A comprehensive look at the supportive role banks play in businesses’ long-term plans

As we get deeper into 2024, Singaporean businesses have basically been fighting on two fronts.

They’ve been facing short-term challenges in the form of rising business costs – due largely in part to higher taxes and inflation – as well as long-term consumer-focused considerations such as improving sustainability, digitalization, and expanding to new markets.

According to a DBS survey on local businesses, 42% of respondents said that they were worried about rising business costs while 43% ranked “ensuring consistent cash flow and managing costs” as their top priority this year.

To navigate this reality, banks – providing additional support in the form of capital and more – have emerged as an important partner to help firms achieve their long-term goals while minimizing the short-term impact of rising costs.
 

A greener path

One of the biggest long-term issues on local business leaders’ minds is going green, especially since the Singapore government has a plan in place to achieve net zero by 2050.

However, this green transition can be expensive. It’s estimated that the cost of reaching the United Nations Sustainable Development Goals will amount to a staggering US$195 trillion.

Add on the fact that business owners without relevant sustainability experience may not have the expertise to initiate these transformations, on top of the significant time investment and resources needed.

To assist businesses in sustainable transformation, DBS – together with Enterprise Singapore – launched the ESG Ready Programme earlier this year.

Much of the program is about supporting businesses through a holistic approach, such as by providing foundational training, advice, and support to Singapore businesses regarding sustainability. It will also offer preferential financing rates to alleviate some of the costs associated with developing and adopting green business practices.

“The ESG Ready Programme aims to help companies remove the guesswork by laying out a comprehensive roadmap with clear steps and relevant solutions, making it easier for them to take action,” Koh Kar Siong, DBS group head of corporate and SME banking, said in a statement.

Apart from this program, the bank also works directly with local businesses to support a green transition across their entire operations. One example is its partnership with local supermarket chain Sheng Siong.

The two entities are collaborating to engage up to 1,000 SMEs in Sheng Siong’s supply chain network, with DBS ultimately looking to introduce a sustainability program to help said SMEs identify, develop, and implement decarbonization plans. Further, the bank will organize upskilling courses and introduce green solutions to the firms it engages.

“It’s all about providing timely and tangible support by building an ecosystem of public- and private-sector partners,” Koh says.
 

Exploring new borders

Banks can also be a key partner to boost businesses’ international expansion goals, which is a key priority for more than 60% of them.

However, if the business isn’t familiar with local consumers or doesn’t have the right partner, the first step of international expansion could be challenging to navigate.

However, banks make the perfect intermediary to help SMEs bridge the gap.

DBS, for instance, has a network of services across Asia, with a strong presence in India, China, Hong Kong, Taiwan, Indonesia, and Singapore. As such, businesses looking to break into these new markets could turn to the bank to understand the local situation better or even work with it to enter the market effectively.

The bank currently has 100 locations in India – up from the previous figure of 28 – following its amalgamation with Lakshmi Vilas Bank.

Over in China, DBS increased its stake in Shenzhen Rural Commercial Bank to 16.69% last year, allowing it to support stronger digital transformation in the Greater Bay Area, as well as offer banking solutions for businesses looking to operate within the region.

“With our extensive regional footprint and comprehensive network outside of Singapore, this allows us to connect clients to regional and global opportunities to support their growth and expansion ambitions,” says Koh.
 

Staying nimble

Last but not least, staying adaptable should always be a key long-term goal for any business. As the saying goes, “adapt or die.”

In this area, banks make important partners because they’ve also got an extremely diverse set of offerings. If business owners can’t always predict what’s coming in the years ahead – and it’s unlikely that most could do it with a high level of accuracy – then it’s a good idea to work with a partner that can provide the right solutions for almost any contingency.

For the all-important digitalization of operations, for instance, they could turn to DBS, which offers a suite of digital solutions. It includes anything from online HR and payroll capabilities to cybersecurity solutions, which aim to improve efficiency in day-to-day operations.

Another example: Perhaps a local mom and pop store has decided that they need to bolster their insurance coverage. This, too, is something that banks have in their arsenal. Case in point: the Heartland Merchant Banking Package from DBS, which includes insurance coverage – with a fee waiver of up to one year – on top of other solutions, such as accounts that don’t require a minimum balance and can make unlimited local transfers for free.

Overall, these measures are designed to support local businesses’ cash flows.
 

Anticipating the next few years

The partnership between banks and businesses to help the latter hit their long-term goals will only continue to evolve as time goes on.

Koh says that with DBS, the intention is to continue establishing meaningful collaborations and developing ecosystems of partners to help these small and medium-sized businesses.

“It’s a big world out there, and businesses really don’t have to go at it alone. There’s always different types of support available for firms to meet short-term challenges while achieving long-term goals,” he says. “We hope that knowing this, business owners can achieve whatever they set out to do.”

This article was originally published on Tech in Asia.