H1 2019 Singapore SME Banking Council Market Report

H1 2019 Singapore SME Banking CouncilMarket Report

Presented by: RFi GroupAnalyst: A Bahvaani, Research Analyst - Asia

For questions and enquiries, please contact:Andrew Kim, Client Services Director – Asia, [email protected]

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Financial Councils – Global

Priority & Retail Banking Council

Payments & Innovation Council

Merchant Acquiring Council

Digital Banking Council

Commercial BankingCouncil

SME Banking Council

Youth Banking Open Banking/ PSD2 Council

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B2B Payments Remittance




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Financial Councils – Global

Priority & Retail Banking Council

Payments & Innovation Council

Merchant Acquiring Council

Digital Banking Council

Commercial BankingCouncil

SME Banking Council

Youth Banking Open Banking/ PSD2 Council

Commercial Payments

B2B Payments Remittance


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Agenda

• Research methodology

• Firmographics

• General banking landscape

• Business Banking

• Products Holdings

• Business Operating Accounts

• Trade-related Products and Services

• Borrowing Products

• Business Credit/Charge Cards

• Banking Channels

• Future Banking Intentions

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• The data in this report is taken from the H1 2019 SME Banking Council survey.

• The survey was in field during the month of May to June 2019 and was completed in English.

• A total of 364 Singapore SME companies were interviewed online, split into revenue segments (in USD) as follows:

• Below USD 3million: n= 293

• USD 3million – 5 million: n= 48

• USD 5 million – 10 million: n= 43

• On slides presenting bank-level information, boost samples were used to increase the sample size. For the results

labelled as Total, boost(s) was removed so the overall results become representative of SMEs in general.

• Due to changes to the survey’s coverage ahead of H1 2017, trending in some cases might not be possible.

• For single response questions, totals may not add up to 100% due to rounding, while for multi-response questions,

totals do not add up to 100% as respondents could choose more than one response.

• Slides marked with an institution’s logo in the title indicate slides that are proprietary to that institution.

• Further data cuts are available to clients on request.

Methodology

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• The H1 2019 Singapore SME Banking Council survey is only asked to respondents who have direct knowledge of their

companies’ financials and are of the following positions.

• Owner/ Operator

• Director

• Chief Executive Officer (CEO)

• Chief Financial Officer (CFO)

• Partner

• Logic checks in the online questionnaire ensure that responses are coherent. Respondents are otherwise terminated

from the survey.

• Fieldwork for the survey is divided into two phases, the soft launch and the full launch. Data check is performed twice,

one after soft launch and the other after full launch.

• Additional checks are performed to remove straight-liners (those that provide the same response for multiple

questions in a row) and duplicates (repeated responses across completed surveys).

Quality Assurance

• Finance Manager

• Managing Partner

• Not for profit Office Bearer

• Managing Director/ General Manager

• Financial Director

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▪ NPS is a measure of recommendation amongst Existing Clients

▪ It correlates well with Intent to buy more amongst Existing Clients

▪ However, smaller brands even with high NPS can have a smaller absolute number of promoters, compared to a larger brand with lower NPS

▪ The introduction of a new product or an exciting scheme in the market by one brand has the potential of disrupting the market. The incumbents NPS may remain high but their sales may not speak the same language in the face of the new product.

▪ Some brands can over-service existing customers thus getting high NPS, at a cost, and focus less on acquisition. NPS surveys can tell us potential acquisition triggers.

▪ There is cultural bias in scoring so we must look at scores trended within each market and Vs competition in each market (not across markets). Markets like India, Indonesia and UAE generally give higher scores, whereas Hong Kong, Korea, Singapore and Taiwan give lower scores.

Net Promoter Score

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Market Report• Firmographics

• General banking landscape

• Business Banking

• Products Holdings

• Business Operating Accounts

• Trade-related Products and Services

• Borrowing Products

• Business Credit/Charge Cards

• Banking Channels

• Future Banking Intentions

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Preview Slides

• Most Important Business banking

• Domestic Banking: Switching Drivers

• Business Operating Account: Satisfaction Drivers

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Most Important Business Banking

Base: SME businesses (H2 2017: n=359; H1 2018: n=364; H2 2018: n=364; H1 2019: n=364)

30%

16%

11%13%

5% 6%5%

2%1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

DBS OCBC UOB Citibank* Maybank HSBC SCB Bank of China CIMB

Most Important Business Banking Relationship

Trended

H2 2017 H1 2018 H2 2018 H1 2019

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Domestic Banking: Switching Drivers

Base: Main domestic business bank customers who intend to switch (H1 2019: Citibank: n=22, DBS: n=73, OCBC: n=20, UOB: n=6, Total: n=196) Note: Tests for significance were carried out on this question ↑█ - Significantly higher than other segments ↓█ - Significantly lower than other segments. *█ - Sample size is small (<30); use indicatively.

Why are you considering switching from your main domestic business banking relationship?By Main domestic business bank

Citibank* DBS OCBC* UOB* Total

A larger credit facility 23% 26% 30% 0% 22%Better online banking 18% 19% 15% 17% 21%Faster borrowing process 14% 22% 20% 17% 19%Better integration between the business' banking and its accounting/ finance software 18% 23% 5% 0% 19%

Better operational processing quality, efficiency and reliability 9% 12% 30% 17% 19%Better telephone banking 14% 12% 30% 33% 19%Better branch access 23% 19% 25% 17% 18%Other bank provides innovative, market leading solutions 9% 18% 15% 0% 18%Other bank provides a hassle-free switching process 32% 16% 10% 33% 17%More commitment to the business' long term growth 23% 16% 20% 33% 17%The business applied for a loan product and was not approved the amount needed 14% 19% 5% 33% 17%Access to a dedicated Relationship Manager 23% 12% 15% 0% 16%More knowledgeable business advisors 5% 15% 20% 17% 16%A greater international presence 9% 15% 10% 17% 16%Better pricing and fees 0% 14% 20% 50% 16%Improved product/ service offering 18% 16% 10% 17% 16%Better mobile banking 14% 14% 10% 0% 16%Other bank offered an incentive to move there 14% 12% 20% 17% 15%Flexibility to suit the business' banking needs 27% 14% 15% 33% 15%Better access to finance/ lending 5% 14% 25% 17% 14%The business was declined a credit product 9% 8% 0% 17% 13%The business already has a financial product with another institution and now looks to move all other holdings there

18% 14% 10% 0% 12%

Other bank is the business' major business loan provider 5% 11% 10% 0% 11%The business needs a more proactive partner that provides offers, promotions or access to suitable government schemes when available

18% 5% 10% 0% 11%

It's the major bank of the parent company/ headquarters 14% 15% 0% 0% 10%

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Business Operating Account: Satisfaction Drivers

Base: SME businesses which hold business operating account(s) (H1 2019: n=364)Note: Respondents who selected “This is not applicable to the business operating account” and “Don’t know what this feature is” were excluded from the analysis

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Correlation with overall satisfaction

Satisfaction with BOA services attributes and drivers of overall satisfactionBOA Holders

KEY

1 Fees and charges

2 Branch locations

3 Customer service

4 Size of credit facility

5 Online/ mobile banking capabilities

6 Access to foreign currencies

7 Speed of handling transactions

8 Service cut-off time for payment services

9 Integration with the business' technology plat

10 Knowledge of staff about regulations and busin

11 Its products and services meet the business' d

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Intelligence to bank onIntelligence to bank on

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H1 2019 Singapore SME Banking Council Market Report

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