Research by DBS on digital transformation found widespread enthusiasm among companies to digitalise customer experience and engagement but they faced significant challenges in achieving success.
The findings were based on a global survey of 1,225 executives from commercial and finance/treasury teams across 22 markets in APAC, Europe and the United States, representing one of the firsts of its kind to balance the perspectives of these two groups.
The research revealed that 64% of businesses globally carried out a structured approach to customer-facing digital transformation with a further 33% pursuing ad-hoc upgrades.
Nonetheless, just 17% said their activity in this area had been very effective, and about four in 10 (39%) said their transformation efforts had either failed or were underwhelming.
Singapore companies (70%) led their global peers in taking a strategic, consistent or radical approach to digitalising customer experience and engagement. Their key priorities for digital transformation were increasing efficiency (47%) and improving collaboration across functions and teams (37%). Shared adoption of a strategic vision was most important (41%) from a corporate culture perspective to support successful digital transformation.
Conversely, unclear organisational strategy (45%) and gaps in talent (40%) were the top barriers preventing organisations from achieving faster progress in transforming digitally.
Lim Soon Chong, Group Head, Global Transaction Services, DBS, said, “Besides investing in technology, the market leaders in digital transformation understand that new skills are needed for a more digital future. The market leaders act to build a strong talent pipeline and to inculcate a partnership mindset across teams.”
Most frequent challenges faced by Singapore companies when their finance and commercial teams worked together towards digital transformation were: different ways of measuring success (38%) and different approaches to calculating risk (37%).
The respondents cited Cloud (61%), advanced analytics (53%) and real-time payments (41%) as the most important digital and payments technologies for realising digital transformation within treasury and finance.
Within the treasury function, they prioritised digitisation in investments (50%), cash and liquidity management (35%), procurement (32%), financial reporting (31%) and corporate finance (23%). In partnering with external companies to develop banking innovation and digital transformation, close to half (40%) preferred partnering with banks, fintechs (23%), and a combination of partnerships with banks, fintechs and consultants (26%).
To help businesses achieve commercial goals, supply chain/procurement (34%) was the most urgent area that needed digital transformation, followed closely by sales & marketing (32%) with HR being the least.
The research also found that the treasury and commercial functions of transformation leaders have a joint vision of digital transformation centred around a broad purpose statement about customer experience.
Tan Su Shan, Group Head of Institutional Banking, DBS, said, “With the acceleration of digital adoption in a post-COVID-19 world, treasury and commercial functions have to collaborate and adapt to a new way of working that encompasses the use of data analytics, AI and even blockchain-enabled platforms to function more effectively and efficiently.”
“This new way of way of working will necessitate a cultural mindset shift to one where business owners and treasurers are open to using machine-driven models to help make predictions, stress-test risk parameters or just to make more informed decisions,” she added.
She highlighted that digital transformation is a continuous journey for organisations that are willing to take the leap of faith. “Teams need to be aligned on a north star with a clear strategic vision. To be successful, they must also be open to learning by doing, accepting that there could be some failures, be quick to learn from them and continuously improve.”
Today, the skill that treasurers most urgently need is acceptance of risk (47% Singapore vs. 35% global). “Treasury teams here benefit from Singapore’s position as a global financial hub, which has also given them greater influence within their companies compared to others in the region. Treasury leaders should seize this advantage and take a bolder stance in transformation discussions,” Tan added.
Singapore has made clear progress in transformation overall, but it prioritises efficiency over customer engagement. To stand out, she advised companies to adopt more customer-centric transformation and embrace radical innovation to advance in digital transformation.