Gilly Wright, Global Finance’s Transaction Banking Editor, talks to Melvyn Low, Group Chief Strategy and Transformation Officer & Head of Global Transaction Banking at OCBC, about how ASEAN region businesses are optimizing cash management strategies to stay competitive.
Solutions that are convenient and quick to implement are essential for businesses that need to collect payments more easily and receive real-time notifications. Further, the ever-faster application of QR codes requires merchants to keep up with expectations among customers that use payments through this channel.
Addressing these demands, OCBC OneCollect is a digital solution for merchants that enables them to accept QR-code payments via mobile, rather than requiring a physical point-of-sale terminal. Real-time notifications are then sent when payments are successful.
“We are helping our clients navigate that landscape to collect and pay better,” explained Low.
Bridging the cross-border gap
OCBC OneCollect has expanded across Southeast Asia, with unique features and capabilities available in Singapore, Malaysia and Indonesia in line with the needs and preferences of the local markets. This makes the solution suited to cross-border payments, too. For example, the PayNow QR in Malaysia can be used by Singaporeans, and vice versa.
“The regional objectives of cash management haven’t changed,” explained Low. “It’s all about visibility, mobility and optimisation of payments and cash balances.”
Notably, OCBC’s approach has been to help clients expand regionally by enabling them to see their account balances everywhere they operate. “Our e-banking platform offers a consistent view of account balances, regardless of the market,” he added.
Counting on greater connectivity
The adoption of digital tools more generally is becoming commonplace for businesses in Asia.
In turn, as they put their products and services online and make them accessible via apps, they need application programming interface (API) connectivity.
“We see three times more requests for APIs than host-to-host with the Asian clients we deal with. One of the things we’ve done to help regionalisation is create regional connectivity through a single node in Singapore, to collect the APIs and then distribute to the countries for payments for our customers. We’ve also developed a similar node in China because clients would prefer to connect onshore and then have the payment instructions distributed across Southeast Asia.”
An innovative approach
Other areas undergoing modernisation in Southeast Asia are liquidity management and account rationalisation. Given the importance of liquidity management for corporates across the region, OCBC is offering bespoke sweeping solutions in Southeast Asia and Greater China – in the form of both domestic and cross-border sweeps.
“Customers are no longer keen to open multiple bank accounts,”
Melvyn Low, Group Chief Strategy and Transformation Officer & Head of Global Transaction Banking, OCBC
OCBC, therefore, has rolled out a virtual account solution to offer ‘receive on behalf’ and ‘pay on behalf’ services to support some businesses, especially those wanting to split their funds. This also has benefits for liquidity: by only using one main account, a company can optimise its funds.
Another step forward for OCBC in Asia is its innovative approach to helping clients address anti-money laundering and sanction-screening hurdles when accessing real-time payment rails in domestic markets where they do business. “We’ve built a new way of making payments, with API in and instant payment out, so we can meet the various regulatory requirements for regional corporates,” explained Low.
More recently, OCBC also made its foray into commercialising blockchain technology in payments. The bank is working with a government entity that has many infrastructure projects to manage these through conditional payments.
“We made a tokenised deposit and wrapped it with the smart contracts they need for conditions to be met,” said Low, pointing to this first-in-market solution. “They can issue these tokens to their main contractors and subcontractors for ongoing payments in the project, which will be transformational for the way the construction industry manages payments.”
Keeping up with digital demand
The proliferation of digital solutions will likely continue to have a profound effect on cash management throughout Southeast Asia.
Low points to passage of the GENIUS Act in the U.S. as a clear regulatory framework for U.S. dollar-backed payment stablecoin issuers that can help stablecoin payment companies, traditional financial institutions and consumers navigate stablecoins with more clarity. “We anticipate stablecoins and tokenised deposits in U.S. dollars will start to come to the market.”
Two main impacts are foreseen by Low: Firstly, in supply chains as large western multinationals work with suppliers in Southeast Asia. And secondly, via the potential use of retail tokens in the region.
The key is to create a standardised way to manage regulated stablecoins and tokenised deposits within the Southeast Asian banking framework so that businesses and retail investors alike can accept and receive these tokens.
Low also expects the use of alternate currencies beyond U.S. dollars for trade transactions, such as the international processing centre for e-CNY in Shanghai, will be transformational for Asia.
