Fintech ushers in new era for financial sector

Over the next 3-5 years, Wong expects some Fintech start-ups to evolve regionally as a significant number of customers embrace their services while established global and regional banks will have to adapt to the changing landscape driven by technology.
For example, payment will become real time as the infrastructure is being built to usher in the new era.
In Thailand, the government has introduced the Prompt Pay service requiring those who receive public welfare money to register for the e-payment service. The private sector is joining the bandwagon and hopes to cash in on the widespread adoption of e-payment which will further promote e-commerce transactions in the country.
Wong cites China’s Alibaba e-commerce and e-payment services as an example of the emerging digital platform for real-time commerce and payment via mobile and other devices that will engage not only retail consumers but corporate payment will also be affected.
Treasury management is another area being disrupted by fintech start-ups.
Kyriba is another example of how technology has re-shaped online corporate treasury management, according to Wong.
Kyriba’s proactive and innovative approach to treasury management helps reduce funding requirement due to better cashflow forecasting and other features.
According to HSBC’s 2015 Guide to Cash, Supply Chain and Treasury Management in Asia-Pacific, the increasing levels of connectivity between banking applications, systems, platforms and personal devices have affected the role of corporate treasurers.
Hence, fintech start-ups have the opportunities to come up with new solutions to tackle inefficiencies and weaknesses in this area.
The trend has changed how companies do business, resulting in several benefits. For instance, the use of digital documents makes it unnecessary to produce many physical hard copies to execute and verify transactions.
Mobile technology has also allowed corporate treasurers and other finance executives to complete transactions on the move from anywhere at any time so they can focus on innovation and improving efficiencies.
As the majority of devices and systems are now connected, more accurate accounting, increased internal transparency, more access to financing solutions to mitigate risk are now possible to reshape the cash management landscape.
The finance department can also source cost savings across company expenditure online and utilise virtual corporate cards, while negotiating deals, issuing electronic invoices, making transfers, accepting cashless payments and mitigating the risks associated with currency volatility in real time.
In addition, companies can refinance their account receivables seamlessly, improving liquidity management and freeing up working capital in the process, thereby improving organisational profitability and customer service standards.
However, the increased dependence on digital technology has raised concerns about cybersecurity, especially with regard to connected devices and the number of points of entry.
The treasury has become a control centre for accurate decisions and actions, which can be taken in real time to reduce the risk of errors and delay, while making all the information available for decision-making.
In the cases of established regional and global banks, they have the option of joining the bandwagon of start-ups by investing in their ownership as a minority shareholder or considering acquiring the business once proven to have revolutionised the role of treasury.