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Key trends and challenges facing SMEs: What lessons can the FinTech industry offer?
In conversation with Mr Chua Chek Ping, Executive Director, Strategic Alliances and FinTech, Group Channels and Digitalisation at UOB.
Q. What can SMEs learn from FinTech companies and vice versa?
Chek Ping:
From an SME perspective, I feel there are two areas in particular.
The first is the need for all businesses, always, to look through a customer-centric lens when solving customer problems and locating pain points.
The second is the imperative to look at technology in a different light. Technology is no longer clunky infrastructure that requires high capital investments and hours of painful integration. Technology has become readily available with minimal upfront cost, with many solutions now available in a “plug and play” form that SMEs must take advantage of.
At UOB, we are focused on working with partners to develop simple-to-use and affordable digital tools such as BizSmart.
Q. There are many solutions available that SMEs can adopt quickly such as payment gateways, hosted storefronts and cybersecurity protections, to name a few. The critical piece of the puzzle is that they must be pre-packaged as composite solutions rather than individual capabilities. Do you agree?
Chek Ping:
I agree absolutely! Everybody — including SMEs — prefers a solution that is simple to use, comprehensive, modularised and affordable. We often liken this to the set meals that fast food restaurants offer: simple and easy to pick from, but you can also customise by adding more lettuce for instance, with one click. Modern technological architecture that replaces legacy architecture can provide “set meals” affordably to a wider user base. This is a principle which we adopt when designing our solutions for customers as well, such as the number of clicks required for a customer to make an electronic payment. For example, 1-click shopping facilitated by secure recognition systems enables the customer to buy online even faster than in a market. FinTech trends are definitely heading in that general direction.
Q. How do you think AI can help SMEs secure lending faster and more easily? And have you seen instances where AI has been used to supplement traditional sources of data?
Chek Ping:
One significant use of AI in SME lending is in processing and evaluating, fast and in real-time, a broader spectrum of transactional and alternative data (if available) to supplement existing data. This will result in better credit assessment, which will raise the rate of approvals and lower lending costs. Currently, it is just too costly to assess an SME’s credit standing if a credit analyst has to consider too many data points.
I'm a strong believer in conducting SME lending at the transactional or invoice level using real-time data. Digital-economy SMEs may not have ample assets to pledge as collateral for bank credit lines. Lenders can consider working with digital platforms such as ecommerce players that can provide transactional data to be used as alternative data to improve creditworthiness assessment of a borrower.
Q. Do you agree that increasingly the differences between the B2C and B2B buying experiences are converging? What are some of the learning that Singapore SMEs can glean from other markets to push and pull consumers online?
Chek Ping:
I do agree that B2C and B2B buying experiences are converging, especially in the small business segment, where the business is often managed by owners, who want their online tools to work in the same way as the ones they use as individuals. Even in big organisations, employees want a digital tool that is as intuitive and easy to use as their apps. It is easier to solve this for small businesses, as their needs tend to be simpler, whereas enterprise-grade tools for larger companies take longer because of the complexity of their needs and the need for more robust security and firewalls.
Q. What are the trends and benefits you see in multi-channel fulfilment for small businesses?
Chek Ping:
COVID has further strengthened our belief that choosing an omni-channel strategy is the right decision. Fortunately, we started on this early, and when COVID-19 struck we were able to serve our customers by moving as many of them and their transactions as possible online while keeping some physical branches operating to support customers who are unable to use online services or who have more complex needs so that we left no-one behind.
We selected to partner with Getz to support the F&B sector to offer online food ordering because we believe that whilst the circuit breaker has resulted in a total shift from in-dining to online order and takeaways, in-dining will nevertheless return progressively as consumers yearn for the dine-in experience with the ambience, ability to eat out together with family and friends. Getz was chosen as it’s digital solution provider that supports both online and dine-in options.
UOB provides the ideal solution for moving business online: Shopmatic, an e-commerce platform that offers easy-to-use web templates and a user-friendly interface so that firms can speedily showcase their products and services in their unique online store without having to learn coding or programming.
To survive and thrive, companies must have online presence that stand out and guarantee customers a seamless ordering and fulfilment experience. But online operations must go further, engaging with customers and building trust and confidence to secure customer loyalty to ensure retention and increase average order size.
Q. A key theme in this year’s Singapore FinTech Festival is People and Talent. What steps can SMEs take to address the talent challenge?
Chek Ping:
Attracting talent is a challenge for every company, big or small, everywhere, and SMEs will continue to be confronted by it. Talented people, especially the young, have a strong desire to seek meaning in their work, have their opinions and ideas heard, and may require flexible work arrangements. Employers, including SMEs, who can change and adapt their work culture to address these needs, will stand out above the rest in attracting talents. We need to create a new process for hiring the right people and adopt an original approach in seeking out relevant skill sets and knowledge, including entrepreneurial spirit, the ability to think outside the box, wider understanding of the economic context, and, more than ever, the ability to work remotely in an effective way. I have seen so many talented people foregoing the opportunity to join large, established organisations to join start-ups because they believe in the cause and that they can make a difference.
