RHB banks on small-, mid-caps going abroad

It has taken SMEs on trade missions in several South-east Asian countries; eyes private wealth business via company owners


RHB Bank, the fourth-largest bank in Malaysia, will invest in building up its small-and-medium-sized enterprise (SME) network in Singapore as it looks to carve a bigger niche by taking such businesses beyond Singapore and into Asean, said its top executive in Singapore.

In an interview with The Business Times, Mike Chan, CEO of RHB Bank Singapore, said the bank will also add services such as cash management to align with this strategy, as SMEs will require more tools and advice in order to expand regionally.

"Our sweet spot is in the mid-cap, and in the smaller enterprises," said Mr Chan. "We'll do our part in facilitating trade in South-east Asia. It's a long-term plan, it's not for short-term maximisation."

Singapore companies, he noted, are able to export technology to South-east Asian markets, which are rich in raw materials. Manufacturing costs remain lower as well.

RHB has taken SMEs along on trade missions in countries such as Indonesia, Cambodia, Laos, Thailand, and Malaysia, in recent times. The next stop is Myanmar.

"Through networking, you can get a lot of things done. You cut down the cost behind searching for trustworthy people," said Mr Chan.

This comes as SMEs still face a funding gap, with banks in general saying they have found it difficult to check against SMEs' accounts. SMEs may also have difficulty finding suitable collateral - typically a piece of property - to back against loans.

Acknowledging this "perennial issue", Mr Chan said more banks are getting SMEs to start operating cash accounts with them that would allow the financial institutions to get a fuller view of the SMEs' operating cashflow. This is so that banks can then prescribe funds based on what the companies can afford.

Banks are also tying up with financial technology (fintech) firms to better analyse the state of their ongoing business. RHB plans to engage some fintechs in a similar way and hopes to start work in this area in about six months, said Mr Chan.

The steady focus on the SME space comes as RHB looks to expand into private wealth, offering additional services to business owners whose personal fortunes are tied closely to the success of their companies.

"We find that the owners of all these SMEs are natural private wealth clients," said Mr Chan. "Our niche is the Malaysian-Singapore corridor."

As part of that strategy, the bank this week launched a multi-currency card that is embedded in a mobile app, joining its peers in targeting frequent travellers who want a more convenient and cost-effective way of getting foreign currency.

The service, known as RHB TravelFX, does not require users to be banking clients of RHB and allows business owners and consumers to access competitive foreign exchange (FX) rates for overseas travel or expenses.

Users with Singapore dollars will have access to 10 other currencies such as Hong Kong dollars and the greenback. The multi-currency card's wallet has no annual fee, or a minimum balance fall-below fee.

Mr Chan said with Singapore attracting more fintechs, banks here have been able to strike up conversations with these startups to get ideas on solving customers' pain points.

"It boils down to innovation. The banks from the legacy world are trying to change to ensure long-term survival."