Executive View: Melvyn Low, OCBC

Published: Apr 2024
Melvyn Low, Head, Global Transaction Banking, OCBC Bank

Pushing the envelope on digital

Melvyn Low, Head, Global Transaction Banking at OCBC, Southeast Asia’s second largest bank by assets, discusses the evolution of transaction banking, the impact of digitalisation on smaller corporates, and how the bank is helping corporate clients begin operating on a regional level with its extensive ASEAN-Greater China network and experience.

Melvyn Low

Head, Global Transaction Banking
OCBC logo

Tell me about your background and what led you to your current role.

As a computer science graduate in the early 90s, I actually landed an internship at OCBC in their IT department. And while I was there, I was absolutely fascinated by the industry. It was like a light bulb went off in my head, and I knew that banking was the career path for me.

So, I decided to pursue my MBA in finance, and the rest is history. I joined Standard Chartered Bank as a Corporate Banking relationship manager in the early 90s. While working on an electronic banking project with broker-dealers, I chanced upon a start-up unit called cash management. Now, transaction banking was a pretty new concept back then, especially when it came to cash management.

But here’s the interesting part. I saw a job advertisement by HSBC and joined as their first cash management hire in Singapore. It was a great opportunity for me in a new area of banking that leveraged my technology and banking background. And after a few years, I made the move to Citibank at the turn of the millennium, where I had an incredible 18-year career.

But you know life has a way of coming full circle. In 2018, I made the decision to join OCBC once again. As an emerging Asian bank, OCBC has a vision to really push the envelope on digital banking, ride the wave of technology, and establish themselves as a leading player in transaction banking in the region. And let me tell you, it has been an amazing journey so far.

How have you seen transaction banking change during this time?

For large corporates, transaction banking used to be mainly about optimising the whole working capital cycle, and using technology to increase the efficiency of finance operations. You can now run a whole global treasury with two people, and many companies do that. As we move on, companies are becoming more sophisticated, helped by standardisation and the move from host-to-host to API connectivity.

That said, digitalisation has had a far greater impact on smaller corporates. The more information we give them digitally, the more they are able to improve their order-to-cash and procure-to-pay cycles in a very real way. For example, mobile banking is increasingly important and transformative for this segment, and we have been putting all our products and services into the phone – you can not only look at your bank balance and do payments, but also do FX, generate an invoice and collect payment through a QR code.

The other thing we are looking at is getting data and information to small businesses, similar to how the big corporates do with their treasury management systems. Through what we call business financial management, we take a client’s bank statement and reposition it to show them who their top customers are, who their top suppliers are, and what their cash flow trends look like on a monthly basis, so they can manage their business more effectively.

Our goal is to democratise innovative treasury and working capital solutions used by the largest corporates and multinationals for our middle market and SME clients. I believe we can better serve the spectrum of corporate clients, from the smallest to the largest, through the use of the latest technologies such as APIs, QRs and blockchain. In fact, we can expect digital currencies and tokenised assets leveraging distributed ledger technology to come in and make a significant impact on banking and payment services.

How are you supporting clients in the new economy?

As a regional bank in this part of the world, we have an opportunity to operate in emerging markets in a way that differs from an international bank. Every country is different, and players in the new economy are leapfrogging old ways of doing things. Areas like ride hailing, e-gaming and social commerce, with people selling on TikTok – these are all big here, because we’ve got a young, mobile-enabled population.

The new economy is also about embracing sustainability, which needs to include looking at the social element of this shift and managing that transition very carefully. For example, if people are going to drive from Singapore to Thailand in an electric vehicle, you need charging stations and interoperable cross-border payments. A lot of these things are being decided now in this new age, and it’s fascinating to be here.

We are a strong player in Southeast Asia, able to provide deep first and last mile capabilities, as well as in Greater China, particularly in the Greater Bay Area. Our twin hub strategy of Singapore and Hong Kong supports the strong business flows from Greater China out to Southeast Asia. We understand why clients are coming out, we understand the sectoral supply chains, we know how to support them within the region.

What challenges and opportunities do you expect to see in the next 12 months?

There are a few big items on the table. One is interest rates – we’re all trying to figure out where rates will go, and that has more implications for cash management than anything else. We also need to keep an eye on geopolitics in so far as it affects global supply chains.

We’re also watching small and medium sized enterprises (SMEs) and how they are progressing. SMEs are at the heart of all the markets in which we operate – and they’re also focused on digitalisation, so helping them open accounts quickly, get into digital transactions, and capture all their flows early, is really the game to play.

Other opportunities lie in our ability to help our particular set of clients move onto the regional level. While there are plenty of growth opportunities domestically, the real added value is the ASEAN-Greater China regional story for these corporates, and many of them are ready to branch out. We’ve been investing a lot in our regional platforms so that they can turn to us when they’re ready to do that.

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