Liquidity and foreign exchange (forex) management has become a greater concern for finance leaders, leapfrogging to second place among companies’ priorities from seventh place last year, according to a new global survey by DBS.
The pivot comes as companies have begun planning to strengthen financial stability in lieu of higher upfront costs and potential inventory stockpiling due to increased market volatility.
To better understand how finance leaders are steering their organisations to weather the oncoming headwinds, over 800 finance leaders across seven sectors and 14 markets were surveyed by DBS.
Respondents were surveyed in two batches: before and after the US trade tariff announcements in April.
According to DBS’s 32-page report, titled “New realities, new possibilities”, more than one in two respondents are exploring more innovative solutions including integrated payments, blockchain-powered capabilities and the setting up of regional treasury centres to better manage liquidity and forex risks.
The importance of leveraging data-driven financial intelligence to strengthen decision-making remains the top priority for companies over the next five years.
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From this, data visualisation and security monitoring tools in particular were highlighted among respondents to be useful in enhancing treasury and finance functions.
Placing third on their priorities is strengthening working capital efficiency, as companies recognise the need to optimise financial returns while enhancing financial flexibility.
Some 69% of respondents indicate possible Gen AI-powered solutions to optimise inventory forecasting, overcome prolonged receivables collection periods and improve cash conversion cycles.
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Ongoing priorities
With an increasingly complex business landscape, agility, operational resilience and sustainability stand out as key focuses for companies to improve on.
About 50% of finance leaders surveyed note that supply chain reconfiguration continues to be a priority for risk diversification and a more resilient manufacturing footprint.
A similar proportion plan to review their capital costs by optimising the mix of equity and debt financing.
Meanwhile, one in two companies highlight trade finance solutions and cross-border payment methods to be key strategies for supporting their transformation agendas.
In addition, enabling green initiatives and ensuring compliance with sustainability standards remains a priority for half of the survey respondents.
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With regards to the various approaches in advancing sustainability, 77% of respondents favour using digital tools to enhance the rigour of ESG reporting, 64% view the need for partnerships with ESG ecosystem networks and 63% have a preference for sustainable trade finance solutions.
Han Kwee Juan, group head of institutional banking at DBS, says: “For businesses, navigating the path to resilience lies in proactive adaptation across several key dimensions, including strengthening data driven decision-making, optimising liquidity and working capital, diversifying supply chains and building new technology capabilities. These enable businesses to not just tide through immediate challenges but to achieve long-term competitive advantage.”
Lim Soon Chong, group head of global transaction services at DBS, adds: “To future-proof themselves in a changed world, finance leaders are turning to strategic partners for in-depth insights and a broad suite of solutions. As a leading transaction bank in Asia, DBS has been leveraging our capabilities and regional connectivity to support our clients as they navigate the challenges and opportunities that come with growth.”
