PODCAST | Growth opportunities in South-East Asia, and the right time for treasurers to pounce

Listen to this podcast on Spotify, Apple Podcasts, Podbean, YouTube, ListenNotes, TuneIn

When corporate treasurers survey the global economic landscape for areas of future growth, one region comes up again and again: South-East Asia. The region enjoys some of the world’s fastest-growing, increasingly sophisticated export industries and an ever-wealthier population – 70% of the Association of South-East Asian Nations (ASEAN) population will be middle-class by 2030.  

South-East Asian economies ended 2025 with accelerating growth, with Vietnam’s economy expanding by more than 8% in Q4. Regional exports and industrial production remained resilient in the face of tariffs and the normalisation of commodity prices.  

However, the region suffers from a micro, small, and medium-sized enterprise (MSME) financing gap of over 60%, and is staggeringly diverse and significantly fragmented. Its treasury needs vary widely between jurisdictions, industries, and time frames; while many aspects follow global trends, others diverge from the usual course. 

Doğa Usanmaz, Reporter at Trade Finance Global (TFG), spoke with Barış Kalay, Head of Corporate Sales, Global Payments Solutions at Bank of America, and Aziz Parvez, Head of South-East Asia, Global Payments Solutions and Asia Pacific (APAC) Business Development Executive at Bank of America, to get to the bottom of banks’ corporate strategy in this fast-growing region. 

Market volatility

Beyond persistent geopolitical developments, the region has also been grappling with its own sources of economic turbulence.

Volatility can be broadly categorised into two buckets: quantitative and qualitative. It can be quantitatively measured when examining “GDP growth and its deviations, foreign exchange (FX) volatility, regulatory policy changes, and equity market movement,” explained Parvez. The recent depreciation of the Korean won, which hit a 17-year low in March this year, is a textbook example of quantitative volatility, driven by a difficult domestic situation and worsened by the recent energy crisis. 

Quantitative aspects are sometimes misaligned with market sentiment. “There are a lot of times when perception seems to belie reality,” explained Parvez. “Most of the analysts had predicted a significant impact on China’s GDP due to the recent US tariffs. However, if you look at the results, China’s exports actually grew,” leading to a record-breaking $1.2 trillion trade surplus last year.

Qualitative measures, on the other hand, include business confidence indexes, geopolitical risk ratings, and consumer sentiment. China’s recent real estate challenges, for example, have been impacting both its GDP growth and bringing down consumer sentiment.  

In South-East Asia, internal and external shocks can have counteracting effects, complicating the overall landscape. “Asian volatility is slightly asymmetric. Often, the upside drivers are domestic: for example, India’s demographics, the artificial intelligence (AI) industry in Taiwan, or China’s property market. On the other hand, the downside risks are externally driven or geopolitical,” said Parvez.

This can make it hard to predict future market developments, but it also makes for an optimistic outlook. As Parvez explained, because of the relentless external shocks which APAC is facing, the region is ostensibly perpetually volatile, even though microeconomic conditions are stable.

Will South-East Asia be a forerunner in real-time treasury?

South-East Asia is an incredibly diverse region, comprising 11 countries with as many different currencies, jurisdictions, and business environments. While treasurers’ priorities are broadly the same across the region – “cash visibility, centralisation, digitalisation, and working capital management,” said Kalay – each country has its own distinct needs and regulations. 

“Other regions of the world, despite their differences, are mostly standardised and centralised markets. But when you move into South-East Asia, complexity increases significantly,” explained Kalay. Countries in the region run the gamut of global banking regulation standards: Singapore, on one end, is a more unrestricted market, while Indonesia and Vietnam are far more restrictive in their cross-border currency flows regulations. 

Managing this fragmentation while seizing the South-East Asian opportunity will almost certainly translate to a growing demand for banking and treasury services, both by retail and business customers.  

The region “brings high fragmentation and high growth. From a treasurer’s perspective, South-East Asia is about managing complexity and balancing growth, regulation, and opportunities,” summarised Kalay. 

One of those opportunities, which has been dominating conversations for the past year in the treasury and payments sphere, is real-time treasury management. But for now, the only sectors that have really been embracing real-time payments are consumer-oriented industries, and “other industries have a broader spectrum of payment timing requirements,” said Parvez.

“Companies like to receive money instantly, but when it comes to payments, they don’t look at real time,” pointed out Parvez. Instead, many companies are looking at “on-time treasury”: ensuring they make payments on time and according to the schedule rather than executing every transaction instantly. 

Enacting a real-time treasury strategy is also slowed down by the preparation involved. Laying the groundwork for real-time or on-time treasury means enacting more instant payments, agile end-to-end processing, and a reliable system that can respond to both the instant demands of modern customers and traditional periodic or batch processing. 

Implementing automation and grappling with the ensuing cybersecurity risk, as well as collecting accurate data, are also key. When it comes to on-time or real-time treasury, companies in the region “are looking to move in that direction, but they also have relevant challenges that they need to overcome – and the associated costs,” said Parvez.

A new FX approach

Regardless of innovation, one of the persistent challenges for corporate treasurers remains FX risk. “Whether it is due to geopolitical events, different growth trajectories across various economies, or different rate cycles, FX volatility is a reality for corporate treasurers,” said Kalay. The strategy to manage this volatility, however, is constantly evolving.

While hedging is still at the core of FX management, many corporates are now centralising their FX payments into just a handful of accounts. The added challenge in South-East Asia is fragmentation. 

The region’s varying levels of controls and different documentation requirements mean that treasurers need to be very structured in how they manage FX, explained Kalay. “This requires more focus on matching revenues with costs in terms of currency; invoicing and paying in local currencies may be localised to one part of supply chains so FX exposure is reduced.”

Treasurers are still looking to banks to help manage the volatility, but their needs are changing there, too. Cash flow forecasting has become “extremely critical” in today’s environment, said Parvez, as it can help companies manage their own risk ratings and manage their cash flows. Corporates are also increasingly looking for structures that give them more visibility over their liquidity, enabling better working capital optimisation.

On the digitisation front, recent innovations in automation mean companies increasingly ask banks for support in fraud detection and prevention. This is partly due to a global regulatory push: “practically all countries have been coming out with specific regulations and guidelines to manage fraud risk, and they expect banks to ensure they have the ability to detect and report those accordingly,” said Parvez.

The world’s economic engine

Perhaps the biggest impact on South-East Asia’s banking environment will be the region’s explosive economic growth. The fast-growing technology, media, and telecommunications (TMT) sector, for example, is projected to grow by a 6.3% year-on-year until 2030, driven by recent massive investments in data centres and AI. The rise of e-commerce platforms, another key source of TMT growth, will trigger a rise in high-volume low-value payments across the region. 

Another rapidly growing sector is healthcare, which is expected to become a $5 trillion industry in Asia by 2030. This will likely lead to a growing demand for business-to-consumer (B2C) payments as technology enables healthcare companies to become closer to their consumers. The rise in mergers, acquisitions, and divestitures in the healthcare sector will also soon create both challenges and opportunities for treasurers in the industry. 

Lastly, and crucially, trade finance will experience a rapid expansion in the region. This is partially driven by the aftermath of the recent tariff shocks: South-East Asia is at the centre of the world’s reconfiguring supply chains and a key link in corporates’ growing ‘China plus one’ initiatives. However, this growth will continue long after supply chains have reconsolidated. 

“Irrespective of the geopolitical dynamics, the growth in the region will trigger the growth in trade finance, both in South-East Asia and APAC as a whole,” said Kalay. 

The trade finance industry has also received increased interest from non-bank investors looking at it as an asset class, which, importantly, “provides additional liquidity into trade finance markets, helping banks and trade financiers penetrate deeper and addressing the trade finance gap,” explained Kalay. An increase in institutional investment also “creates more transparency and standardisation in data, which promotes innovation,” he said.

—

As some economies stagnate and others wobble, South-East Asia marches steadily onwards, driven by resilient supply chains and a healthily growing domestic industry. 

Adapting to South-East Asia’s changing needs and diverse developments will be key for treasurers looking to usher in the next era of global trade.