Supporting start-ups and SMEs with cutting-edge digitalization

OCBC Bank is one of Singapore’s most established banks, and digitalization has played – and continues to be – key to its success. The bank has channelled a considerable amount of its digital efforts on the small and medium-sized enterprise banking sector that by its nature includes a collection of hungry, rapidly growing businesses that are looking for an edge in fiercely competitive fields.

This edge often comes in the form of digitalization. A recent ASME-Microsoft study showed that Singapore SMEs that embrace digital transformation expect to see average revenue gains of 26%. And according to OCBC Bank, as of 2018, sixty-two per cent of its SME customers are digitally active. This is welcome news especially considering that digital customers generate three times the revenue of non-digital customers. 

“We think it is important to help SMEs start right, which means starting digital from the get-go,” says Tan Chor Sen, head of international at OCBC Bank’s global commercial banking division. “It is not typically the first thing that they think about so we feel that it is important for us to encourage the adoption of digital solutions right from the start.”

While the bank offers a business mobile banking app, Mr Tan stresses that true digitalization means digitalization across every facet of a business such as in “accounting, marketing and HR” services. 

Stepping in to help SMEs in relation to these services might seem uncommon territory for a bank, but providing such beyond banking services are necessary as the bank strives to provide its customers with the necessary tools to succeed in the disruptive business landscape.

A key launch for OCBC Bank last year was its Digital Business Dashboard, which provides a single platform for SME customers’ business data, including not just banking data, but marketing, HR and accounting data. The platform highlights key information about performance, as well as patterns and trends, thus giving SMEs a clear and instantly accessible overview of their business and enabling decisions to be made on this basis. 

It is an example of how digitalization is driving the connectivity of previously siloed information. The more informed a business is about its entire operations, the better equipped it will be to improve and add value wherever it can. Such is the competitiveness of many SME markets – even incremental improvements in speed, costs or information available to management can help leapfrog the competition. 

“With data analytics tools, companies have insights into customers’ profiles and buying behaviour so that they can improve their sales strategies,” says Mr Tan, adding that SMEs unfortunately tend to delay investing in such tools despite their benefits.

“When it comes to accounting,” he says, “many business owners have little or no visibility of their cash flow positions, which is the pulse of the business. One way to address this is to adopt a cloud-based accounting software solution, which gives instant updates on the health of their business. Book-keeping is simplified and they can easily monitor their sales and expenses.”

Digitalization is a core strategy that OCBC Bank will employ to consolidate its position and drive growth, for its SMEs both at home and globally. 

Besides introducing new beyond banking technologies like the Dashboard, the bank has turned to technology to streamline its processes, like its account opening process. It was the first Singapore bank to roll out a digital instant account opening service, and this year, the bank made it possible for start-ups to open their bank accounts immediately after incorporation rather than having to wait one day. Loan applications have been digitalized as well. This year, the process was improved to make it faster and less cumbersome. Applying for a loan can now be done using straight through application, in under 5 minutes.

The sooner businesses have their accounts set up, the thinking goes, the sooner they can start receiving payments, and with a loan approval in hand, they will have the assurance to go out and start bidding for contracts.

“With digitalization, the business owner can keep a close eye on what matters to them and can make informed decisions,” says Mr Tan. 

“My advice to those who are unsure of what tools are right for your business is to speak to fellow business owners on how they have brought their businesses to the next level using digital solutions. For Singapore businesses, they can consider taking advantage of the Start Digital initiative by the Infocomm Media Development Authority, which allows SMEs to try out two digital solutions at no cost for at least six months.” 

Improvements have also been made on the trade finance front, which is notoriously paper-heavy. Digitalization has enabled the bank’s customers to make online applications for letters of credit, banker’s guarantees and invoice financing, and to make use of customized templates for new or repeated applications.

The bank’s digitalization push has extended to its regional franchise as well, with cutting-edge technology including the new ONe Mobile application in Indonesia, which allows SMEs to start a new business account relationship through the digital account onboarding module. In Myanmar, a proprietary model is being used by the bank to improve turnaround time by straight-through processing, thus reducing the time taken from weeks to days. 

“We want to continue being at the forefront of innovation, and to do that, we need to continue putting in the effort to better understand our customers’ digital consumption journey,” says Mr Tan. “This will allow us to give better access to banking services to our SME customers, help them to operate better and, by embedding ourselves in the SME ecosystem, help them to buy and sell better.”