High transaction fees and poor customer service from business banks frustrate entrepreneurs
February 20, 2012 by Terence LEE
What cheeses off entrepreneurs the most about business banks in Singapore? To find out, we did an informal poll on Facebook and got some answers: a huge chunk highlighted cost transaction fees as a bugbear, while poor service attitude and slow response times received a lot of enthusiastic nods.
We got a hint of these concerns from another group of entrepreneurs we surveyed a while ago. Many of them have been held back by long waiting times and queries that went buried. My own experience with UOB wasn’t ecstasy either. I attempted to contact them an entire Friday afternoon, and they virtually ignored me.
For overworked entrepreneurs who don’t have a lot of time to waste, such service standards are unacceptable. So I spoke to a few more entrepreneurs to find out what they have to say. Their responses below.
Nicky Szmala, co-founder and managing director of Acheevit, a gamified online platform for salespeople. Uses Standard Chartered Bank.
I do had some questions on my token (it seemed to be broken) and international bank transfers (to pay a developer abroad). I didn’t received any helpful answer on what is wrong with my token. The main response from the bank clerk was that he is not trained with business customers. That was quite surprising as I believe that they use the same kind of token for all their bank accounts. I asked for someone who knows about their business products but he refused and told me that this branch doesn’t have anyone trained.
Then for every question I asked the bank clerk needed to check back with someone in their back office. He literally disappeared for 10min before coming back. After 45 minutes I asked one of his colleagues for a glass of water. It took them another ten minutes to bring it over (after I reminded them).
What I felt most annoying was that there were enough staff in that ION Orchard branch. But most of them were more involved in private talks and trying to look good.
I’ve also dealt with their business customer hotline to help with the token. It took three different call agents to solve my problem. All in all that process took more than a couple of days.
Luke Bower, owner and director of Xpander Group, a boutique consultancy and distribution firm. Uses OCBC Bank.
Charging S$20 for a second net banking token is quite interesting. Ideally two should be given, and any additional should be charged. Most organizations will have a Director (or multiple directors), an accounts person, or a CFO.
OCBC Bank’s GIRO is S$0.10 per transaction which seems quite minimal, but the nature of our business may require for us to complete huge amounts of these transactions. The fee doubles in the second year of account being open. Given the processing time for GIRO, I don’t really know how they can justify any cost for it, but realistically they either need to improve the processing times or half the fee.
Also, an OCBC foreign currency account requires a minimal balance of US$10.7k to open, which is not an issue for us but I would imagine it would be for a lot of start ups. The S$25 monthly balance fee for the entrepreneur account if a balance falls below S$8,000 is also too much. Again, that’s not an issue for us, but the account is called the “Business Entrepreneur Account“. Many startups, entrepreneurs, small business, and so on may find this difficult.
My concern with the banks come down to the lack of flexibility in the product offerings and how the bank’s customer service reps fail to understand the actions we require to be completed. Maybe it’s unreasonable to expect customer service reps to be that commercially savvy, but some consistency in the messaging should be achievable.
For example, trying to put in place a ‘standing instruction’ (or standing order) to move funds from trading accounts to holding accounts on set dates. Or when doing transactions in foreign currency.
If it’s a more complex matter and not a standard request, it can be quite a battle. Our business, as many are, is very dynamic and fluid. Often our requirements don’t match the operator’s script. When this is the case unfortunately they just get lost and confused. Outright denials are even possible.
The cause of this is not having a single point of contact, and the luxury of relationship banking, which fortunately we have access to. However many, maybe the majority, of startups won’t.
It can be a real frustration and can ultimately be the cause of lots of wasted time –not to mention the possible negative commercial consequences. We all know how critical smooth cash management is for startups. Small mistakes have the ability to cripple a startup’s or small business’ operations, even if it’s a short period of “down time”.
The internet banking interface is honestly the worse I have ever used, it seems firmly stuck in the 1990′s, really needs a major redesign. There seems to be a very poor level of consistency in the information provided also. For example, I called customer service twice, and went to a branch once, and asked the same question on each occasion. I amazingly received three different answers.
Laurent Thevenet, co-founder of RightBrain, an interactive agency. Uses OCBC.
As a startup you go through up and downs. I remembered us going below zero at some point during very bad times. If you don’t react in the day fees become exorbitant very quickly. Not sure about the rates but it seems to me that everything that applies to corporate banking (versus personal banking) is far more expensive when dealing with the same issues.
We opened our bank account in 2008 and got two NETS cards which are quite useless when it comes to online business at that time (how to pay for hosting, hardware or anything you would buy online). We got offered to switch to a VISA/Mastercard last year only (I guess it applies by default now to all accounts).
We faced real problems with cheques and signatures, even after changing our signatures once. Cheques bounced many times because of signatures not being recognized. My partner and I both can sign cheques and both signatures have issues.
We used cheques because that’s what the provider or whoever we had to pay wanted. We prefer online transaction of course. But when your cheque bounces because of a signature, the person being payed doesn’t always know the reason, making you lose credibility.
I do like certain aspects of the bank though. It’s easy to transact money everywhere at anytime, the quality of service at the counter is good, it was easy to open a corporate bank account when we started (a simple meeting at burger king!), and I find the OCBC iPhone app a must.
I really think that a corporate banking account targeting Internet startups would make sense. Not all startups have all the time $10k in bank when they start. There are too much differences in cost with offline businesses for the same rules to apply.
David Moskowitz, founder of Membership Academy, which teaches people how to create membership sites. DBS Bank.
I needed a bank to establish a bond when I got my entrepreneurship pass in 2009. OCBC Bank could do it, but they requested a minimum S$5,000 certificate of deposit to guarantee the bond against. But they later told me that they’ve changed the fee structure, charging a higher bond amount. In the end, I went to DBS.
Kel Zhang, founder of Roadhop, which provides quick search information on how to get from place to place by road, rail or ferry. Uses UOB.
I manage my accounts by downloading the Excel CSV from my bank statement. A few months ago, I needed to submit some bank statement copies to SPRING Singapore. But I lost some of them and I proceeded to print out the Excel version and get them certified by the bank to prove its accuracy.
They completely refused to do it. Instead, they charged me S$30 to replace each bank statement and that’s ridiculous!
I even got my laptop to show them the Excel files are really from the bank, but they just refused to certify for me. Why is a bank statement so expensive anyway? Seriously, we’re letting them earn interest and we didn’t loan any money (or have any credit card) with them. Our money is sitting in the bank for them to lend out, and they still do this.
They even charge S$25 per month for an account balance under S$8000.
Oh, not to mention, because they don’t issue debit card, for my online purchases I’ve to purchase using my personal debit card and claim. I didn’t apply for their Platinum Business Card because the application process is quite intrusive, and requires a Guarantor also to declare their assets.
Jackie Lee, founder, chairman, and CEO of ClickTRUE, an online consulting firm.
I find the fees to do an international telegraphic transfer too high. I rather not name the bank as their service after feedback has very much improved. It cost me S$140 to transfer about RM200,000 (US$66,000). I think for something as administrative as this it should about about S$25-30. I can treat five clients to a good lunch international buffet in a hotel with S$140.
I guess one advice I would share is that even though we are seen as customers of the bank, we should also do our part in developing a good relationship and understanding with the commercial banks we use. We have organized meetup sessions with our bankers to explain our business and the banking services we need. They took the time to share with us their processes. In this way, both sides can better understand how to work better together. Don’t take it for granted to be served like a King.
Find out more about SGE’s research arm: SGE Insights, providing customized in-depth research reports to help you navigate the business of technology in Asia.
About The Author
Terence LEE - Editor
Terence writes mainly about technology trends and startups in Asia. He believes in crafting smart content: Not just a regurgitation of text, but well thought-out pieces that serve the reader using a combination of data, design, narratives, analysis, and visual impact. His articles have been published on Venturebeat, Yahoo!, Straits Times, Today, and The Online Citizen. He also co-founded NewNation.sg, a satirical news site covering Singapore affairs. Engage him on LinkedIn and Twitter.Read other posts by Terence LEE