Why banks need to be more than just financial service providers
THE role of a bank is changing. It can no longer survive by being just a money repository or a loans financier.
Some banks are working with technology companies to improve their offerings in order to keep up with the requirements of their customers.
Especially for small medium enterprises (SME), banks play a key role in helping them finance their businesses. This is an opportunity for banks to provide more value for its business customers, through offering tech-based solutions.
In Malaysia, over 98.5 percent of registered businesses are SMEs. For a lot of them, navigating the market for the right tech solutions to grow their businesses can be daunting. There are many useful software and applications, but not all are suited to their business needs.
On a related note, central bank Bank Negara Malaysia reports that banks provide over 90 percent of financing to SMEs. This suggests that banks remain important to business growth.
This is why banks are most suited to help SMEs navigate the technology space. Most SMEs would already have a working relationship and an account with the bank. Meanwhile, banks would understand which tech solutions best integrate with their systems.
Already several banks are partnering with tech solution providers to offer comprehensive digital solutions, catering specifically to typical needs of SMEs.
One of them is Hong Leong Bank (HLB). The bank is working with four different digital platforms – Biztory, Kakitangan, SimpleTax, and Digital Advert – to provide a suite of solutions to help businesses to meet the demands of their customers.
The digital business solutions include an HR management platform, accounting software, tax advisory tools, and advertising.
“We believe in empowering them with the right functional tools under a one-stop Digital Business Solutions that will help them to be more agile and efficient, so that they are able to focus on pursuing avenues and opportunities for growth,” said Domenic Fuda, Group Managing Director and Chief Executive Officer of HLB.
HLB isn’t the only player in the market with this kind of offerings. Just a day before, RHB also announced similar capabilities on its SME e-Solutions, which comes with a suite of cloud-based solutions aimed at the retail industry.
Earlier this year, UOB Malaysia also rolled out its UOB SmartBusiness platform which features similar applications to HLB’s offerings. On a smaller scale, local bank CIMB also has similar support and solutions for SMEs, albeit being more financially focused.
During an interview with Tech Wire Asia, Fuda explained that the role of banks is changing. Increasingly they have to evaluate where their clients are and what they need.
“We are trying to be part of an ecosystem. If we can help and bring those solutions together beyond financing we’d like to. It’s no longer just a series of loans. If we can package things around the ecosystem and we’d be increasingly looking at doing that,” Fuda commented.
Banks are recognizing the need to transform. If the trends are any indication, most are moving away from being a pureplay financial service to provide value-added service to their clients.
- Will Facebook’s new payments system transform businesses?
- Bank of China pioneers open platforms and mutually beneficial ecosystems
- Understanding the real cost of migrating to the cloud
- How predictive analytics can help you enhance customer experience
- Is it time for cloud service providers to reinvent themselves?