The Asian Banker’s Transaction Finance Reinvented Conference, held in Jakarta, brought together transaction banking experts to explore how emerging industry developments are rapidly transforming cash and liquidity management, trade and supplier financing and cross-border payments. Panellists also discussed challenges and opportunities for financial institutions (FIs) amid global trade disruption and advancements in technology and digital assets. Global trade disruption takes centre stage in key discussions The escalation of reciprocal tariffs between the United States and China creates unprecedented uncertainty in global trade policy and weighs heavily on corporate investment decisions. “The only thing that we are certain about is this uncertainty,” commented Allen Ng, group head and principal economist, ASEAN+3 Macroeconomic Research Office (AMRO). Although ASEAN and Southeast Asia remain resilient on the back of strong domestic demand and intra-regional trade, economic uncertainty has driven shifts in corporate behaviour across supply chains. With supply chain reconfiguration affecting procurement and finance operations, companies have introduced new invoicing centres, adjusted their hedging strategies, and implemented alternative cash pooling arrangements to better achieve their business goals. The sudden volatility in trade flows has created capacity challenges for banks. “In the last two months, we have seen sudden spurts in export documentation which obviously presents capacity challenges to banks,” said Ankur Kanwar, head of transaction banking, Singapore and ASEAN at Standard Chartered Bank. Kanwar also stated that the current macro environment makes predicting the interest rate cycle particularly difficult. From a cash management perspective, flow volatility has resulted in excess liquidity parked in deposits. “We have seen excess cash parked with the bank, which boosts liquidity but offers little return,” Kanwar added. To help their clients overcome challenges, global transaction banks step in as advisors, assisting them in managing volatility and operational complexities in cash management and trade finance through greater use of digital solutions. AI and blockchain reshape use cases in transaction finance New technologies like artificial intelligence (AI) and blockchain are reshaping transaction finance. Banks are already deploying AI for communication, translation Meanwhile, blockchain is adopted for cross-border payments through consortia like Partior, enabling real-time settlement. It’s also helping to move trade finance onto digital platforms. For example, Standard Chartered Bank recently launched an AI-powered translation tool on its online portal that converts English content into multiple languages. These technologies not only promise to modernise an industry traditionally reliant on manual processes but also transform compliance functions. In the aftermath of the Russia-Ukraine crisis, for instance, compliance remained critical, prompting banks to invest heavily in sanctions monitoring and control frameworks. The panellists agreed that AI helps optimise these compliance processes, but stressed that human oversight and regulatory partnership remain essential. “Deutsche Bank uses AI to make its ecosystem safer, but those trying to exploit the system also use AI. Our innovation focuses on two priorities: delivering the best client experience and strengthening compliance and control through personnel,” said Sebastien Avot, APAC head institutional cash and trade finance at Deutsche Bank. In trade finance, current processes remain largely paper-based, with 70-80% reliant on manual intervention. The panel highlighted the importance of digital tools such as AI-powered document processing, robotic process automation (RPA), and blockchain to streamline financing workflows. Many financial institutions have adopted these solutions; for example, “HSBC implemented AI to cut manual checks by 90%,” said mentioned Zhang Yongcheng, co-founder of Remi Technology. From a payments’ perspective, panellists highlighted the growing role of AI-driven compliance in cross-border payments. However, they emphasised that its effectiveness depends largely on improved data quality through enhanced payment standards like ISO 20022, to provide richer and more structured data. “When we're looking at rolling out AI from a compliance perspective, you need good data. Else, there is no point having AI if you don't have the data that is rich enough, “said Dean Gillespie, CEO of Islamic Money Australia. On the application of blockchain in payments, panellists illustrated new opportunities for smaller and mid-sized banks to innovate by leveraging blockchain, acting as validators and participants in new payment networks, and serving clients more efficiently. APIs and AI as enablers of intelligent cash and treasury management To reduce funding costs, corporates increasingly require immediate access to and clear visibility of their account balances and cross-border transactions. Prioritising liquidity optimisation and efficiency, treasurers have turned to digital cash management solutions for real-time insights and informed decision-making. Today’s treasury challenges differ greatly by company size, industry, and geography. Because regulations differ so widely, no single solution fits all treasury needs. Businesses also differ in their demand for real-time insights— some, like e-commerce, need immediate data, while others do not. "Do you really need that real time information? Maybe it's good to have, maybe it's not a must have. It really depends on the company, “Shinichiro Yamazaki, head of transaction banking Asia Pacific at Sumitomo Mitsui Banking Corporation (SMBC), questioned. Zooming in on Indonesia’s challenges, Anne Suhandojo, country head of global payments solution at HSBC Indonesia, pointed out that local companies hold accounts with multiple banks, complicating fund consolidation and efficient use of excess cash. She said, "There are two most important challenges for companies in Indonesia: multibank relationships and manual processes that slow down reconciliation and liquidity management.” She also stressed that companies are moving towards centralised liquidity management, with cash sweeping and cash pooling solutions helping consolidate dispersed funds into a single main account. Panellists agreed that AI and application programming interfaces (APIs) play major roles in enhancing corporate connectivity for real-time account information and liquidity optimisation. APIs enable faster, richer data flows, improving reconciliation and cash forecasting, while AI automates complex processes such as foreign exchange (FX) optimisation and reconciliation, reducing human error and increasing speed. As FIs embrace technological advances, panellists emphasised that tech adoption should be guided by clear business problems rather than technology for its own sake. With AI increasingly integrated into treasury functions, they highlighted practical applications— such as generative AI (GenAI), to enhance reconciliation in cash management. "We spent about $4 billion just on AI, and you have to apply it with the right rules and risk management,” said Chandana Thanthrige, APAC head for FX products at Bank of America, illustrating AI and API’s role in optimal FX and payment execution. Instant domestic payments redefine correspondent banking and cross-border payments The growth of real-time and instant domestic payments is driven by the convergence of consumer and business expectations. Participants noted that developments in domestic retail payment systems—such as DuitNow in Malaysia, UPI in India, PromptPay in Thailand and PayNow in Singapore—have changed how consumers and small and SMEs think about speed and transparency when making cross-border payments. Traditionally relying on batch processing and limited business hours, correspondent banking often struggles with delays, poor transparency and inefficiencies, compared to domestic instant payment systems. As demand for real-time, 24/7 payments grow, cross-border payments face increasing pressure to adapt. To improve cross-border payment capabilities for FI clients, global correspondent transaction banks are building smart routing platforms that offer flexibility in choosing payment channels—ACH, RTGS, or instant payment schemes— based on clients’ needs. Raj Raman, market manager for international payments treasury services APAC at BNY, discussed how BNY partnered with Australian banks to access the New Payments Platform (NPP). This initiative aims to gradually build a global network of connected instant payment corridors. Along with other participants, Raman emphasised that collaboration, not isolation, is key to enhancing cross-border payments. The transformation requires cooperation among correspondent banks, domestic banks, fintech providers, regulators and industry bodies to harmonise standards, compliance processes and technology platforms. “We are on a journey to access all real-time payment schemes globally to deliver real-time payments, but not all banks or ecosystems are ready yet,” he said. The discussion then shifted to interoperability and how ISO 20022 could pave way for unified standards in cross-border payments. Atul Bhuchar, head of transaction banking product at SMBC, explained the importance of ISO 20022 in making payment messaging structured and data-rich. He highlighted use cases such as faster anti-money laundering (AML) checks, improved compliance, and enhanced operational efficiency in cross-border payments. The rich-data enabled by ISO20022 facilitates Straight-through-processing and Straight-through-recon for corporates, thus improving their cashflows and optimising working capital cycles. However, Bhuchar warned that global adoption of ISO 20022 remains fragmented. “Different banks are on different journeys in adopting ISO 20022, and the weakest link in the chain drives the end-to-end solution,” he noted. In a progressive domestic payments market like India, adopting ISO 20022 remains a work in progress . Amit Kumar, cash management head at Kotak Mahindra Bank discussed Indian banks’ significant investment in platforms to meet corporate customers’ evolving expectations. He mentioned that payment systems in India now operate nearly 24/7, reflecting growing demand for continuous availability. "India’s payment ecosystem operates 365 days, 24 hours now, reflecting the evolving expectation that payments happen even on Sundays and holidays,” Kumar explained. Resilience and innovation power global supply chains through disruption The ongoing US-China trade tensions and tariffs continue to reshape global supply chains, leading to the rise of regional trade clusters, such as ASEAN and Mexico. This shift drives increased diversification away from China as a sourcing hub. Participants highlighted that this realignment represents a structural shift in global trade, not a temporary one, and therefore reshapes the future of global transaction and corporate banking worldwide. “The world is still globalised, but we are changing the way that we trade,” said Gary Ng, senior economist at Natixis Corporate & Investment Banking. Navigating supply chain shifts, corporates reduce dependence on any single country by capping procurement shares and diversifying suppliers across multiple countries. This approach requires significant financing, longer-term investment, and collaboration between banks and companies. “Most companies are saying I cannot be heavily dependent on one country and boards have implemented caps like 25%, 30%, or 40%, making supply chain disruptions a big agenda for managing customers,” explained Ashutosh Kumar, head of global transaction Banking, Asia Pacific at Mizuho Bank. In their concluding remarks, panellists highlighted the growing role of technology and innovation in how companies and banks management of supply chain disruptions. They emphasised that resilience today is not simply about having buffer stocks or backup plans but about embedding real-time data, analytics, and digital tools to create adaptive and transparent supply chains. Panellists described data as the “most important point” in navigating supply chain complexity. Access to granular, timely data allows firms to monitor risks, track capital flows, and respond swiftly to disruptions. They explained the advanced role of platforms in aggregating transaction data, supply chain maps, and market intelligence to help treasury and procurement teams optimise supplier networks and financing strategies. Kumar noted that while many supply chain finance programmes exist, utilisation rates are often low — a gap that technology can help close by improving transparency and ease of use. “Many supply chain finance programmes exist but utilisation rates can be low. Reviving and expanding these programmes through technology is part of the solution,” he concluded.
