Hong Kong has 270,000 to 280,000 small-to-medium sized enterprises (SMEs), making up more than 95 per cent of the total number of local businesses. It follows that provision of banking services for SMEs is an important function of the banking industry, with gross annual revenue from SME-generated banking business running at around US$4 billion.
Last year SME banking was a key growth engine for the Standard Chartered Bank, achieving double-digit growth in both income and operating profit. Betty Ku, general manager of SME Banking of Standard Chartered Bank (Hong Kong) Limited, points out that SMEs provide lucrative business for banking institutions in Hong Kong since overall they comprise more than 90 per cent of the total number of corporate banking clients and contribute 50 to 60 per cent of gross domestic productivity.
She also believes that SME clients are still "under-served" by the banking industry as a whole, and more talents and new products are needed to address the increasing market demands.
Ms Ku points out that Standard Chartered's extensive distribution channels, product innovation and international networks have contributed much to the bank's success. It now has 300 staff responsible for SME banking business, 60 per cent of them frontline business relationship managers. Meanwhile, 10 of the bank's 60 branches across the territory are in key strategic districts such as Cheung Sha Wan, Mongkok, Tsim Sha Tsui and Central where SMEs are mostly concentrated. All have dedicated "SME corners" serving SME clients. Also, the bank will open its first self-contained SME banking centre this month.
"Because of the wide variety of businesses our SME clients are involved in, their requirements vary greatly and so we must develop more customised and innovative products to cater to their different needs," says Ms Ku.
Some of the bank's new offerings tailored for SME clients include business instalment loans, international trade accounts and express trade services, all aimed at providing them with greater flexibility and convenience in running their businesses.
Business instalment loans are an unsecured lending product involving relatively high amounts over a long payment period with no collateral required. An international trading account is a one-stop banking solution that combines a client's cash and trade transactions, tele-electronic banking services and trade advisory hotline. It is tailored for SME clients in the trading and manufacturing industries. Express trade offers flexibility and a shorter approval period to help clients multiply their business.
To keep pace with business growth, Standard Chartered's SME banking is now recruiting. A total of 50 experienced staff have already joined up and been assigned to posts in frontline operations, product development, marketing and risk management. Another 50 will be hired from career days, internal staff referrals and recruitment agencies. As with the first 50, the yardstick for selection will be the quality of the candidate.
"Our SME clients are mainly the decision-makers in companies, therefore our frontline staff should be capable of providing them with professional consultancy services, advising them on the products best suited to their needs," says Ms Ku.
Jobs in SME banking are quite demanding, since staff must familiarise themselves with the many different areas of SME business. However, the bank's comprehensive training programmes enhance staff's work competence in risk management related to SME business as well as product training and customer services.
"We place heavy emphasis on people development and their quality," says Ms Ku. "Every member of our staff will recognise our corporate vision and our SME banking mission, and identify their personal goals. In this way we can help them develop their careers while at the same time driving the bank's ultimate business goals."
Ms Ku herself worked in wholesale banking during her initial years with the bank, then got the opportunity to switch to investor relations and corporate affairs. Having accumulated a wide variety of experience, she was then moved to consumer banking as the general manager of SME banking. Ms Ku regards her advancement as proof of how Standard Chartered supports staff to reach their goals if they show initiative and determination.
While recruits with experience in banking are favoured, fresh university graduates are also considered if they demonstrate a positive attitude towards the industry.
"We have had some successful cases among such graduates," says Ms Ku. "Even though they had no SME banking experience, they proved they could perform very well since they had a positive attitude towards learning, quickly developed a passion for the industry, and accepted both our corporate mission and banking strategies."
Pointing to the likely increase in SME banking business, Ms Ku believes the market will become increasingly competitive as players devise new products ad innovations, and further extend distribution networks.
The key to such growth would be a strong pool of manpower specialising in such SME services as customised products, unsecured lending services, non-funded products such as bankers' assurance products, yield enhancement and risk management services.