By KAN KWOK LEONG

Within two daysof registeringhis publishingbusiness in Sin-gapore, new en-trepreneur Jas-on Tan re -ceived a phone

call from OCBC Bank. Aware that hehad just started a business, the bankofficer was keen to meet Mr Tan tosee how it could help him with hisfledgling enterprise – anything fromopening a corporate account to help-ing him create his name cards.

“I was quite surprised that a bankwould want to work with a companythat had literally just started,” hesaid.

This urgency to engage withMr Tan and others like him is part ofOCBC’s strategy to focus on the smallin small- and medium-sized enterpris-es (SMEs).

Singapore’s entrepreneurial scenehas flourished in recent years, as anew generation of business ownerschoose to bypass traditional careersto open cafes, create online apps andoffer design services. And it is in thissegment that local bank OCBC haschosen to carve a niche for itself.

“We tried to differentiate our-selves by looking at that part of theSME segment that was toughest toserve, the start-ups. Businesses thathave just been set up and are startingto get going,” said Linus Goh, OCBC’shead of global commercial banking.

This focus on smaller businessescame about almost by accident, asthere was no one dedicated team look-ing after this unique segment of cus-tomers.

“We were really trying to fix a situ-ation. The business owners of thesenewly formed companies were stuckin queues at our branches, workingtheir way through complex forms toopen bank accounts. We figured weneeded a team to understand the pre-dicament of start-up companies, tosee how we could refine our ap-proach,” he said.

Today, the bank has shortened theaccount-opening process fortime-starved SMEs. Armed with justhis identity card and $500, a newbusiness owner who visits an OCBCbranch will have his business accountactivated and cheque book ready in30 minutes.

This is just one of the many thingsthat the bank has done to take the has-

sle out of banking so that new entre-preneurs can focus their time ongrowing their businesses.

While catering to this segmentcomes with greater risk, Mr Goh seeshis customers not so much as smallbusinesses, but rather potentially

large enterprises that have just beguntheir growth journey.

This perspective may be a result ofhis earlier experience of handlinglarge corporates and internationalbusiness, initially at Citibank, wherethe 50-year-old spent 17 years, and

later at OCBC, where he has spent thelast nine years. In 2008, he was ap-pointed global head of enterprisebanking and financial institutions, be-fore assuming his current role inApril 2012.

“Before taking on this role, SMEswas the one business segment that Ihad not covered before. In a way, nothaving prior experience with SMEs al-lowed me to keep an open mind andlook at them more as large companiesin the making,” said Mr Goh.

“The challenge was in adaptingtransaction banking and internation-al solutions and applying them inbite-sizes to SMEs at the right stage ofgrowth,” he added.

The oil and gas sector is one of sev-eral industries where OCBC has suc-cessfully helped smaller firms grow in-to bigger players.

“Many of these companies startedout with quite modest beginnings andweren’t even focused on oil and gas.They happened to be the suppliers orlogistics providers to the big oil andgas players. At some point, they hadan idea to pursue the oil and gas sup-port services business, and started byacquiring a small vessel,” saidMr Goh.

He added: “We’ve been behindmany of these companies.”

The bank’s push into the SMEbanking business – defined as compa-nies with turnover below $10 million– started in earnest in 2006, and hasso far produced impressive results.According to Mr Goh, OCBC is proba-bly a leader in this segment, withmore than one in two small business-es in Singapore banking with them.

“We made a decision to focus onthose companies, but that’s just thebeginning. It is how we do it that ismost important. How do we supportthese SMEs and help them grow pastthe $10 million mark,” he said.

And the bank’s success is not limit-ed to local enterprises. It is activelysupporting Singapore companies ven-turing into Malaysia’s Iskandar eco-nomic region in Johor, with one in

three local SMEs operating in the re-gion banking with OCBC, Mr Goh re-vealed. He expects another RM0.5 bil-lion (S$208,000) growth in assets bythe end of this year, and a trebling ofgrowth in the next two years.

OCBC is also looking to make a bigsplash in Myanmar, which he de-scribed as the last frontier economyin Asia. Companies from around theworld are scrambling to do businessin the resource-rich country as itopens up economically.

“The bank has not only been sup-porting SME customers by fundingtheir internationalisation efforts butalso in helping them to explore thevast potential of newly emerging mar-kets to sustain long-term growth andglobal competitiveness.”

Expanding abroadIndeed, the bank is boosting its over-seas network as a growing number ofSMEs look to expand abroad at a veryearly stage of their growth in the facechallenges such as increasing busi-ness costs and manpower constraintsin recent years.

In the past two years, the bank hasa seen a fourfold increase in thenumber of its SME customers expand-ing their footprints in the region, espe-cially in China, Malaysia and Indone-sia. They now form about 18 per centof its total asset base for the SMEbanking business.

“Singapore SMEs traditionallystarted as a domestic entity before ex-panding to the region. Today, that is

much less the case; new start-ups are

just as likely to start on a regional ba-

sis,” he said.

As international growth becomes

a priority for many smaller business-

es, OCBC has built a regional capabili-

ty delivering local market know-how

and access, offering customers a sin-

gle point of contact across the region,

he added.

“The demand for SMEs to pursue

overseas growth is more intense, but

many don’t have the size of operation

or balance sheet to do that. So we act

as home bank for them in their over-

seas markets. We’ve invested quite a

lot building capabilities and a net-

work of branches, mostly in Asia.”

But the flip side of this growth is

the greater level of risk associated

with SMEs. Unlike multinational cor-

porations and large local companies

with established track records, bank-

ers have less to go on when assessing

the viability of smaller businesses.

This requires enterprise bankers

to look beyond business plans and vi-

sions, and towards the ability of the

owners to execute, Mr Goh explained.

“I look for a sense of realism in the

client. At the end of the day, it is this

measured sense of being able to exe-

cute a plan, demonstrating the capa-

bility to deliver. We are not talking

about taking short-term bets but the

long-term expansion and sustainabili-

ty of the business.”

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Mr Gupta: With technology being key to the growth andsuccess of the industry, there is certainly intense competi-tion for the best talent. In addition, time to market is accel-erating and a top priority is to get the right skills and tal-ent to deliver against that.

DBS has been putting in place policies and initiatives toattract and retain the best talent, not just in technology,but across various fields and functions. We are gratifiedthat today, we are perceived as an employer of choice, notjust in Singapore, but across the region as well.

Mr Ferguson: In Singapore, there is a shortage of certainskills for specialists in data analytics and mobile bankingtechnology, where there is increasing demand.

If banks do not get the skills on board to collaboratequickly with external partners, there is an increasing pos-sibility of disintermediation, with banking, payment,lending-type solutions being offered by institutions otherthan banks.

If digitisation is not pursued keenly by banks, opera-tional costs will not decrease sufficiently through econo-mies of scale. Development of straight-through processingsolutions is therefore critical.

Steven Miller: Yes indeed, this is the case. This is the resultof four trends which are exerting a strong influence on thelocal environment: First, the financial institutions in Singa-pore are benefiting from the overall growth in the region,and this of course drives expansion efforts.

Second, there are still many changes and new require-ments following from the recent global financial crisis of2007-2009, and of course all of these changes require ad-aptations to business processes, rules and enabling soft-ware applications.

Third, Singapore has been phasing in pronounced poli-cy changes regarding immigration, and this has imposedsome constraints on the size and depth of the available tal-ent pool from which the local financial institutions candraw.

And fourth, all of the financial services firms located inSingapore are responding to the overall trends driving theglobal world of business, including the rapid evolution ofmobility and location-based services and the increasing in-tegration of social networking into customer interactionsand business applications.

If the banks and related financial institutions located inSingapore cannot find local talent to do this work, theywill be forced to build the capability in other countries.

BT: What initiatives has your bank put in place to dealwith the talent shortfall?

Mr Gupta: To address the growing and evolving needs ofgrooming talent in technology, two years ago, DBS intro-duced the Technology & Operations Graduate ExecutiveProgramme in Singapore, a 24-month, intensive,high-profile induction across various technology and oper-ations functions within the bank.

Within the bank, we have also established two teamsthat are focused on innovation and driving change. Thesecross-functional teams ensure that we are able to tap the

diverse skills and experience of our staff – and in the pro-cess of working together, our people will be able to ex-pand their perspectives and skill-sets.

Externally, we have also been developing strong anddeep partnerships with vendor partners around the worldin the US, China, and India. Through these partnerships,we are able to tap resources and a wide pool of talentfrom among the best globally.

Mr Ferguson: We are passionate about working with uni-versities, polytechnics and institutions in Singapore thatspecialise in technology to bring in Singaporean talent atan entry level. This helps us build for the future.

Standard Chartered Bank has continued to demon-strate our commitment to talent development in this areathrough initiatives such as the Mobile Ventures Fellow-ship programme.

This is the second year that Standard Chartered is part-nering the Infocomm Development Authority of Singapore(IDA) to offer the programme. The programme aims totrain new infocomm graduates and professionals inemerging and critical technologies.

To date, 20 traineeships have been offered by the bankto young Singaporean technopreneurs. They will be em-bedded within specialist teams at the bank’s multi-awardwinning Global Internet and Mobile Banking unit in Singa-pore.

Mr Wee: In every market in which we operate, we look forIT professionals who have deep local knowledge andstrong IT capabilities. It is not just about skill-sets butmindsets and values.

Our expanding regional franchise opens up growth op-portunities for our people across countries. These enableus to attract and retain talent looking to build long-term,progressive careers including that in banking technology.

Mr Zink: We believe that technology professionals canhave a long-term career in the financial-services sectorthat is fulfilling, stimulating, challenging and ultimately,rewarding. The field of technology is extremely broad andwide, and it is evolving and growing by the minute.

Thus, offering technology professionals a long-termprofessional and personal development programme withcareer mobility options is important. Our career mobilityprogrammes include mobility across different operationaland technological functions, across local and overseasmarkets, as well as across business lines.

Under our ongoing outreach programme, we also workvery closely with universities and our software develop-ment strategic partners to identify, train and groom futuretechnologists through practicum in our innovation labsand hiring the graduates as our technology associates.

BT: What new skills or specialisations within the technolo-gy field do you see becoming more important for financialservices?

Mr Zink: Speed and simplicity will continue to be at theforefront of technological change in the financial servicesindustry. Technology professionals need to be adept notonly at streamlining processes and technological innova-tions to suit customers’ evolving needs, but also at bring-

ing these to market faster and more efficiently than com-petitors.

One key attribute to success will lie in the ability of tech-nology experts to become an integral part of businessstreams and in addition to technical expertise, also har-ness an innate understanding of the broader business ob-jectives, beyond the technological ones.

Mr Wee: Today, IT professionals need to have more thanjust technical skills. They must be able to appreciate andaddress increasingly complex business and customerneeds. In banking, additional competencies are requiredin light of regulatory reforms and the need for more ro-bust risk management systems – domestically and acrossborders.

These IT professionals need to be versatile and profi-cient in managing the different aspects of technology –from technical demands to vendor management, to pro-cess re-engineering – and ultimately be change leaders.

Mr Gupta: Beyond an understanding of transactions andplatforms, increasingly, we will be looking for people whocan connect the dots, derive insights from data, under-stand the customer’s perspective and come up with crea-tive ideas and innovative ways to engage our customersand enhance their experience and relationship with thebank.

Mr Ferguson: We expect individuals with skills in mobileapplication development, social media integration, big da-ta analytics and security – such as data leakage preven-tion and data privacy solutions – to be in demand in theindustry.

Prof Miller: Of course, each of the major segments of bank-ing – retail, wealth management, corporate, institutional,financial markets and private banking – are all rapidly de-veloping new products and services.

IT professionals working on software applications anddelivery systems associated with these respective lines ofbusiness will thus need to be familiar with the productand service requirements in order to create or modify theenabling software applications.

As more local SMEs venture abroad, OCBC is beefing up its regional network to help them grow, says the bank’s head of commercial bankingMr Goh: Sees hiscustomers not so muchas small businesses, butrather potentially largeenterprises that havejust begun theirgrowth journey.

SME banking in the spotlightSME or enterprise banking used to be a low-priority business for mostbanks. But as the quality of these smaller companies improved and mar-gins for top-tier corporations got squeezed, many financial institutionsbegan to make a concerted effort to cater to this segment.

“Today most banks have a strong focus on SMEs. They are now beingrecognised for their contribution to the broader economy. As SMEs havebecome bigger and stronger, their relationship with their banks have al-so become stronger,” said Linus Goh, OCBC’s head of commercial bank-ing.

But as the business expands, the biggest challenge many banks faceis recruiting enough talent to work in the people-intensive segment thatrequires the cultivating of long-term relationships.

“Many new entrants to banking focus on the short term – how do Iget my experience quickly and move on,” said Mr Goh. And while invest-ment banking serving large corporates will continue to be a sexier op-tion, Mr Goh is seeing a growing proportion of new hires choosing theSME segment.

“We sell SME banking as a place that creates options for you. The re-lationships you make here with clients will help you move to other are-as. There are opportunities to move to private banking and investmentbanking.”

Banking’s technology challenge

Serving tomorrow’s corporate giants

Touching base:Customer touchpointssuch as ATMs are nowbecoming a customersensor point for banks,delivering real-timeinformation that thebanks can use to form abetter pictureof their customers’needs.PHOTO: REUTERS

30 FICS AWARDS 2013 The Business Times, Wednesday, May 29, 2013