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Customer Focused Innovation in SME Banking

Explore the challenges and opportunities in SME banking, including customer centricity, regulatory changes, and the role of technology. Gain insights into developing products, acquiring and screening clients, serving SME clients, and managing information and knowledge.

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Customer Focused Innovation in SME Banking

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  1. Istanbul Chamber of Commerce Customer Focused Innovation in SME Banking Assoc. Prof. Dr. Abdulkadir Tuna SME BANK - ADFIMI INTERNATIONAL DEVELOPMENT FORUM KUALA LUMPUR, 5-6 JULY, 2012

  2. OVERVIEW • A difficult environment but theoutlook is improving • Today’s SMEs want many things • The challenges in pursuing SME-driven revenue growth • Customer centricity: crucial, but tough to achieve

  3. The series will focus on the fivekey issues facing the industry in the World • The regulatory challenge • Innovating for the changing customer • Globalisation • Restructuring for growth • Rebuilding trust and reputation

  4. The tipping point in SME banking is being driven by four key factors Needs of SMEs are changing… • Customers want more than money from • their banks, valuing innovative and tailored • products allied with sound business advice Regulation... • Pressure from Government Regulators Technology enables pure players to disintermediate banks and ‘steal their lunch’ New entrants... Erosion of credit relationship... • Credit balances are falling, indicating that • SMEs are either using less credit, or are • finding alternative sources

  5. Key activities at each of the five stages of the SME banking value chain

  6. 1.Understanding the SME Market

  7. First Mover Advantage: Bank Muscat Targets Oman’s Unbanked SME Market “ We saw that no one was trying to lend to SMEs in Oman, so we said, ‘Why don’t we be the first?’”

  8. 2.Developing Products and Services

  9. “ SME banking is not about providing a loan. It is about the complete relationship valuethat you can offer the SME. This spansthe opportunity on the liability side and theopportunity on the transaction side.” V. Chandok, Senior General Manager, ICICI Bank

  10. 3. Acquiring and Screening SME Clients

  11. “ Many small business owners have told us that we were the first to recognize theirbusiness in a meaningful way, by giving it a line of credit.” M. Bernstein, Head of Small Business Banking

  12. 4. Serving SME Clients

  13. Banks that segment their approach can provide multiple levels of personal service Branches are the primary delivery channel for nonlending products

  14. 5. Managing Information and Knowledge

  15. Five strategic areas form thefoundation for SME banking performance

  16. CONLUSION • Banks in general are not overly concerned... • In developing markets, there are more opportunities.... • Where innovation is flourishing, .... • The challenge is very different for start-up or... • There are many examples of incremental product, channel....

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