Recognized for its financial strength and stability, OCBC is consistently ranked among the Global Top 50 of the World’s Safest Banks by Global Finance and has been named Best Managed Bank in Singapore by The Asian Banker.
At the core of its business is a focus on supporting the international operations of Asian small and medium-sized enterprises. Mirroring its customers’ requirements, OCBC’s key markets are Singapore, Malaysia, Indonesia and Greater China. It has more than 570 branches and representative offices in 19 countries and regions, including 300 branches and offices in Indonesia and 90 branches and offices in Hong Kong, China and Macau.
Almost half of OCBC’s Asian SME customers are doing business overseas, so the bank is continuously improving and increasing its focus on how to support them in this internationalization. Over the last three years, the bank has disbursed close to S$1 billion ($0.72 billion) in government-assisted loans to SMEs in Singapore, Malaysia and Hong Kong. This is in part due to the acquisition of Wing Hang Bank in Hong Kong, where it has doubled its customer base.
The strategies employed by the bank at its global headquarters are replicated across regional markets, with Singapore being the financial centre for many SMEs, and OCBC’s services and connectivity throughout the region supporting their customers’ increasing internationalization.
The Singapore domestic market is a limited one, so businesses must look outwards for sustainable growth. OCBC can support this effort with its dedicated teams and strategies adapted to the cultural and business nuances of individual countries.
An example of this can be seen in Malaysia, where OCBC has established a cash sales force in all major cities and developed a partnership framework, which has led to substantial growth in the bank’s average balances. Reflecting Malaysia’s move towards a cashless society, an increasing number of businesses are using merchant terminals for credit and debit card payments. Business account customers can now get a Merchant Account, making transactions more convenient and streamlined.
In Myanmar, a proprietary model is used to improve turnaround time by straight-through processing, thus reducing the time taken from weeks to days. Again, this has led to an increase in deposits.
Many of the SMEs operating in Indonesia have relationships with local banks. In order to encourage them to join OCBC, the bank has launched the Business Signature account, offering a higher interest rate as well as a dedicated relationship manager.
Cultural differences are a key challenge. They go beyond language barriers and time differences. The way people work is fundamentally different. 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.
“Every country has its nuances when it comes to corporate hierarchy and the way business is done. That’s why hiring local is important. Seeing everything through a ‘Singapore lens’ is not ideal,” says Tan Chor Sen, executive vice president, global commercial banking, OCBC Bank. “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.”
OCBC is also supporting incoming SMEs and actively encouraging SMEs to use Singapore as a financial centre. It has established dedicated market coverage regional teams to manage north Asian flows – consisting mainly of Greater China corporates – as well as southeast Asian flows. 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, enhancing the customer experience for both locally and internationally based SMEs.
“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,” says Tan Chor Sen. “Customers have been able to tap into the regional teams’ expertise to have their financing and transactional needs taken care of.”