How treasury and finance are leaning in to the new reality

Treasury and finance leaders are reimagining their roles. Once seen primarily as gatekeepers to cash and managers of financial risk, their guidance has become critical to helping businesses navigate economic, technological and regulatory shifts.  

New research from DBS, based on a survey of 570 senior leaders across nine sectors and 15 markets, shows how the two functions are closely involved in reconfiguring their organisations’ supply chains, securing diverse sources of financing and managing the uncertainty of value creation in new markets. They are also enabling long-term growth as businesses pursue the opportunities presented by global markets, particularly within Asia-Pacific.  

Reactive to proactive  

The role played by treasury and finance in the transformation agenda is championed by their internal business partners – especially those in European and Asian markets.  

Six in 10 of the survey’s corporate strategy respondents agree that their collaboration with treasury and finance is key to attaining common strategic goals, while around the same proportion assert that treasury and finance are critical to success in the new wave of globalisation. European executives are the most likely to feel this way, followed closely by those in high-growth Asian economies including Singapore and India. 

Sugandha Singhal, Head of Treasury at Indian chemicals major SRF Limited, explains how treasury used to be reactive and focused on backend support, but is now integral to decision-making and business-model development. “Our interaction with marketing, sourcing, and logistics has increased, especially in response to compliance challenges,” she says. “We help navigate business strategies through risk hedging and negotiating financing and payment terms.”  

Treasury and finance are also increasingly driving sustainability and decarbonisation initiatives by securing transition financing and supporting businesses in meeting complex new reporting requirements. DBS’ research findings reflect this new dynamic, noting that more than nine in 10 respondents help to formulate corporate strategy. 

Stepping up on diversification 

As businesses worldwide grapple with foreign-exchange and interest-rate volatility, their treasury and finance teams are supporting the diversification of revenue streams and supply chains, especially within the Asian business context.  

Cited by more than three-quarters of the executives in the survey, innovating new products and services is the top focus area for those diversifying their businesses. 

Julain Prevost, Director of Financial Management at Singapore-based Lidl & Kaufland Asia – the regional sourcing arm for European retailer Lidl International – says her firm has responded to recent market volatility by becoming more dynamic, flexible and open to change.  

“Recent developments in the European market have directly impacted our business in Asia, disrupting our predictive models and cash flows,” she says. “In response, we have become more innovative, launching new initiatives and preparing for future disruptions.” 

Treasury and finance teams are also helping procurement to reinforce business-critical supply networks. Indian stainless steel giant Jindal Stainless has diversified its product mix to ensure it is not dependent on a single industry for more than 20 per cent of its revenue. It is also sourcing scrap from nearby regions including Thailand, Malaysia and the Middle East, cutting lead times, mitigating forex and commodity risks, and allowing a faster response to shifting market demands. 

“To manage the volatility of nickel prices, a key raw material in stainless steel, we have developed a natural hedge in our system that helps us maintain more consistent margins,” says Anurag Mantri, Executive Director and Group CFO at Jindal Stainless.  

“By monitoring the proportions of nickel required to deliver the specific orders in our booking systems, while maintaining an agile manufacturing process, we can pause heavy nickel-bearing contracts if the price makes them unprofitable,” Mantri adds.  

A culture of constant transformation 

As well as embracing generative AI, the DBS study explores how treasury teams are championing digitalisation and data-driven business models.  

"Our teams are motivated by transformation,” notes Marie Hong, Head of Treasury, Asia, at insurer Manulife. “They feel more valued by business partners as they shift from transactional tasks to strategic activities that leverage digital tools and analytical skills."  

Changing the treasury and finance operating model so radically does, however, involve a cultural as well as a technological shift. “The ambition for our treasury transformation is to focus attention on core business activities, enabling top-line growth and creating a strategic business partnership role for treasury,” Hong says. “It is not just about changing systems but also about shifting mentalities.”  

Read the DBS Pivotal report to find out more about the changing role of the treasury and finance function.