Which banks are leading in digital business banking?

Asian banks are wowing business customers with tech-powered solutions that bring increased efficiencies and regional operating expertise.

When UOB launched its new cloud-based service for small businesses, it was the bank's latest “go-big-or-go-home” attempt to impress corporate customers with digital technology. The first of its kind in Singapore, the cloud-based service integrates back office processes including payroll and accounting, saving business owners time and money. UOB could have rolled out standard banking services to get the job done, but these no longer excite business owners or keep them loyal. This is why banks are rolling out more technology solutions to help businesses thrive in an increasingly Internet-powered and regionally integrated Asia.

UOB's cloud-based service, for example, provides businesses with a direct feed from their operating accounts with UOB. This allows owners to reconcile transactions like purchase orders and daily takings with their bank statement on demand. Other banks like OCBC NISP are also tapping into the flurry of innovations in financial technology to unlock more value for business customers, a strategy that is fast becoming a competitive necessity.

“Banks need to reinvent themselves in order to survive,” says Low Seh Kiat, director of retail banking group at OCBC NISP. “Banks are being pushed to move beyond their traditional role as enablers of financial transactions and providers of financial products and play a deeper role in the digital and commercial lives of their customers. Leading banks are investing and organising their products and services to be aligned to all these changes.”

He says the fast-changing pace of technology has altered customer behaviour and expectations. Now, they clamour for simpler, more efficient and more rewarding solutions, which only banks that embrace the digitisation trend can hope to provide.

Bigger banks are leading the charge in the digitisation of business banking due to their large operations and sizeable coffers that allow them to make the appropriate technological and security investments. “There are also new security threats and risks that arise from this push to digitisation, hence only banks with a certain size and economy of scale would be able to balance this with the appropriate investment,” says Low.

He adds that major banks with capable leadership and a culture of innovation are in a great position to forge strategic partnerships with promising fintech players, and quickly shift digital gears. “Banks with strong management teams and proven track records of forward-looking vision will ride this mega trend well and stay relevant,” says Low.

Bank Mandiri, for one, is embracing the digitisation trend with plans to launch an array of business products that leverage on technology platforms. The bank is focussing on improving its current lending business process through the development of a single platform. Through the unified platform, all lending business processes in Bank Mandiri can be executed across various retail segments from business banking to consumer. It is also expected to enhance the service level agreement for other business processes.

Bank Mandiri is also developing an end-to-end solution retail product for supply chains to provide the working capital needs of business borrowers. This will enable faster payments and minimise collection risks for the principal and distributors whilst increasing funding access.

Finally, Bank Mandiri is exploring technology to improve the process of opening bank accounts for business owners. Through the use of selfies, and voice and fingerprint biometrics, customers will be able to open an account without needing to visit a branch. Customers will be asked to use their smartphones to process and register their account applications, including sending requirements such as documents and photos.

“The strength of this product is it is paperless, easy to access, fast, and user friendly,” says Asriel Hay, head of transformation, business development department, small business group, Bank Mandiri.

ASEAN integration
Asian banks are also racing to digitise their banking processes in order to better understand the needs of their business customers in the high-growth and lucrative Southeast Asian region, which recently established the ASEAN Economic Community (AEC) last year. Regional integration is emerging as a key consideration for banks that want to do business in ASEAN, and digitisation can play a crucial role in serving millions of customers across multiple south-east Asian countries.

“Banks need to have a strong regional network and in-depth knowledge of the local market to help Asian businesses expand into other markets” says Frederick Chin, head of group wholesale banking at UOB. “In addition, banks need to have strong relationships on the ground, to help their clients navigate through the local regulatory environment and establish connectivity to local business partners.”

UOB signed an agreement with BKPM to allow the former's business banking clients to apply for their Indonesia Principal Licence, an initial requirement for companies that want to incorporate an entity in Indonesia, directly in Singapore without having to travel to Indonesia.

UOB also formed a foreign direct investment (FDI) advisory unit that provides a one-stop-shop service for companies that want to set up operations in Asia. Clients are linked with regional and local partners such as government agencies, business associations and professional service providers, and the digital process further speeds up the setup time.

“ASEAN being an economic region with diverse patterns of social and economic development, means that it would be some time before the region as a whole can be fully integrated,” says Chin.“The challenge is then for banks to help their clients understand how they can navigate the differing landscape in each market.”

With the AEC set to transform ASEAN into a single market and a highly competitive economic region, more businesses in the region will require an increasing number of complex services from cross-border trade to investment. “The AEC and the eventual integration of financial services implies greater competition from new players,” says Masaaki Suzuki, head of JPC/MNC banking at Krungsri. “Banks need to emphasise ‘customer centricity' more than ever – growing with them and matching their evolving needs every step of their life stage.”

Customer centric
In Thailand, for example, Suzuki notes that there is strong current of digital transformation led by the government. Under the policy direction of “Thailand 4.0 Model,” the country is adopting a national e-payment scheme and moving towards a cashless society.

The Bank of Thailand is also active in enabling digitisation in the banking industry through initiatives in e-signatures, e-know your customer, and digital content. Suzuki expects that in the next five to 10 years, digital adoption should be the norm for all Thai people as 90% of the Thai population is expected to have internet access by 2026.

“Everyone will be using smartphones, whilst people in remote areas will benefit from easier access to financial services via mobile internet,” says Suzuki, even expecting biometric identification trends to replace mobile payments over the next decade. For business customers, the fast pace of digitisation and regional integration in Asia represents opportunities for the banking sector to evolve into new roles beyond that of the traditional financial service provider.

Suzuki says the banks that want to grow their customer bases in the region should focus on connecting and mobilising financial trade and investment flows. There will also be a need for banks to expand their role from providing existing financial services to business expansion advisory and networking services. 

In photo (from left to right): Thomas Low, Frederick Chin, Asriel Hay, Masaaki Suzuki