Close to half (45%) of businesses in Singapore have a well-defined digital strategy, making it the highest proportion in the Asia Pacific (APAC) region, overtaking Japan in 2019, according to the DBS 2020 Digital Treasurer Survey.

The survey, which polled around 1,700 corporate treasurers, CEOs, CFOs, and businesses around the region, revealed that Hong Kong and Japan came in second and third place at 44% and 41% respectively, while the Philippines and Vietnam rounded up the bottom with only 10% and 8% of businesses being digitally-ready.

The numbers still put businesses in APAC behind their peers in the UK and US. For instance, almost half of the businesses in the latter have well-defined digital strategies compared to the two in 10 in APAC.

With Covid-19 accelerating the need for digitalisation, about 99% of businesses in APAC have indicated that they are facing external pressure – including changing customer consumption patterns – to transform digitally.

“The impact of technology on businesses has never been more apparent than now. Amid the storm that the pandemic has caused, digital solutions have become a lifeline for most businesses globally, regardless of size or industry,” says Tan Su Shan, group head of institutional banking at DBS Bank.

“As we embark on the ‘next normal’, we must chart a new direction and stand ready to constantly change and adapt to new circumstances. With major and likely irrevocable shifts in consumption, work and travel patterns brought about by Covid-19, the coming decade will be more disruptive than the last, and businesses have to be ready for a lifelong journey of metamorphosis to survive and thrive,” adds Tan.

Despite understanding the need for change, the same businesses are facing difficulties in adopting new practices, with the top three being speed of change (80%), complexity in execution (75%), and the lack of digital talent (64%).

This is compared to the UK and the US, where about 90% of nine in 10 businesses cited that their main challenge was to keep up with the regulatory environment.

Cash management, as well as trade and supply chain financing, at 33% and 30% respectively, represent the two biggest investment areas for APAC businesses in terms of digital spend. The findings are similar to the preference in businesses in the UK, while corporates in the US are focused on risk and compliance reporting (34%) and cash management (26%) solutions.

In APAC, banks remain the most popular partner for businesses to remain abreast of fintech innovations and identify the right solutions, with 70% citing this preference, compared to 69% in 2019.

The trend is largely prevalent in Vietnam, Indonesia, Thailand, Malaysia, and South Korea at 90%, 84%, 82%, 80%, and 76%, respectively, where businesses tend to be more dependent on their banking partners for strategic guidance.

Conversely, businesses in Singapore (80%), Hong Kong (73%), and China (69%), prefer to engage with fintech companies directly.

APIs and enterprise cloud solutions the future

Looking ahead, DBS says the use of APIs and enterprise cloud solutions in bank connectivity is expected to continue gaining traction among businesses across the region.

APIs remain the most popular mode for bank connectivity with almost half of APAC businesses (48%) using it in their current operations as compared to cloud-based solutions (31%). But a big shift to cloud is expected in the next three years as it has proven to be a useful tool for businesses to migrate data seamlessly.

Almost six in 10 (59%) businesses in APAC are looking to implement cloud-based solutions in the next three years, with about three in 10 (29%) businesses planning to implement cloud infrastructure in the coming 12 months.

“The Covid-19 pandemic is the crisis of a generation and has reset the way countries and businesses operate… However, every crisis also has its silver lining and there is no better time for corporate leaders to grab the bull by its horns and re-engineer their business blueprints quickly to adapt to the changing landscape to build our businesses back better and stronger,” says Tan.

DBS will be holding its annual DBS Digital Day on September 16 and 18 to help businesses better understand the implications and opportunities from the shifting landscape.

Notable speakers at the event include Minister for Communications and Information S Iswaran, managing director of Amazon Web Services Asesan Conor McNamara, SEA president for JD.com Soon Sze Meng, and DBS Group CEO Piyush Gupta.

Shares in DBS closed 5 cents lower, or 0.2% down, at $20.46 on September 14.