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Banks adapt their strategies as Asia’s SMEs go international

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Localization is key for OCBC Bank as it supports Asian clients who want to venture further afield.


Asia’s small and medium-sized enterprises (SMEs) are not content to just play in their home markets. Internationalization has been a key theme for quite a while now but over the past few years, it has only grown in importance.

In an EY study of ASEAN SMEs published in 2018, 87% of respondents already had regional operations outside their home market, with many planning to continue their international explorations in the medium term. When it came to revenue contributions, overseas operations accounted for up to 30% of revenues for 60% of the respondents, while the remaining 40% of respondents attributed more than 30% of revenues to this source.

This trend of internationalisation has also been evident among OCBC Bank’s SME customers. “They are choosing countries where there is critical mass – like Indonesia and China – but also up-and-coming markets like Thailand and Vietnam where the supply chain is already located,” says Tan Chor Sen, head of international at OCBC Bank’s global commercial banking division.

As these companies venture out, banks like OCBC must keep pace and support their regional aspirations, he says: “Seeing everything through a ‘Singapore lens’ is not ideal for SMEs, or for the bank.”

This attitude has helped the bank grow its regional business. Over the past three years, it has disbursed close to S$1 billion ($0.72 billion) in government-assisted loans to SMEs in Singapore, Malaysia and Hong Kong alone.

Bridging cultural differences

Cultural differences remain a key challenge to any business operating across regions. This goes beyond language barriers and time differences and stretches into the fundamental way people work. For instance, in countries with less transparency in their regulatory and business environments, more time and effort must be put into relationship building before businesses can start to work together. “In many respects, appreciating these differences and responding to them effectively will make or break the strategy for OCBC and its clients,” says Chor Sen. 

It is no coincidence then that the bank has a strong on-the-ground presence outside its home market of Singapore. It also counts Indonesia, China and Malaysia as core markets, and its presence stretches across 19 countries and regions. 

The bank has established dedicated market coverage regional teams to manage north Asian flows – consisting mainly of Greater China corporates – as well as southeast Asia. Last year saw the establishment of a dedicated team supporting foreign beneficial owners expanding into Singapore. The team is able to tap into resources from core markets to capture regional corridor flows and enhance the customer experience.

“Every country has its nuances when it comes to corporate hierarchy and the way business is done. That’s why hiring local is important. To better harness our network strength, it is also important that our teams from different markets are in regular contact with each other, to know each other’s markets. It’s the same thing that we advise our own customers to do – you have to go down to the market that you are interested in to get a real feel for it,” explains Chor Sen.

“For the outbound businesses, we have embarked on an intensive drive to ensure that customers operating regionally or planning to expand overseas are provided with the right advice when they scale up their business, or when they set up their first account. Customers have been able to tap into the regional teams’ expertise to have their financing and transactional needs taken care of.”

OCBC at a glance

OCBC is the oldest established Singapore bank and the second-largest financial services group in southeast Asia. Formed in 1932 from the merger of three banks, it holds a Moody’s Aa1 rating, making it one of the world’s most highly ranked banks.

Its financial strength and stability has been widely recognized, and the bank is consistently ranked among the Global Top 50 of the World’s Safest Banks by Global Finance.

It has also been named Best Managed Bank in Singapore by The Asian Banker and collected the 2019 award for Best Bank for SMEs at the Euromoney Awards for Excellence.

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