Australian SMEs generate 57% of Australia’s GDP and 7 million jobs, and with much transformation in the SME banking landscape, we chatted to Keynes to hear how banks can innovate and improve their lending origination process to better enable their SME customers.
One of the biggest challenges is how to adapt in an environment of unpredictability. Alongside the disruption caused by COVID-19, which has impacted small businesses and caused changes to credit and risk policy considerations, ongoing changes in technology, customer expectations and competition will always be part of the SME lending landscape.
Banks can play a significant role in the nation’s economic growth by supporting SME businesses. The key is working out a way of doing that which is sustainable both for the bank, and the businesses they support. Removing archaic paper based activities with technology so that valuable human resources can be used to solve complex problems is essential for banks with aspirations to scale their SME operations.
A key opportunity for banks is simplifying their end-to-end loan origination processes, in line within responsible lending and compliance requirements. Technology can play a huge role here, lowering the burden on bank staff while still ensuring compliance with a bank’s risk appetite and relevant regulations. The application process and ‘time to yes’ for business loans have historically been very slow, but technology is changing this, and banks need to keep up if they want to retain their SME customers.
It’s about finding ways to simplify the process of approving a loan without simplifying the requirements for approval. Automating previously manual tasks like document processing and validation is one way to start this process to help achieve streamlined data verification and reduce reworking. There are so many innovative technology solutions in the fintech space that empower banks to efficiently manage their risk appetite while managing and growing their lending book.
In my mind bank’s that want to lead the way for their SME customers should focus on the following:
1. Having an adaptable technology strategy specifically focusing on their SME segment
2. Designing and building a seamless and user-friendly end-to-end capability
3. Being an early adopter of new technologies (eg. AI, machine learning, robotic process automation)
4. Partnering with technology providers that add value to your offering (helping you grow market share)
5. Finding new ways to engage customers at every stage of their journey with you, helping you to understand their needs and boost customer satisfaction.
350 Ways to Grow your Small Business by Peter Switzer. It's a compilation of success stories from 50 Australian small businesses and what it takes to create a great Aussie business. One of my favorite stories is Peter Mattick and Philip Salter and how they founded their company Salmat in 1979. It takes you through their journey from starting as a simple catalogue distribution business that later grew into a leading ASX-listed communications company. It's a great inspirational story about their commitment to listening to their customers and how that attributed to the growth and success of the company.
Keynes Lengkong has been a business and commercial banker for almost 20 years, both in Australia and Indonesia. This includes over a decade at one of Australia’s leading banks, where he experienced first-hand the important role technology can play in improving customer experience and business performance. In his spare time Keynes volunteers as a motorsport Australia race official and for a number of community service organisations.
