STANDARD Chartered and business management solutions provider Sage on Friday rolled out a digital cashflow solution for small and medium-sized enterprises (SMEs) in Singapore, aimed to help them better anticipate and address funding needs.
The solution, Sage CashView, combines cashflow reporting tools with a prequalification to apply for Standard Chartered's business instalment loans, a move that the two companies say differentiates it from current options in the market.
"If you think about the two primary things that are occurring - one, it's the identification of the need, and then it's the confirmation that there is a solution there for you. When you think about most of the bank offerings or most other offerings, those two things don't come together fully," Kerry Agiasotis, Sage's executive vice-president of Asia-Pacific, told The Business Times. Sage, which has "thousands of customers" in Singapore, distributes its software locally through its partners.
The Sage CashView digital dashboard provides SMEs a view of the business’ key ratios and results - data that Standard Chartered can view to prequalify companies for the loans.
This innovation is also set to speed up the process for SMEs to get funding. "We plan to reduce it significantly. I don't want to say anything now, but (it will be) in tandem with CashView plus automation and digitisation," said Neil Daswani, the bank's global head of business banking and corporate partnerships.
Other features of the solution also include a one to 365-days financial forecasting - a horizon that extends beyond the two months SMEs typically have a view of, said Mr Agiasotis, referencing a Visa survey.
But while having a forward-looking view of cash helps local businesses manage shortfalls, it's also important for them to put their funds to the best use, both spokespeople pointed out.
Mr Daswani of Standard Chartered said: "You'd be surprised to find that there are a lot of cash-rich SMEs who are in surplus, and so the equation changes to: When should I place that surplus? How long should I place that surplus for? And what's the best avenue?" The bank serves SMEs in the "double-digit thousands" in Singapore, ranging from homegrown companies to subsidiaries of multinationals.
"Without sort of giving you a detailed numbers at this point, I can certainly say with conviction that in this market of Singapore, that's the nature of our book," he added.
Going forward, Standard Chartered and Sage are also looking at layering additional integration and functionality, including automated bank reconciliation reporting and payment capabilities, by 2020, as well as the ability to offer pre-approved loans.
Sage CashView will be first made available in Singapore, followed by Malaysia. It will be launched at the upcoming Innovation Lab Crawl, as part of this year’s Singapore FinTech Festival.
According to Singstat, there were 263,900 enterprises in Singapore in 2018, of which 99 per cent were SMEs.
In Singapore, the 2018 SME Development Survey showed that 44 per cent are facing internal difficulties managing their finances. Some 50 per cent of SMEs found to be facing challenges in managing the finances labelled challenges in handling "cashflow, liquidity, and credit risk" as a key concern, up from 38 per cent in 2017.