You Biz-y? Issue 5: What should Asia-Pacific SMEs look for in their financial providers?

Small & Medium Enterprises (SMEs) are often referred to as the backbone of Singapore’s economy - employing 72% of workers and accounting for 99% of all enterprises in the country .

And yet, this segment is typically overlooked or underserved when it comes to banking or financial services that meet their specific needs. A recent Mastercard research study looked to get more insight into this - surveying over 2,500 SMEs globally to identify the biggest challenges that SMEs face with the status quo, and the sort of financial solutions they are on the lookout for.

Here’s our take on some of the key findings from the study, and how we think SMEs can navigate the numerous financial options available.

1) Question the traditional conventions of business banking

While 57% of the SMEs surveyed used traditional banks for financial services, close to 50% of them considered the fees involved with such business products as too high and are considering switching to a non-bank.

Traditional banking is often associated with recurring account fees and fall-below fees, among other hidden charges. For businesses dealing with foreign currencies, high FX markups and exorbitant remittance rates to send money internationally are common.

As such, many business owners also resort to using personal bank accounts or credit/debit cards for business payments. However, as a company grows, this comes with its own set of problems. The added work to manage such expenses can lead to accounting and budgeting errors without the adequate spend controls - especially with a growing list of expenses such as employee payroll, software services, and vendors.

There’s a clear need for business products to offer services that are fair and, more importantly, transparent about the costs and fees involved with the account and associated services. With plenty of fintech and neobank alternatives now available, the conventional wisdoms of business banking can and should be questioned.????

Does a corporate account really require minimum deposits and annual fees in order to serve a business well?

Is it possible for corporate cards to allow businesses to make foreign currency transactions with transparent FX fees?

These are just some of the considerations we think businesses should have when selecting a corporate account or payments solution.

2) Go for products with streamlined and faster administrative processes

When it comes to doing business, time is money. Unfortunately for businesses on the hunt for a corporate account, the very process of opening one can be time-consuming, and laden with paperwork.

And if just getting started with an account was so painful, what would the day-to-day experience using it be like? Such sentiments hinder businesses from even getting started with financial products that can actually optimise their operations.

For instance, the study revealed that for Asia Pacific SMEs choosing a corporate card, the most important factors to them are laid out in the diagram below:

Speed is clearly a recurring theme, in that businesses want the assurance that they can get things done quickly before even getting started. Thankfully, newer digital platforms have taken steps to address these pain points.?

For example, by incorporating digital identity tools like SingPass (MyInfo Business), companies can significantly reduce the amount of paperwork required to verify their business information when submitting an application.

When it comes to corporate cards, having a virtual card available immediately upon account approval would allow a business to start spending immediately - even as they wait for the delivery of a physical card.

By making the most of specific digital solutions, processes can be shortened from hours and weeks, to a matter of minutes and days.

For business owners who don’t want to deal with long drawn out administrative steps to go from application to spending with a corporate account, this will be a game changer.

3) Look for products that offer rewards on your usage

Loyalty rewards such as cashback and points are often only associated with personal banking products like credit cards. But why should that be the case? 42% of the SMEs surveyed indicated that indeed, they were interested in such loyalty programs with a corporate card as well.

While this remains absent from most corporate card offerings, there are increasingly newer solutions that do offer rewards such as cashback on card transactions and user-exclusive discounts at partner brands.

Another striking statistic from the study was that cash has remained the top payment option for businesses in the Asia-Pacific, with 42% of SMEs reimbursing employees to make payments on behalf of their business. The current availability of corporate card rewards like cashback means that companies who rely on cash payouts instead of corporate card payments are literally leaving money on the table!

Finding the right card, one that offers rewards within none of the drawbacks like additional fees, should be a key priority for any business owner to reap the benefits of simplified expense management, and get rewarded while doing so.

How YouBiz helps SMEs with their business spending

If you’re part of an SME on the lookout for a better expense management solution, we think we can help. YouBiz offers SMEs the most powerful corporate card and multi-currency expense platform, all for $0/month:

YouBiz card spend helps your business earn unlimited 1% cashback, with none of the FX conversion fees per transaction diminishing your cashback - real 0% FX fees! For S$0/month, our multi-currency platform allows you to access the best exchange rates on 9 currencies and send money internationally with transparency on all remittance fees.

Learn more about why YouBiz could be right for your business here

Ready to get started? Sign up here

Subscribe to this newsletter to stay up to date on our latest insights, product updates on new features, and get subscriber-only promotions delivered straight to your inbox!