EY’s Asia Pacific SME survey

Small and medium-sized enterprises (SMEs) were the hardest hit during Covid-19. This deep and fast-paced transition of the sector has, in turn, placed immense pressure on financial services providers to adapt to meet their SME customers’ changing needs.

EY with headquarters in London is one of the largest professional services networks in the world and is considered one of the Big Four accounting firms. A recent EY survey of SMEs in 16 markets around the world, including Malaysia and five others in Asia-Pacific (Australia, Hong Kong, Indonesia, Singapore and Vietnam) shows businesses in the region are more likely to consider switching their main financial services provider than their global peers.

The survey also highlights key trends around the use of fintechs and digital-only banks, growth in digitisation of SMEs business and several ancillary services banks can target in the coming years to address SMEs evolving digital needs. Additionally, it shows significant gaps between SMEs’ expectations and bank offerings when it comes to time-to-credit and other financial products.

EY Asia-Pacific Banking & Capital Markets Leader, Andrew Gilder, says the huge changes impacting SMEs since the onset of the global pandemic mean most businesses are laser-focused now on accelerating their digital transformation to gain efficiency, cut costs and pivot their business models, henceforth banks have to adjust to meet those needs, or they’ll be met by a fintech, big tech firm or other competitors.

Andrew further explains the reason on the key findings from the survey that shows Malaysia and Hong Kong have the highest usage of fintechs as financial institutions in the world, with 28 percent and 26 percent respectively.

He also talks about markets in the region like Hong Kong and Singapore issuing new digital banking licenses and others like Malaysia also venturing into the same path, and what can traditional banks do to counter those inroads from fintechs and big tech into financial services.

Furthermore, Andrew also shares insights on:

One of the biggest issues SMEs face around the world is related to access to credit. That became an even bigger concern because of the pandemic.
The opportunity to develop concepts like digital-only SME offerings from financial firms in the region
The survey also points out that many SMEs are interested in additional services from their banks and are willing to pay for them. Why would it make sense for financial firms to offer these services that aren’t core to what they typically do?
Some of those ancillary services that SMEs in Asia are willing to pay additional fees to receive.

Lastly, he points out what can be done to help clients based on the insights from the survey.