AS THE world recovers from the pandemic, growth is back on the agenda. For many companies, especially small and medium-sized enterprises (SMEs), one of the things that is most crucial to ensuring success is continuous digitalisation.
It is the SMEs that have been able to digitally transform – and which are able to leverage on their own data – that are doing particularly well as the economy resets for growth. Based on our data, one in two “highly digital” companies would have seen growth of 5 per cent or more since Covid-19, while less digital enterprises would have seen a decline in performance of about the same percentage.
Going deeper into ‘digital’
As a bank, we have witnessed many companies transform their business, buoyed by digitalisation efforts they adopted in response to the pandemic. Then, many overhauled their point-of-sale, accounting, payroll and e-commerce systems. These efforts reduced the time spent on manual tasks and captured data useful in business performance analysis and forecasting.
Today, “being digital” means going that step further. Many are investing in new technologies, especially in tools for financing for payments and digital marketing as well as to improve their processes.
Some are even implementing the use of artificial intelligence (AI). One such customer is Minmed Group, a healthcare group focusing on health screening, health promotion and education, primary healthcare and diagnostic imaging. Minmed is one of this year’s E50 winners and has effectively implemented several digital solutions. For example, the group used AI to ensure consistency in its care towards patients. It makes use of data analytics to recognise and anticipate client needs and introduced health reports for its telemedicine users.
That said, being digital in and of itself – merely the adoption of technologies and solutions – is insufficient. Digitally transforming a business for sustained growth has much to do with how adept SMEs can be when it comes to handling the new currency of digitalisation – data.
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As a financier whose goal is to help SMEs obtain better business outcomes and to answer the call to “ready, reset, grow”, we are intent on helping SMEs access ever-better digital tools and solutions that will help them transform their operations and gain business insights or data easily, 24/7.
Already, capabilities on our platforms allow SMEs to easily access a 360-view of their sales, expenses and cash flow trends, enabling them to identify patterns and gain insights for better business planning. As they scale, SMEs are also able to use OCBC’s digital business banking platform, Velocity, where the Single-Sign-On feature allows them to access their subsidiaries’ accounts and data, both in Singapore and abroad, with a single set of login credentials. This allows clients to toggle between countries, approve transactions and maintain full oversight of their account balances and transactions, all with a unified portfolio summary.
While we constantly work to build more capabilities on our platforms, we are also working on partnerships with industry platforms used by SMEs. In January this year, we partnered with PracBiz – a leading business-to-business (B2B) supply chain solution partner to retail industries in both Singapore and Malaysia.
We did so as many SMEs find it challenging to secure working capital due to the lack of business track records. Our intent is to allow SMEs to gain easier access to funding, without the need to submit financial statements.
By leveraging on transactional data of suppliers on PracBiz’s platform, the bank is able to quickly assess their credit quality without having to rely on traditional data such as historical financial statements, which may not portray a business’ true potential. Besides having a simple and fast credit line approval, suppliers are also able to tap on the funding once they submit the invoices to their buyers. They hence do not need to wait till the maturity of their credit terms to get their money, and save the administrative hassle of submitting paper documents to the bank.
The partnership has already yielded results for many SMEs as they are now able to access financing quicker and can react more swiftly to capture growth. Food supplier Best Taste Impex is one such company. Ko Yu Quan, director of Best Taste, explained: “I only needed to allow the bank to obtain invoice data through PracBiz and the line was approved quickly.”
He added that such capabilities mean that “financing is now hassle-free, and we can easily get funds for seasonal needs or business growth, giving business owners like me peace of mind and confidence as we focus on expansion”.
The future continues to be digital
About 75 per cent of OCBC’s SME customer base is now highly digital, double of what it was about five years before – a result of disruptions during Covid-19. Those who were early adopters of digitalisation now find themselves well equipped to deal with future changes and shocks.
As SMEs grow, it is also worth noting that being deeply digital means that businesses can adopt more sustainable practices – a necessary move as customers demand more transparency from brands they support. Being sustainable will also help businesses stay competitive for a longer period of time and save costs, since technology and data can give SMEs a view of – and therefore understand – their emissions footprint and what greener measures to adopt. This could be their source of electricity, as to how they run their logistics operations.
It is for all these reasons that digitalisation will continue to be a critical driver for SMEs. It defines the future world order for businesses. So, the time is now to make it a priority.
The writer is head of middle market and services for global commercial banking at OCBC.
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