How Banks Can Add More Value for Small Business Customers

This article originally appeared on The Jakarta Post.

It's not easy for small companies to grind through the basic operations of running a business. Owners and employees spend a lot of time navigating separate platforms for banking, enterprise resource planning, human resources and payments.


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Banks can help contain the sprawl by devising a simple, easy-to-use package that would integrate these functions. Such packages could hold great appeal for small and medium enterprises (SMEs), allowing banks to strengthen and expand their role with these companies.

Small firms also look for advice and support at transitional moments such as making acquisitions or starting to export. By offering services that address SMEs' broader needs, banks can position themselves at the center of a valuable ecosystem.

Some banks have made a promising start. For example, seven banks in Indonesia have collaborated with Telkomsel to expand payment options for SMEs using Telkomsel's advertising solution. Tokopedia, the online marketplace, is partnering with several banks for merchant financing.

In New Zealand, ANZ targets startups, using monthly subscription fees for its revenue model. It partners with Honcho for setting up businesses, and with other companies such as Xero for accounting. And DBS is working with Singtel, the largest telecommunications provider in Singapore, to help SMEs go cashless and build e-commerce businesses.

These banks hope to tap new profit pools that they currently do not serve. And there are positive knock-on effects, such as gaining access to the SME customer interface and data, which banks can use to refine their offerings and make operations more efficient.

Although ecosystems are still in their early days, we have seen initial forays sort into three approaches.

Read the full article at The Jakarta Post.

Martin Tornes, Seow-Chien Chew and Edy Widjaja are partners with Bain & Company's Financial Services practice. They are based, respectively, in Copenhagen, Singapore and Jakarta.