ANEXT Bank’s Toh Su Mei on how to stay ahead of SMEs needs

The CEO of Singapore’s newest digital bank talks about why banks find it challenging to meet the SMEs needs, and why digital banks are the answer.

Toh Su Mei recalls a time during the early days of her career when a former colleague made a data entry mistake in the bank record of a small and medium-sized enterprise (SME).

“That seemingly small mistake ended up affecting the SME’s request and access to a credit line to fund his business operations. That was when I realised banking was more than just a job for me,” Toh, CEO of ANEXT Bank, told Asian Banking & Finance.

Prior to that, banking seemed the natural course of action given Toh’s education background, saying that she “stumbled” into the industry after graduating with a major in Economics. But moments such as this cemented to Toh how critical their role is to SMEs.

“I’ve not looked back since my first experience where I witnessed first-hand how the right financing solution and quality of banking services could make or break a business. And for small and medium enterprises, this was even more apparent,” she said.

It became more than just banking to Toh. “It was an opportunity for me to make an actual difference – it’s not about financing a business, but a person’s livelihood and aspirations. Constantly and actively listening to customers is key, and I enjoy the deep relationships built with my customers in this process. If I somehow had to choose my first job again, I’d pick banking and do it all over again!” she said.

Decades later, Toh is now chief executive officer of ANEXT Bank, one of the newest digital-only banks granted a license to operate by the Monetary Authority of Singapore (MAS), with over two decades of serving SMEs both in Singapore and across the region. Prior to her new role, Toh was regional head, SME loan product management & alternative lending for DBS Bank.

It was a role that prepared Toh to lead one of the country’s most anticipated virtual banks, and she has incidences like the one she shared earlier in mind as she and her team took advantage of their structure as a digital-only bank to find ways to better service SMEs.

“[A] key differentiating factor for digital banking is the ability to ensure a consistent service and operating model at scale versus say a RM-led [relationship manager] approach where incidents like what I shared earlier, will be far and few,” she shared.

You made the jump from being a head in a traditional bank to becoming the chief executive of a digital-only bank. So far what has been the difference? Tell us about your leadership style.  What kind of work culture do you cultivate as the CEO?
Traditional bank or digital bank, I believe that for it to be successful, its people have to be passionate and obsessed with the desire to understand and serve customers. That’s why for us, having the right people and culture is the most fundamentally important part of setting up the business. I strongly believe that with the right people, you can achieve anything as one team. 

Our local team is formed by people that are passionate, driven and leaders of their own fields. Over 90% of our staff at ANEXT Bank are local, [and] they bring with them a range of industry experiences from banking, fintech to technology. The average working experience of the team is more than 15 years.

I’m also an advocate of an open and transparent company culture, people are encouraged to speak of their minds freely, take ownerships and collaborate. 

Why does the banking sector still find it hard to meet the financial needs of SMEs in Asia despite recognizing that there is an issue? 
There is no lack of trying by the banking sector for sure. The challenge is that the needs of SMEs today are changing rapidly - the markets they operate in, the business models they adopt and the financial needs they have are much more diverse each day.

As a digital bank, we are looking to tackle these diverse needs by providing financial services at scale – for example, providing more accessible and effortless financial services to SMEs of all sizes, and not just to the bigger boys.

As business models evolve towards a hybrid and digital-first model, so should financial services. According to a Deloitte research, small businesses account for more than 85% of cross-border e-commerce market in the Asia Pacific region. And that’s just one segment of the “unserved and underserved” SME community that ANEXT Bank is looking to serve. 

Essentially, SMEs who have pivoted their business models to a hybrid and digital-first one, and for whom we’re anticipating and serving their financing needs through embedded financing – basically enabling access from where they’re doing their businesses digitally.

I also believe that there is room for the traditional banks to collaborate with fintechs and digital banks. Together, the industry can complement each other and truly provide diverse services to SMEs across their growth journey.

As head of SME banking in past banks, what have you and your team(s) done to solve the financing gaps of SMEs–and how do you plan to bring these solutions and services to the next level as the leader of ANEXT Bank?
We truly live our mission of “providing innovative, accessible and effortless banking services” in our product design. We want to make banking an easy and rewarding experience for SMEs, because we know business owners have no time to “operate bank accounts” and spend time to figure out cross-border FX, interest rates, amongst others.

It was with this mindset that we launched the ANEXT Business Account – a no frills business account that did not require fees to start nor maintain so as to help defray operating costs. 

We enabled remote onboarding which meant an SME abroad did not literally have to go all the way to open an account, and we're seeing a lot of foreign business owners take advantage of this feature, which in turn motivated the team to dive deeper into the needs of the different SME personas so as to push out even more relevant features.

Our next priority is to innovate together with partners. Adopting an open and collaborative approach, we believe in joining hands with industry partners and public sector agencies. By leveraging on each partner’s unique position, knowledge and subject matter experts, we are able to tackle industry pain points at scale.

What are your goals as leader of ANEXT Bank? 
On the business side, our goal is to truly deliver on our promise, that is to bring about what’s next in financial services and provide micro and small businesses digital financial services that are innovative, accessible and effortless to enable them to succeed in business. On people side, I’d like to build the right culture to allow everyone to excel and shine in their jobs. 

What three things have you learned from your experiences that shaped you as a banker?
First, know your customers. This is fundamental and the first step to getting things right. Stay focused on the long term: It’s easier to go from 0 to 1, than to go from 1 to infinity. Although I’ve said that launching ANEXT Bank is the most memorable moment so far on this journey, I know it’s just the start. The focus now is on building a scalable, sustainable and customer-centred business model for the bank. Remember that there are humans behind the technology: A passionate team who truly cares about the customers defines the quality of products and services, and defines who we are as a bank.

What are the biggest challenges in building a neobank from the ground up, and how did you and ANEXT Bank overcome these challenges so far?
The biggest challenge was really in attracting and building a team of like-minded people that’s driven and passionate in enabling effortless access to financial services for SMEs. 

To reimagine business banking and how it should be, we needed to have diverse talent that could look at things from a different perspective to solve the needs of our customers, and we were fortunate that many believed in our mission and values to join us in our journey to being Singapore’s newest digital wholesale bank. 

We believe that in pushing boundaries to bring about what’s next in financial services as a team, it will also help support the local talent development as we work with all participants in the financial services industry to raise the bar for the sector. Together, we can cement Singapore’s reputation as a leading fintech and innovation hub.