(27 February 2025 – Asia) Advances in digitisation and recognition of the value of addressing specific local issues promptly are encouraging multinational companies to take a closer look at the merits of regional treasury centres (RTCs), TreasuryToday reports.
Senior treasury and finance experts in Asia in particular are supportive of increased regionalisation. In its latest annual report, Tata International noted that it had established a global physical cash pooling regional treasury centre in Singapore. This model consolidates temporary surplus bank balances from various tax-friendly geographies including the US, UK, Hong Kong, UAE and Singapore across divisions and is multicurrency. By centralising these funds in Singapore, the company says it ensures optimal utilisation and management of its financial resources, reducing the need to finance debt.
In terms of talent, RTCs can attract skilled professionals who are familiar with the local market and regulatory environment, which is crucial for effective treasury operations and can lead to better decision making and strategic planning. Other benefits include enhanced liquidity outcomes, more efficient working capital management and lower AP/AR management and execution costs according to research conducted by East & Partners.
“Local tax planning and advisory expertise, ‘connectedness’ with regulatory authorities and deeper knowledge of their industry sector are key attributes” commented East & Partners Global Head of Markets Analysis, Martin Smith.