Exclusive Interview with Toh Su Mei, Chief Executive Officer, ANEXT Bank: Through APIs, we work with industry partners to serve their customers’ financing needs directly on their platforms to reduce the friction and hassle of banking.

TDB: ANEXT Bank has developed and introduced a unique value proposition for SMEs in Singapore. What has been the guiding vision and philosophy for the digital bank and what unmet needs for SMEs, particularly small businesses, are you looking to address that have not been adequately serviced by incumbents?

Toh Su Mei: When ANEXT Bank was launched, we did so with a mission to reimagine financial services for financial inclusion. Our aim is to accelerate financial inclusion through technology-driven innovation to deliver accessible and effortless financial services for SMEs, not just in Singapore where we’re headquartered but also across the region.

Singapore may have a highly banked population but studies have shown that SMEs are still underserved by the country’s banking sector. According to a Deloitte survey, 72% of SMEs require funding for working capital and to mitigate cashflow problems. In a recent survey we conducted, we found that 7 in 10 Singapore SMEs wanted to get access to financial services from non-banking platforms. Additionally, one-third of SMEs surveyed found it difficult to get access to financing due to their business not meeting the requirements of existing financing options, lack of financing options, or loan amounts not meeting their business needs.

This is the financing gap we hope to address by offering affordable and flexible financing options for SMEs. They can access it either directly through us or from our partners onboard the ANEXT Programme for Industry Specialists (APIs). Through APIs, we work with industry partners to serve their customers’ financing needs directly on their platforms to reduce the friction and hassle of banking.

TDB: What have been the key business outcomes and achievements following ANEXT Bank’s soft launch in June 2022 and how has this informed your strategy for the Bank going forward?

Toh Su Mei: We saw strong demand for our digital financial services among SMEs, especially micro and growing businesses – those whom we set out to serve. ANEXT Bank is staying true to its mission and its customer base is reflective of its efforts:

  • 68% of our customers are Micro Businesses (MSMEs)
  • Additionally, we have also observed that 78% of our ANEXT Business Account customers and 56% of ANEXT Business Loan customers are micro businesses.
  • 31% of our customers are Foreign Business Owners who have incorporated a business in Singapore. They are made up of 44 different nationalities.
  • We’ve seen an average of 40% month-on-month increase in cross-border transactions by our customers – a testament to supporting their internationalization efforts.

Besides knowing that we are on track to delivering what we had set out to do, this is also testimony to the offerings we’ve launched and looking to continually enhance:

  • ANEXT Business Account – A multi-currency deposit account that is free to set up with no maintenance or minimum balance fees, and rewards SMEs with daily interest on account balances.
  • ANEXT Business Loan – A fuss-free and flexible unsecured financing solution of up to S$300,000 with flexible repayment options. The minimum loan amount available starts at S$5,000 and no additional document submission is required for loans under S$30,000.
  • ANEXT Fixed Deposit – Intended to provide SMEs an alternate way to grow their business funds while having access to it when needed, with tenures from as short as one month up to 36 months, and placement amounts from as little as US$5,000.
  • ANEXT Programme for Industry Specialists – The programme aims to make digital financial services more accessible through embedded financing solutions, so SMEs in Singapore and the region, can access and manage their financing wherever they are doing their business digitally at. It is open to the participation of e-commerce solution providers, delivery and services platforms, trade and procurement platforms, and payment services platforms that support SMEs’ cross-border operations through digital-based services or platforms.
  • SME Friends of ANEXT – An initiative to better understand the challenges SMEs face and to reimagine financial services together. To start off, we invited 8 business owners of different expertise and experience to share their stories, challenges, and pain points. Hear their stories here.

TDB: The SME financing gap continues to grow across ASEAN and there is a clear opportunity to engage with SME clients through high-quality digital interactions. How has ANEXT Bank re-imagined the SME client journey to enable faster access to credit and ease of repayment?

Toh Su Mei: As a digital bank, our financial services are naturally readily accessible. But what we’ve ensured is to also make it simpler, safer, and more rewarding for SMEs to get financial services from us. SMEs, especially micro and growing businesses, now have an additional option to get access to financial services, whether it’s to manage their day-to-day business or for business growth.

Examples of how we have been doing so include:

  • Offering a full digital onboarding process, which includes being the first to avail remote onboarding for SMEs. This means business owners based anywhere in the world can easily start a relationship with a bank by opening an account as long as they have a Singapore-incorporated business, or get access to financing and fixed deposits.
  • Omitting the cumbersome paperwork that SMEs tend to face whilst applying for financing with our ANEXT Business Loan as no additional documents are required for loan amounts under S$30,000. For loan amounts above S$300,000, we only require their latest 6 months’ bank statements.
  • Offering SMEs daily interest on their account balances and availing investment options in the form of fixed deposits with placements as short as 1 month and as little as US$5,000 as a way to grow their funds without having their cash flow tied up for long periods.
  • This gives SMEs peace of mind as we’re regulated by the Monetary Authority of Singapore and offer three-factor authentication for all transactions via facial verification. They can also access banking services on the go with our Online Banking platform and mobile app.

TDB: It has been a year since the launch of the ANEXT Programme for Industry Specialists. What has been the response from ecosystem partners and how is the initiative looking to transform the delivery of embedded finance solutions and augment financial inclusion efforts?

Toh Su Mei: Financial inclusion is a collective effort across the ecosystem, from banks, and industry partners to public sector agencies. We believe that innovation will happen faster when we do it together in an open and collaborative manner, which is also why we started the ANEXT Programme for Industry Specialists (APIs) in 2022.

Having run the APIs for a year, we’ve been able to apply the learnings and deliver new embedded financial services solutions via our latest partners – DeliveryChinatown, Hong Xin Da, and Shopmatic. These new solutions extend beyond financing; industry partners are now able to avail of interest-bearing offerings, such as allowing their customers to earn interest on their wallet balances or placing fixed deposits. To make it even easier for our partners, who are more often than not SMEs themselves, we launched the APIs repository as part of the enhanced program.

By working with these new partners as part of our APIs, we aim to make financial services more accessible to more than one million regional SMEs within the year.

We welcome all e-commerce solution providers, delivery and services platforms, trade and procurement platforms, and payment services platforms who support SMEs’ cross-border operations through digital-based services or platforms to join us in our mission to reimagine financial services and scale access to financial solutions to support SMEs’ growth ambitions. SMEs can also nominate the platforms they are doing business at here http://www.anext.com.sg/partner-us

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