Hong Kong has emerged as a premier regional treasury centre in Asia, along with Singapore and Shanghai, in view of its tax and regulatory framework, financial resilience, and deep talent pool, a new report finds.

The study was was commissioned by DBS and conducted by FT Longitude, the specialist thought leadership division of the Financial Times Group. It was based on a survey of 70 senior executives from 15 markets across Asia-Pacific, Europe, and North America. Over 85% of respondents were from companies with an annual revenue of over US$1 billion.

Three in 10 executives in the survey rank Hong Kong SAR as the strongest regional treasury centre location in the region. Singapore also comes on top across several dimensions, whereas Shanghai is highly rated by executives in general.

For businesses in Hong Kong, the top strategic priorities over the next two years are improving productivity and operational performance (89%), building topline growth in Asia (81%), and pursuing decarbonization and net zero (81%).

Notably, 63% of Hong Kong-based executives also see business diversification as a key goal, with many focusing on innovating their products and services, rethinking their sources of financing, how and where they manage the treasury and finance function, and supply chain – 77% cite each of these as a priority.

“Asia is the epicentre of growth in the new era of globalization, with businesses seeking new consumer markets and manufacturing capacities in the region’s emerging economies, says Wallace Lam, managing director and head of institutional banking group at DBS Bank Hong Kong.

“Within companies in Hong Kong, we see a specific focus on growing topline in the region and decarbonizing the business while enhancing productivity. This is creating impetus among treasury and finance to secure more favourable financing arrangements and support further growth across the region.”

Boris Chan, managing director and head of global transaction services, DBS Bank Hong Kong, adds: “As businesses navigate the next phase of globalization, treasury and finance teams are playing a pivotal role in driving this transformation, where many teams are heavily involved in corporate strategy (96%) and digital transformation (84%).

“Hong Kong, as a key gateway to mainland China and major global trade and logistics hub, offers a strong environment for regional treasury centres and is well-positioned to capitalize the emerging technologies in helping organizations seizing new opportunities for growth and innovation.”

While Hong Kong remains a key business centre, the report finds that 40% of respondents cite access to capital and financing as the chief factor perceived to be hampering growth for Hong Kong-based businesses, along with economic downturn, geopolitical uncertainty, and climate risk.

The study also sheds light on the rapidly evolving role of emerging technologies within Hong Kong’s treasury and finance functions. According to the findings, 56% of executives based in the city said generative artificial intelligence is helping them to overcome long-term talent shortages and related challenges within their treasury and finance organization.

Hong Kong SAR treasury and finance teams are heavily involved in corporate strategy (96%), reflecting their expertise in risk mitigation and regulatory compliance. This is followed by procurement and supply chain (87%) and digital transformation (84%), the latter perhaps reflecting the benefits of emerging technologies for these teams and underlining their roles as enablers of organizational agility and efficiency, according to the report.