Kong.
Formerly known as the Hong Kong Trade Finance Platform, eTradeConnect aims to improve trade efficiency, build better trust among trade participants, reduce risks and facilitate trade counterparties to obtain financing by digitizing trade documents, automating trade finance processes and leveraging the features of blockchain technology.
Supply chain finance also gained much traction in North Asia as banks rolled out supplier and distributor finance programmes to address their clients’ pain points. The different supply chain finance solutions are designed to achieve flexibility in payment terms and tenors to enhance working capital management and improve the working capital cycle, balance sheet optimization and also to improve credit levels.
Following an extensive evaluation process and speaking to service providers and their clients, the board of editors at The Asset selected Standard Chartered as the Best in Treasury and Cash Management for North Asia, while HSBC earned the accolade as the Best in Working Capital and Trade Finance. Standard Chartered also received the plaudits as the Best Fintech Partner Bank in China and Hong Kong.
In China, China Merchants Bank notched up another winning formula, as yet again it was deemed to be the Best Transaction Bank. This bank knocked the competition sideways, which included companies and state-owned enterprises such as Vanke, China Merchants Leasing, COSCO Shipping and China State Construction. This acumen also enabled the bank to win the Best in Treasury and Working Capital for LLCs.
Likewise, Bank of Communications retains the accolade as the Best Service Provider for Cash Management, continuing to demonstrate the strength of its franchise with key mandates to address its clients’ operational challenges.
Bank of America Merrill Lynch is a star performer when it comes to MNCs, counting among its clients the likes of Qualcomm, Cummins, Samsonite and Johnson Matthey. This bank implemented solutions connected with supply chain, payments and collection, as well as achieving greater visibility and return on cash. The solutions spawned pushed the bank over the line to be named as Best Service Provider for Risk Management.
The trade finance accolade goes to HSBC, underpinned by its strength in terms of end-to-end product solutions for financing and risk management, while Deutsche Bank again flexes its muscles in the structured trade finance category. The supply chain finance honours are shared by Standard Chartered, which wins the Best Service Provider for Supplier Finance, and United Overseas Bank, which makes the grade in the distributor finance segment of the business.
Over in Hong Kong, HSBC scoops the key awards as Best Service Provider for Transaction Bank, Cash Management, Trade Finance and E-solution Partner Bank. One particularly outstanding solution implemented by the bank allowed the insurance company AIA to modernize its Hong Kong collection process for both new business premium and renewal premium collections.
HSBC was among the first banks to instigate faster payment system (FPS) for both retail and corporate clients as part of the official launch by HKMA, offering the full suite of capabilities, including the ability to receive and pay using the QR codes
BNP Paribas receives the nod as the Best Service Provider for Supply Chain Finance, implementing noteworthy solutions for Tom Tailor Group, Lenovo PC HK and Shandong Nanshan Aluminum Company. Booked in Hong Kong, the uncommitted supplier finance programme for Tom Tailor can activate the sustainable option and give an added incentive for their suppliers to improve their ESG (environmental, social and governance) standards, thus benefitting the environment and enhancing Tom Tailor’s brand image.
The biggest winner in South Korea is Standard Chartered, securing the Best Service Provider award in four categories – Transaction Bank, Cash Management, Trade Finance and Supply Chain. In addition, this UK-headquartered bank also snares the Best in Treasury and Working Capital for SMEs.
The bank implemented a cash management solution for Seoul Smart Card Corporation, which enabled the company to automate its reconciliation process through virtual accounts and reduced the processing time for bulk payments with host-to-host service linkage.
Another client, Nexen Tire, was provided with US dollar bill discounting against buyer risk, a solution resulting in the extension of its days’ payable outstanding from the existing 60 days to 180 days.
Deutsche Bank won Best Service Provider for Liquidity Management, implementing solutions for BAT Korea, streamlining its collection process and increasing the company’s liquidity position; and for Cargill Agri Purina Korea, which allows the company to make better use of its excess funds – usually trapped in Korea – as they are shared with other Cargill companies overseas.
CTBC Bank received the most plaudits in Taiwan, chalking up the accolades as the Best Service Provider in Transaction Bank, Trade Finance and Supply Chain.
Last year, the bank collaborated with shipping company Yang Ming Marine Transport Corporation and ABS resin maker ChiMei Corporation in initiating the first proof-of-concept trade finance transaction by using blockchain technology in Taiwan. The transaction was completed via a blockchain platform instead of transmitting physical papers. CTBC is also the first Taiwanese bank to join a global blockchain project – Voltron platform – which aims to digitize trade finance documents.
In terms of supply chain, the bank helps clients address their existing bottlenecks through solutions to improve their cash conversion cycle and provide suppliers/buyers with an additional funding source.
Taipei Fubon Bank retains its cash management honours in Taiwan, posting a higher transaction volume on its Fubon business online. It continuously invests to innovate its product offerings, including in payment services. Another repeat winner is E.Sun Bank for the Best in Treasury and Working Capital for SMEs, aiming to support the sustainable management of these SME enterprises and allowing them to focus on business development.
For the complete list of winners, please click here.