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Intergeneration SME Banking Relationship

Published on 30 October 2018

Move over Europe and North America - Asia is the emerging home to much of the new global wealth generated in recent decades, proving that global businesses are becoming much more East-facing. 

Unlike the West, the wealth found across Asia doesn't just come from multinational corporations but small to medium-sized enterprises that have seized the future by capitalising on emerging customer trends and technologies.

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What is striking is that for many of these SMEs, it's a family affair. To put this in perspective: over the next 25 years, roughly seven out of 10 family businesses are set to make a transfer from the older to the younger generation.

Approximately USD$2 trillion is set to change hands; mainly in Malaysia, Taiwan and Japan, where much of the wealth has been generated in the last two generations by entrepreneurs now approaching retirement age.

While a lot of wealth is set to change hands in the coming decades, many high-net-worth family businesses lack the tools to position themselves for the transformation.

A study from Professor Joseph Fan, of the Chinese University of Hong Kong, revealed that family businesses listed on stock markets in Hong Kong, Singapore and Taiwan lose roughly 60% of their value during the five years before and three years after their founder relinquishes control. All this points to a lack of future-proofing plans.

The essence of future preparation for a smooth and successful transition rests in a sound banking partner.

Maybank's partnership-centric approach is in line with the needs of many family-owned SMEs as they navigate through the brave new business world; managing revenue, expenses, risks and financial requirements, notwithstanding the differences that may exist in intergenerational family businesses.

Since it was founded in 1960, Maybank has grown alongside with many of the region's SMEs, helping foster them into multinational corporations around and beyond ASEAN. Maybank has approached this with a humanising touch. This means that the bank has continuously prioritised relationship building. The relationship the bank has fostered with first-generation SME CEOs to help them grow their companies from the nascent stages to the prosperous organisations they are today is what continues to make Maybank a vital player in assisting the newer, younger generation about to take the helm.

"Maybank's strength comes in the fact that it has evolved alongside its clients for over 50 years and has been there from the inception of many of the businesses that it supports through to this day. Our relationship-based approach coupled with the ability to deliver innovative solutions in a timely manner sets us apart from our competitors. This is at the heart of our mantra ‘Humanising Financial Services'", says Marc Leong, Head of SME Banking, Maybank Singapore.

On this bedrock of trust, Maybank brings to bear its own innovative and customised solutions, tailored products and services to ensure that owners can feel at peace that their business banking is in safe hands.

"Being a second-generation key person meant bringing new ideas to take our business to greater heights. We need a trusted partner in this journey who is able to assist in our transition; understanding our needs, offering the right banking solutions at the right time - so we can focus on discovering future opportunities," says J Chua, a second-generation leader of a local security business.

Maybank aims to create a smooth transition for the continuous handover of businesses that it has assisted for several decades and new ones looking to make a transformation into the future. The focus remains on nurturing valuable relationships with intergeneration SMEs and progressing Asia forward in generating the new global wealth.

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