Participating in conferences overseas is always a huge learning experience for me. Rather than reading about developments I relish the chance to hear about what it means to real treasurers and what’s most important to them.
GTR Asia 2023 in Singapore earlier this week was no exception to this. There was a real buzz in the air as treasury teams, CFOs, and trade finance functions met to listen to a wide of topics including:
Some of the topics were familiar to what the P&T team hears from treasurers in Western Europe and the US. Increased geopolitical risk, access to finance, managing sanctions lists, counterparty risk, working capital optimisation, cyber-risks, the role of FinTechs – these were common key areas for discussion. However, there were other topics that were considered part of the treasurer’s risk universe. Food security and its implications is not a phrase I hear too often in the UK, but it came up several times at the conference. Part of this reflects where food in the region comes from and the importance of trading to the local economy. But also important was the frequency of floods, typhoons, and other natural disasters which affect traditional harvest patterns. US–China relations are also much higher on the geo-political agenda in the region than they appear from Europe.
There were a lot of FinTechs at the conference – more than I normally see. It is clear that government initiatives in countries such as India and Singapore have encouraged a large number of people to bring a wide range of solutions to market – from platforms serving procurement, sales and working capital solutions to the management of trade inventory and blockchain. Identifying the right partners is a challenge shared across the world and one treasurer told me that he relies on his bank to partner with the Fintechs and provide a stamp of due diligence.
Many of you will be familiar with the MLETR – legislation which will enable the legal use of electronic transferable records both domestically and across borders and reduce the reliance on paper documents. It applies to electronic transferable records that are functionally equivalent to paper-based documents or instruments such as bills of lading, bills of exchange, promissory notes, and warehouse receipts. The UK – Singapore trade corridor will be the first one to go live once legislation is passed on September 20. It was fascinating hearing from a number of participants what difference this will make to reducing fraud, enabling more straight-through processing of trade documents and offering greater transparency over trade-related information. Natalie Black - His Majesty's Trade Commissioner for North-East Asia, South-East Asia and Australasia shared her enthusiasm for the legislation and also her thoughts on the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("CPTPP").
ESG is now a key activity for most treasurers and I was looking forward to learning how important it was in the region. Although ESG featured in many sessions, it was often only in passing. The pressure from a range of stakeholders including banks, insurers and the supply chain seemed less pressing and urgent as it comes across in Europe. Part of this is no doubt the broader range of challenges faced in the region – it’s easy to forget that this region is not a single homogenous trading economy but one with a very wide range of cultural, political and economic differences. It probably also reflects how much further along the maturity curve European businesses are compared to other regions. One business shared how difficult it was to get engagement from its supply chain over scope 3 greenhouse gas emissions. (Though on reflection I am unsure how much easier it is in Europe!)
I didn’t hear as much as I thought I would about generative AI. Perhaps this is because it is of limited application for trade finance - or it could be it’s too early to see its application. Either way this will be an area to watch out for.
The conference was well attended and I enjoyed meeting new companies. However, one thing that stood out was the number of treasury folk from global businesses that I came across. Teams from Rio Tinto, BHP, and Shell (amongst others) were well represented and I was heartened by how diverse (and young) many of them are.
The next GTR Conference will be GTR Nordics in Stockholm on 23 November.
