Paying More Than You Should? Top Factors When Choosing Your Business Banking Partner
Editor’s Note (18 January 2017): Article has been updated to reflect recent changes to DBS’ Digital Account service. Newly inserted information will be denoted by a*
For most business owners, choosing your banking partner is akin to selecting your partner in life – once you have decided on one, you will probably be sticking with it for as long as your business is running.
Deciding on your business banking partner is therefore critical and has to be done right from the start.
Here are some considerations when you choose your preferred business banking partner.
1. Value for Money
As an SME, pricing and fees are the most important factor for us to consider. Here’s the table of comparison for the various banks in Singapore:
Table 1 lays out the costings for the different corporate accounts for SME banking in Singapore.
While OCBC Business First Account – Value and UOB Current Account does not charge an annual account fee, OCBC Business First Account – Value has a monthly account fee of S$38, and UOB does not offer a mobile banking app and free security devices for its SME customers.
That leaves us with DBS Business Account and OCBC Business First Account – Lite. DBS Business Account would fare better against OCBC Business First Account – Lite as the latter charges a monthly internet banking fee of S$25 (free for the first 3 months), while this fee is waived with DBS if you open your account online.
Furthermore, DBS SME banking customers receive 5 free devices for their internet banking – so the total fee per year to be paid is only S$40 if you maintain the minimum balance of S$10,000.
If you are attracted by the lower minimum balance requirement of $5,000 in OCBC accounts, on closer scrutiny, you would realize that the recurring fees being charged each month would offset this benefit.
*Update 18 January 2017
DBS has recently made some changes to their Digital Account for SMEs that will sure to appeal to anyone hoping to open an account for their businesses.Starting January 2017, with immediate effect all IDEAL fees are waived, including monthly subscription fee, token fee, and setup fee.Usage of IDEAL will no longer be charged with fees and users who are on Enquiry mode can immediately upgrade to Transacting mode without fees.In addition, the cap of 5 online banking tokens have been removed as well.Now users can request for as many as necessary without additional fees, and also replace worn out tokens without have to pay any replacement charges.
2. Convenience and Accessibility
The second factor that you should consider is the convenience. Ensure that whichever bank that you opt for as your banking partner has a wide network in Singapore. From this regard, most banks have a pretty decent coverage and branch outlets in Singapore.
Another factor to add on to the convenience factor is whether the bank offers mobile banking so that you can check your transactions on the go, on top of its desktop internet banking.
If you look at the table of comparison above, DBS is the only one with a mobile app for corporate banking customers, hence they stood out in this regard.
One should also consider the process of opening an account. Here’s a summary of the process:
3. Value Added Service
Finally, choose a banking partner that can value add beyond your financial needs.
From what we understand, DBS seems to stand out in this regard with its BusinessClass initiative. With the DBS BusinessClass App, business owners can reach over 15,000 entrepreneurs, customers and business experts in the region and network with them.
According to the website, the BusinessClass initiative aims to help traditional SMEs access global tech companies, by way of DBS curating for solutions that can improve productivity for these SMEs. For technology-based companies looking to offer their service to traditional SMEs, DBS BusinessClass can also come in and help bridge the connection.
Based on the above, our evaluation has DBS coming out on top of the other banks as a preferred banking partner.
Value for money, along with its business account benefits, respecting our time as business owners with ease of banking, and having the BusinessClass programme that opens the doors to new collaborations are the reasons why DBS stood out.
If you are considering your SME bank, the various pointers above would provide a good guidance for you. As a business owner, it is important to choose a bank that can serve you efficiently, and provide value beyond just daily business transactions.