Singapore banks prepared for downturn

Through its Quick Finance engagement tool, DBS can quickly approve up to US$300,000 (RM1.3mil) in small-ticket working capital loans for SMEs almost instantly. — Bloomberg

SINGAPORE: With economists worldwide forecasting a global recession, local lenders DBS, UOB and OCBC are taking proactive steps to support their customers ahead of a possible economic downturn.

These include using technology to pre-empt any deterioration in the financial environment for small and medium enterprises (SMEs).

In August last year, for example, UOB launched a digital-banking platform to meet SMEs’ financial and other business needs. For instance, customers can monitor their cash flow, apply for loans, as well as set alerts for foreign currencies.

These SMEs can also access digital solutions, such as accounting and invoicing, human resources and eCommerce, and automate and streamline certain processes that would improve productivity and efficiency.

UOB head of group commercial banking Eric Lian said: “We have always taken proactive steps in any market downturn or global challenge, through every generation of business.”

Meanwhile, DBS has harnessed artificial intelligence (AI) and machine learning (ML) in its systems, which has enabled the bank to customise solutions for its customers, based on their transactions and profiles.

This has enabled the bank to use financial projection tools to detect early warning signs of financial distress and identify vulnerable borrowers.

DBS has also automated the preparation of detailed financial analyses for loan applications through natural language processing, reducing the time spent on manual tasks by about a third. This has freed up relationship managers to focus on higher-value tasks, such as client advisory and designing solutions.

DBS uses both AI and ML to understand its customers’ business activities better, allowing the lender to provide the best recommendation at the right time.

Through its Quick Finance engagement tool, for example, the bank can quickly approve up to US$300,000 (RM1.3mil) in small-ticket working capital loans for SMEs almost instantly. Last year, more than 55,000 loans were offered pre-emptively, while close to US$120mil (RM539mil) was dispersed via the tool over the whole year.

“Using AI and data analytics, we’ve reduced applications to just one second to approve and in some instances, instant disbursement with no additional paperwork,” said DBS group head of SME banking Koh Kar Siong.

The moves come amid waning business sentiment and a deteriorating outlook for local SMEs, with the OCBC SME Index turning negative in the first three months of 2023. — The Straits Times/ANN