Aftermath of Covid-19: Innovation in trade and cash management | Bahasa
On 6 July, John Laurens, Group Head of Global Transaction Services, DBS Bank, led a media briefing session on the topic; Aftermath of Covid-19: Innovation in trade and cash management, garnering media turnout across Singapore, China, Hong Kong, India, Indonesia, Taiwan and the UK.
Mr Laurens shared that Covid-19 has been driving shifts in trade and supply chains and added that trade volumes have been impacted by the overall slowdown in the global economy.
The World Trade Organisation (WTO) estimates global trade will fall by 18.5% in 2Q2020 compared to the same period last year. This is supported by the forecasts from the International Monetary Fund (IMF) that the volume of goods and services trade will decline by 12% in 2020. Trade volumes also fell across all markets month-on-month in April, though Emerging Asia has been the most resilient (US -16.8%, Europe -20.1%, Emerging Asia (including China and India) -6%).
Other key takeaways from the session include:
Challenges faced by businesses across Asia
- Supply chain disruption leading to delay in cash realisation
- Globally markets have seen demand curtailment, forcing cancelled orders, late payments and prolonged factory shutdowns
- Cash conversion cycles have therefore lengthened
- SMEs, especially, struggling with adequate cash flow and access to capital
- Operating challenges amidst lockdown
- Asian production centres having been under labour workforce restriction face logistical bottlenecks
- Work from home arrangements make it operationally difficult to continue manual workflows (e.g. wet signatures)
- Disruption to transmission of physical documents and claiming of goods at ports
- Disrupted access to liquidity
What does the “new normal” look like for businesses
- Replumbing/shortening of supply chains through reshoring/nearshoring
- Shift of major supply chains into ASEAN
- Diversification of manufacturing or supplier sources
- Rise of low-costs markets, including Vietnam, Bangladesh, India, Indonesia
- Rise of ecosystems with entire supply chains participating on a single platform
- Facilitates greater transparency; enables harnessing of data analytics
E-commerce gaining greater importance
- Digital innovations to support revival of economies in the aftermath
- Employment of 5G and the advent of new 5G-enabled business models/opportunities
- Application of IoT-based solutions across commercial, risk management and sustainability agenda
- Accelerated shift to cloud to reduce technology investment costs and scalability (up and down)
- Adapting to the new future of work
- More home-based employees and reduced business travel
5-year outlook for DBS’ transaction banking business
- Global leadership in digital transaction banking maintained
- Rapid pace of digital adoption to continue as analogue-based transactional and informational activities transition to fully digital processes
- Extensive cloud/API-based interactivity with customers and ecosystem partners to be the norm and creating multi-dimensional platform business opportunities across the wholesale bank franchise
- Data-driven business model to bring out cross-sell opportunities across digital client advisory and servicing, analytics-based financing, treasury and risk management
- New product development driven by technological advances in areas such as 5G, IoT and digital identity
- Growth in key/strategic markets remains robust
- Continued double digit volume growth in strategic growth markets, including India, Greater Bay Area and Indonesia
- Continued exponential growth in the Vietnam market and Australia transaction banking business build completed and well established.
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 11 consecutive years from 2009 to 2019.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all our 28,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com.