DBS offers SMEs digital accounts with no minimum balance

Singapore

TO help the growing number of small and medium-sized enterprises (SMEs) save on banking costs, DBS on Monday launched a digital account with no minimum balance required.

The move to digital-only accounts makes it more affordable for SMEs as they save on processing and back-end costs, said DBS.

SMEs which sign up also get free access to DBS's corporate online banking and mobile app.

Instead of having to visit a branch, they can simply set up an account online and start transacting.

An initial deposit of S$1,000 is required and a monthly fee of S$18 is charged. There is no annual fee nor a required minimum sum.

In comparison, the DBS Business Account requires an initial deposit of S$3,000 and a minimum daily average of S$10,000. The bank charges S$35 when the amount goes under S$10,000 each day. But there is no monthly fee.

This makes the digital account suitable for cash-strapped young companies in Singapore, which may not have the resources or flexibility to keep a fixed amount of money in the account each day.

The move to digital not just saves costs, it is also in line with the trend of increasing SMEs going online for their banking needs. It was found that close to 60 per cent of DBS SME business accounts are applied for online, compared to 12 per cent in 2014.

Joyce Tee, group head of SME banking, said: "We have designed a digital-only account to give SME owners an option to keep banking costs low, especially when the operating environment has been more challenging in recent times. We are able to pass on some savings to SMEs and not charge fall-below fees by digitalising our processes and implementing more straight-through processing on the back end."

One SME that has benefited from this new digital account is Stamford Painters. George Li, its director of projects & innovation, said: "The 'no-minimum' balance requirement is useful as it gives my business flexibility in how I can use my cash to develop my painting business efficiently. I can also easily manage my banking with the mobile banking app. The application process was simple, straightforward and fast - all I had to do was key in my business registration number and I was able to complete the application quickly."

DBS, however, is not the first bank here offering zero minimum balance in accounts for SMEs.

Maybank has been offering such a service with the FlexiBiz Account since 2009. It requires an initial deposit of S$1,000, with no monthly account fee.

A Maybank spokesman told BT that there has been strong growth in FlexiBiz Accounts over the last two years.

While declining to give exact figures, the spokesman said that as at January 2016, the number of accounts has more than doubled compared to a year ago. The number of accounts is in the five-figure range.

However, setting up an account is still not an entirely online process as the bank still needs to meet customers face to face at a branch for "due diligence" purposes.

For lenders such as OCBC Bank, the human touch is still a necessary part of the online application as well. While it is embracing digital, such as its novel business mobile app that uses biometric authentication, business owners still need to submit a simple application form online to set up an account. OCBC's business development managers will visit them within 24 hours, subject to the customers' availability, to assist and advise them on the process.

Says Eric Ong, its head of emerging business, global commercial banking: "We believe that personal advisory is important to address whatever queries our customers may have, which will not be possible through a website. So not only do our customers not need to visit a branch to open an account with us, but they also get the face-to-face interaction and service that many of our customers value."