How UOB is pushing the digitalization envelope for its SME customers

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We believe that growth must be sustainable and responsibly achieved. It is how UOB upholds our long-term commitment to our stakeholders. It is in keeping with our values. – Wong Kan Seng, Chairman

Company profile 

Background 

  1. A legacy bank with existence for 85 years
  2. The bank drives economic growth with sector-specific solutions to help synergize business across value chains
  3. It has an integrated framework to achieve scalability as well as agility for rolling out solutions with a robust risk management system
  4. The bank serves customers with product innovation, sector specialization, omnichannel experience, and forging ecosystem partnerships
  5. Furthermore, by delivering digital solutions and empowering owners it aims to deepen the small-medium enterprise (SME) business
  6. Additionally, in 2019, UOB advanced SME loans amounting to S$ 61 billion, an increase of 9% year-on-year.

Challenge 

The challenges faced by SME’s are: 

  1. Investment for digitalization
  2. Shifting consumer trends as a result of a slowdown in global demand
  3. Acceptance of increased digitalization from customers
  4. Mitigating costs without passing it on to the customers: Digitalization of banking procedures requires extensive capital. These costs can eventually trickle down to the customers of SMEs and are concerning for business owners
  5. Sustainability of business operations in order to increase the longevity of the business without going in a loss

Solution

The bank is leveraging digital technology, regional footprint and expertise in order to enhance its SME business:

  1. Offering customised digital solutions to support the financing needs of small businesses
  2. Providing a short-term credit facility to overcome the barriers of productivity and growth
  3. Launching several digital initiatives to improve client experience
  4. Implementing a data-driven strategy to cater to the financing needs of SMEs
  5. Using its extensive ASEAN network to establish a cross-industry and border collaboration

Business Model 

  1. UOB is investing heavily in helping SMEs which will subsequently help them adopt effective digital solutions
    • A dedicated team of 40 technology specialists across the region. Specialists help SME clients understand how their businesses can be digitalized so as to increase efficiency and compete more effectively in the digital economy.
    • BusinessConnect: A community for SMEs to get resources as well as support for achieving business goals, growing networks, and learning from industry experts.
  2. UOB is part of the SME customer journey in the following ways:  
    1. The Business Circle
      • Enabling the younger generation, and learning from successful entrepreneurs 
      • Building cross-industry and cross-border connections  
      • Accelerating their own companies’ growth 
    2. The FinLab  
      • SMEs, in addition to being guided on the implementation of digital solutions, are also encouraged to seek the expertise of ecosystem partners including leading private companies and technology solution providers
    3. UOB BizSmart  
      • SME owners are offered an integrated suite of solutions from payroll management to e-commerce for improving productivity 
    4. SME Leadership academy  
      • To help SME owners gain insights through in-person training by experts from UOB and Google 
    5. Operational solutions  
      • To help SME owners manage payments and collections, payroll services, accounting, marketing, cybersecurity, digital transactions in addition to industry-specific operational support 
    6. UOB-Asian Banking School Small- and Medium-Sized Enterprise Banking Executive Certificate Programme in Malaysia 
      • To cultivate an entrepreneurial mindset among our business bankers and to equip them with digital marketing and credit analytical skills 

People strategy 

We designed the Better U program to nurture a mindset that is curious and open to new avenues of personal and professional growth. – Mr Dean Tong, Head of Group Human Resources, UOB

  1. UOB launched Better U 
    • A learning and development program to equip the workforce with knowledge and skills in complex problem-solving, digital awareness, human-centred design, and data storytelling 
  2. Professional Conversion Programme in Singapore  
    • Deepen the digital skills of branch colleagues 
  3. AI in Finance online course in Singapore  
    • Fundamentals of artificial intelligence (AI) and its relevance in the finance industry 
  4. AI Experiential Programme in Singapore  
    • In Python, data visualization, and the application of AI using real data for case studies 
  5. UOB-Mahidol Banker’s Executive Certification Programme in Thailand  
    • Broaden business bankers’ knowledge in digital banking, blockchain technology, and risk management 
  6. First service inclusiveness training program for the financial sector in Singapore  
    • Help colleagues grasp the everyday challenges faced by differently-abled people and help them learn the practical approaches in attending customers in this segment 
  7. Service Competency Toolkit in Singapore  
    • Empower branch colleagues to promote service leadership through role-playing and self-awareness quizzes 

Partnership strategy 

  1. For the purpose of accelerating e-commerce transformation and bringing the collective expertise for banking and business solutions, UOB partners with 9 e-commerce platforms.
  2. These platforms will subsequently help UOB’s SME clients to scale up their business faster and to connect with close to 300 million digital consumers in the region.
  3. Additionally, UOB has multiple partnerships with various educational institutions to run learning and development programs for their workforce and business customers.

Technology Strategy 

UOB invests $2 billion in IT and will continue to do so while incorporating design thinking in their product solutions. 

  1. The 3 flagship applications for their SME customers, namely:  
    1. A cloud-based solution, UOB BizSmart to run and manage the business
    2. A banking application, UOB Business for all banking needs
    3. UOB mCollect:  
      • A QR-based collections solution to digitalize the cash-on-delivery model 
      • Collect payments from buyers digitally at the point of delivery 
      • Enhance efficiency so as to reduce cash handling risks and automate the reconciliation processes 
  2. Ocktorocket: A 15-minute loan approval AI platform that uses insights of cashflow and day-to-day operations 
  3. Robo Advisory: The first digital advisory platform for corporate investors providing customised digital investment portfolios 

Results 

The 4 key UOB victories in pushing its SME customers towards digitalization: 

  1. Annual revenue growth of over 80% for UOB’s SME business 
  2. UOB BizMoney 
    • Provide $547 million in unsecured working capital loans to 2,800 SMEs in Malaysia, Singapore, and Thailand.   
    • Provide $547 million in unsecured working capital loans to 2,800 SMEs in Malaysia, Singapore, and Thailand.   
  3. The UOB Regal Metal Business Card  
    • Help SME customers in Singapore access card privileges, rewards and cut costs in business travel and entertainment. 
  4. UOB BizSmart  
    • A one-stop solution for increasing efficiency and optimizing cost for SME customers
    • Provides businesses in Singapore access to the nationwide e-invoicing network for the creation of PEPPOL-standard e-invoices. 

Topic:

SME Banking

A big business starts small.

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