4 June 2020

Banking on a digital future

COVID-19 has signified an inflection point in ‘digital transformation’; no longer a buzzword or nice-to-have, going digital is a necessity for business continuity.

With traditional channels disrupted, businesses have been forced to change the way they operate - keeping employees safe by enabling remote working and seeking out new routes to engage with customers, suppliers, banks and other stakeholders. This is being felt particularly by SMEs.

For businesses that have deprioritised digitalising, this is a wake-up call.

The imperative for digital transformation

Since the launch of Singapore’s Smart Nation initiative in 20141, there has been a persistent push for companies to digitally transform. While these efforts have resulted in greater awareness, Ho Meng Kit, Singapore Business Federation Chairman, recently said this has not translated into action among smaller businesses, with larger businesses reported a higher rate of implementing new technologies (40%) compared to SMEs (31%)2.

COVID-19 is showing that businesses of all sizes must take digital off the back-burner.

Turning digital into reality

The digital universe is huge, and in times of the ‘unusual’, businesses have to quickly get to grips with it if they want to transform this necessity into reality to keep their business going.

While digital could be as simple as reviewing your customer-facing online channels, there’s a grave mistake in thinking that it only applies to what your stakeholders see.

Treasury and procurement functions across sectors are quickly needing to adapt to use digital to ensure business continuity. Over 90% of our corporate clients in Singapore are now using digital channels to conduct payments online, manage accounts, liquidity and forecasting, utilise trade finance and services, obtain corporate cards, make FX transactions, and track transactions and documents in real-time.

Traditional paper-based document submission has quickly become a no-go; businesses are needing to integrate new programmes. We recently supported a large Singapore-based construction company to replace decades old manual payments instructions with an electronic platform, significantly expediting the banking solutions the client could access during the Circuit Breaker period.

Payments and collections can be digitised to protect employees as the Government continues to bring the virus under control. The use of PayNow Corporate, for instance, allows payments to be made digitally via a QR code without the need to obtain bank details from beneficiaries. Such initiatives are practical and meaningful solutions to help keep SMEs transacting with their customers. Transfers will be instantly credited into their bank accounts without having to physically handle and deposit cash - supporting the Government’s fight against the virus, whilst allowing business to continue operating safely and securely. Indeed, we have seen a 35% increase in PayNow Corporate Alias registrations in the first 2 weeks of April.

Digital also supports the ability to trade, enabling businesses to digitally send instructions on letters of credit and guarantees, apply for trade loans and upload invoices for receivables financing. With many customers in BCP mode we are seeing increased use of the ability to download digital copies of documents from business’ overseas suppliers’ banks, so as to skip a visit to the bank.

Take advantage of help available

Determining the solutions is one thing, implementing them – and smoothly so that operations continue – is another.

Singapore’s SMEs have access to a comprehensive range of resources offered both by industry associations and government agencies.

The Infocomm Media and Development Authority’s (IMDA) SME Go Digital Programme offers self-assessment tools and a Start Digital pack. The IMDA is also working with SGTech and over 70 industry partners to provide resources for businesses to manage the COVID-19 situation3. Specifically the retail sector can tap on Enterprise Singapore’s recently announced booster package4 that will cover 90 per cent of the costs involved in setting up operations on existing e-commerce platforms, as well as manpower support.

For SMEs, payments and payroll are often a highly manual process – measures like Go Digital could help the transition to a more efficient and cost-effective process. Banks are also providing greater resources to help their customers transition to digital. With additional resources deployed to support our customers to move online, we have observed a 40% increase in average daily call volumes in Singapore from our corporate customers since the outbreak of COVID-19.

Digital is here for the long haul

The time to act is now. Digitalisation optimises operations, increases a company’s ability to scale and improves agility when opportunities arise.

Amidst the uncertainty of COVID019, what we do know is that we are in for lasting change, particularly in the way that businesses operate doing forward. Digital will not diminish and may eventually separate the winners from the losers.

A contribution piece by Li Lian Ng, Head of Business Banking, CMB, HSBC Singapore. A version of this piece was first published in Today’s Manager on 4th June 2020.

1 https://www.smartnation.gov.sg/whats-new/speeches/smart-nation-launch

2 https://www.channelnewsasia.com/news/commentary/digital-transformation-automation-singapore-businesses-talent-12170360

3 www.imda.gov.sg/BizGoDigital

4 https://www.businesstimes.com.sg/sme/enterprise-singapore-launches-e-commerce-help-package-for-retail-smes