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1、By Frankie Leung,Herbert Lee,Dr.Wenting Zhao Greater Bay Area SME Report:A Story of Resilience and Opportunity Financial service providers can support the regions next phase of growth,post-Covid-19Copyright 2023 Bain&Company,Inc.All rights reserved.This report is produced by Bain International,Inc.(

2、“Bain”)with information from Hang Seng Bank Limited(hereinafter referred to as“Information Provider”)and also based on secondary market research,analysis of financial information available or provided to Bain,and a range of interviews with industry participants.Any views and opinions expressed are t

3、hose of Bain as of the date of writing and are subject to change.Neither Bain nor the Information Provider has independently verified any such information provided or available to Bain and makes no representation or warranty,express or implied,that such information is accurate or complete.Projected

4、market and financial information,analyses,and conclusions contained herein are based on the information described above and on Bains judgment and should not be construed as definitive forecasts or guarantees of future performance or results.Neither Bain,the Information Provider,nor any of these enti

5、ties own subsidiaries or their respective officers,directors,shareholders,employees,or agents accept any responsibility or liability with respect to the use of or reliance on any information or analysis contained in this report.All pictures,tables,and text contents of this report are owned by or lic

6、ensed to Bain,are protected by copyright laws and various other intellectual property rights of each jurisdiction,and may not be published,transmitted,broadcast,copied,reproduced,or reprinted in whole or in part without the explicit written permission of Bain.Authors and acknowledgmentsFrankie Leung

7、 is a partner with Bain&Companys Financial Services practice in Hong Kong.You can contact him at .Herbert Lee is a partner with Bain&Companys Financial Services practice in Hong Kong.You can contact him at .Dr.Wenting Zhao is an associate partner with Bain&Companys Financial Services practice in Sha

8、nghai.You can contact her at .The authors would like to extend gratitude to all who contributed to this publication,especially Donald Lam,Nike Kong,Gilbert Lee,Wendy Ho,Fiona Zhu,and Stephen To from Hang Seng Bank and Jonathan Chan,Zhang Lei,and Zhewen Wei from Bain.Greater Bay Area SME Report:A Sto

9、ry of Resilience and Opportunity 1Hang Seng Bank|Bain&Company,Inc.At a Glance The Greater Bay Area(GBA)is poised to become a technology,innovation,and e-commerce hub for small and medium enterprises(SMEs).SMEs are optimistic about the GBAs economic potential and government policies to promote interc

10、onnectedness.SMEs need loans to meet their domestic funding needs,but they struggle with the application process.Innovations,such as using alternative data in credit assessments,can help alleviate pain points.Financial institutions can fuel the areas growth by making it easier for SMEs to buy and us

11、e cross-boundary financial products.Smoother processes,digitization,and better information flows will benefit SMEs.Financial institutions that want to expand in the GBA must define their long-term vision for the region and determine where to play and how to win.The Greater Bay Area has a strong plat

12、form for growth The Guangdong-Hong Kong-Macao Greater Bay Area(GBA)comprises the two Special Administrative Regions of Hong Kong and Macau and nine cities in Guangdong Province.As of 2021,the region has 87 million permanent residents and significant economic potential.In 2021,the regions gross domes

13、tic product(GDP)was approximately US$1.9 trillion(see Figure 1).That makes the GBA one of the worlds biggest economies,similar in size to that of Canada or South Korea.And the region is growing quickly.Over the past decade,year-over-year GDP growth has been around 7%,despite some cooling from the Co

14、vid-19 pandemic.Based on Bain&Companys analysis of forecast data,the GBAs GDP could hit US$2.8 trillion by 2027.Small and medium enterprises(SMEs)are a major driving force of economic activity in the GBA.Nine mainland cities within the GBA are home to around 2.5 million microenterprises,270,000 smal

15、l-sized enterprises,and 27,000 medium-sized enterprises.SMEs in Guangdong Province accounted for 55%of the provinces GDP in 2021.Additionally,there is a high concentration of large corporations in the GBA that benefit from a sizeable ecosystem of SMEs as partners,suppliers,and manufacturers.Large co

16、rporations,in return,provide sustainable revenue streams for SMEs and give them access to new customers,partners,and suppliers.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 2Figure 1:In 2021,the GDP of the Greater Bay Area was around$1.9 trillionNo

17、te:Exchange rate 1 USD=6.9 RMB,1 USD=7.85 HKD,1 USD=8.13 MOP Sources:Bureau of Statistics of respective cities within GBA;Euromonitor GDP of the Greater Bay Area(USD T)2.01.51.00.50.02011201220132014201520162017201820192020202166697172747678808286873%14151616171819202119214%Population(M)CAGR11217%0.

18、91.01.11.21.31.31.51.61.71.71.9GDP per capita(USD K)Over the past two years,the Guangdong,Hong Kong,and Macau governments have launched policies to promote interconnectivity within the region.These governments aim to develop the GBA into a world-class technology,innovation,and e-commerce hub by conn

19、ecting the regions talent,research-and-development infrastructure,and financial resources.For example,tax policies,settlement incentives,and rent subsidies are available to companies in key industries(such as high-tech manufacturing)to promote development and help them attract high-quality talent.In

20、 November 2022,the Qianhai Authority unveiled the Qianhai Global Service Providers program.This will provide funding and office space to attract a cluster of service providers in industries such as business logistics,information services,and finance.In Nansha,the State Council unveiled plans to esta

21、blish preferential tax policies for enterprises in encouraged industries that register in the district.And in Hong Kong,the Chief Executives 2022 policy address pushed for the development of an innovation and technology hub in the Northern Metropolis,and for building connectivity and synergies with

22、a technology cluster in Shenzhen.Policies that promote connectivity and development within the GBA will be important for businesses operating on both sides of the border.For SMEs in Hong Kong and Macau,stronger connections between the regions will provide greater access to customers and business opp

23、ortunities in mainland China.Mainland China can use the GBA to“test the waters”of a more open financial services system,leveraging Hong Kongs financial services infrastructure and experience as a global financial services hub to bring more financial services opportunities to the GBA and to China ove

24、rall.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 3Figure 2:The pandemic slightly dampened economic sentiment,but SMEs remain highly optimistic about the GBAs long-term economic potentialNote:Mainland represents nine GBA cities in Guangdong Provin

25、ceSource:Bain GBA SME Survey 2022(n=462)Short-term expectation:changes of SMEs expectations on 20212025 growth of the GBAs overall economy Percentage expecting slower growthMainlandHong Kong48%33%MainlandHong KongLong-term expectation:SMEs expectations on the GBAs overall economy,20252035Significant

26、ly slower 14%4%1%Slower 34%30%Slow growth 29%30%Similar 28%29%Stable growth(similar tohistoric)38%35%Faster 16%30%Strong growth 29%23%Significantly faster 9%8%Very strong growth 4%11%No growth/shrinkage 25%of revenue15%25%5%15%80%of mainland SMEs expect to invest more than 15%of their revenuein the

27、next yearHong Kong0%5%60%ofHong Kong SMEsexpect to investmore than 15%oftheir revenue in thenext yearInvest 25%of revenue15%25%5%15%0%5%SMEs domestic financial needs can be better served through innovation Domestic loansDemand for funding is high,but many SMEs report being underbanked.In 2021,total

28、corporate loan balances for mainland SMEs in the GBA amounted to around RMB 3.5 trillion(equivalent to US$500 billion).However,about 60%of mainland SMEs and 35%of Hong Kong SMEs still need to secure a significant amountmore than 40%of the funds they need for domestic investments and operations in th

29、e next three years.Many SMEs raised concerns about their ability to secure loans within the GBA because they lack collateral or because the documentation requirements are too high.Traditional credit assessments require SMEs to provide financial statements or management accounts or to put up signific

30、ant collateral,like real estate.Such assets and documents are not readily available to most SMEs and would take significant effort to prepare.Financial services providers can encourage cross-boundary lending and provide better service by helping SMEs navigate the requirements.Financial institutions

31、can also focus their evaluations on key data and documents that are most critical for credit assessment.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 6There is also potential for financial institutions that find alternative ways to conduct credit a

32、ssessments,secure guarantees,or offer more attractive unsecured loan products.“For SME lending in the GBA,there is potential to use alternative data,such as inventory levels or online customer feedback,to estimate demand for a companys products,”suggests Wendy Ho,head of business banking at Hang Sen

33、g Bank.Hang Seng Bank partners with QFPay HK,a mobile payments provider,to streamline the commercial lending process.The bank leverages the Hong Kong Monetary Authoritys data exchange platform,Commercial Data Interchange,to enable consented access and secured use of commercial data of merchants who

34、use QFPay.Connecting to up-to-date merchant data helps Hang Seng Bank make lending decisions.It also speeds up the loan application process and gives customers faster access to financing.Financial institutions in the region are also creating new mechanisms to provide capital and collect returns.Micr

35、o Connect,a financial market platform that launched in 2021,invests in small businesses across China and automatically collects a portion of their daily revenues.This collection method gives SMEs that struggle to secure financing from banks greater access to funding.Banks may be comfortable explorin

36、g similar models with existing customers since they have more visibility into and control over SMEs receivables.“In a model similar to receivables financing,banks can explore offering loan products that are automatically repaid based on a customers incoming transactions,”explains Stephen To,head of

37、digital and business transformation at Hang Seng Bank.Domestic wealth managementThere is also demand for other financial services products,like wealth management.However,SMEs preferences have shifted since Covid-19.The pandemic caused them to prioritize financial stability and cash flow over other f

38、actors,so now SMEs want wealth management products with more flexibility.For example,they want the ability to change or withdraw investments with low or no fees.Who is meeting this demand?Mainland SMEs largely use local Chinese financial institutions for wealth management.On the other hand,Hong Kong

39、 SMEs readily use financial institutions from different regions,including Hong Kong,mainland China,and overseas.Only a third of the mainland SMEs we surveyed have used a foreign institutions wealth management product.SMEs say that the purchase threshold is higher for foreign providers and that they

40、already have strong relationships with domestic providers(see Figure 5).Transparency,convenience,and fees also factored into the decision.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 7Figure 5:Only a third of mainland SMEs have used a foreign weal

41、th management provider,citing a high purchase threshold and strong existing relationshipsNotes:Mainland represents nine GBA cities in Guangdong Province;“foreign institution”is defined as an institution where foreign owners hold more than 50%of the institutions shareSource:Bain GBA SME Survey 2022(n

42、=462)Percentage of mainland SMEs that have usedforeign institutions for domestic wealthmanagementPercentage of respondents who have used foreigninstitutions in mainland for domestic wealth management041%39%34%29%27%27%24%1020304050%Percentage of mainland SMEs that cite items below intheir top three

43、reasons for not using a foreign providerfor wealth managementHigh purchase thresholdfor productsStrong existing relationshipwith mainland providers68%have not used a foreign institutionfor domestic wealth management32%have used a foreign institution for domesticwealth management(as partial or primar

44、y provider)Not transparent on expectedreturns,fees,and riskNot trustworthy brandMore inconvenient to tradeand maintain productsHigher fees for productsNo experience workingwith foreign institutionsWhile local financial institutions have a strong advantage in the mainland China market,foreign financi

45、al institutions still have an opportunity to distinguish themselves through superior service.Mainland SMEs would consider foreign financial institutions that provide professional and tailored wealth management advice.In contrast,the top mainland-based financial institutions already have a strong foo

46、thold and significant market share in Hong Kong.Over half of the Hong Kong SMEs we surveyed use mainland financial institutions for wealth management,citing more promising returns and competitive fees.Hong Kong SMEs that use domestic Hong Kong or non-Chinese providers cite good customer service as a

47、 primary driver.Domestic channel preferences Both mainland and Hong Kong SMEs prefer digital channels for their domestic financial services.About 55%of mainland SMEs and 60%of Hong Kong SMEs said digital was their most preferred channel(see Figure 6).Hang Seng Bank|Bain&Company,Inc.Greater Bay Area

48、SME Report:A Story of Resilience and Opportunity 8Figure 6:More than half of GBA SMEs prefer digital channels for purchasing domestic financial productsIn-person physical locations 36%100%806040200Digital 63%Hong KongNote:Mainland represents nine GBA cities in Guangdong ProvinceSource:Bain GBA SME S

49、urvey 2022(n=462)Preferred channel for purchasing domestic financial products100%806040200Digital 54%MainlandIn-person physical locations 39%Percentage of respondents selecting as their top channelPercentage of respondents selecting as their top channelCall center 6%Call center 2%Hang Seng Bank|Bain

50、&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 9Figure 7:About half of mainland SMEs and 75%of Hong Kong SMEs expect to expand across boundariesNote:Mainland represents nine GBA cities in Guangdong ProvinceSource:Bain GBA SME Survey 2022(n=462)Likelihood of SMEs to se

51、t up or further expand business across boundaries within GBAMainland SMEs expandingsouthbound to Hong KongHighly likely 15%Likely 35%Neutral 31%50%of mainland SMEs likely or highlylikely to expand to HK/MacauHong Kong SMEs expandingnorthbound to mainlandNo interest in Hong Kong 17%Highly likely 19%L

52、ikely 56%Neutral 14%No interest in Mainland 12%Unlikely 3%75%of Hong KongSMEs likely orhighly likely toexpand tomainlandDemand for GBA expansion and cross-boundary financial products is strong among SMEs Cross-boundary expansion for SMEsEven with Covid-19-related travel restrictions,demand for cross

53、-boundary expansion is high.About half of the mainland SMEs want to expand southward,while 75%of Hong Kong SMEs say theyre likely to expand within mainland GBA cities(see Figure 7).As restrictions ease,expansion plans could increase.If financial institutions can simplify their cross-boundary process

54、es,they are uniquely positioned to help SMEs expand.About 40%of SMEs say cash management and payments services are the most important financial products for cross-boundary expansion.Quick and convenient remittance is also important to customers.Financial institutions can help SMEs stay informed of t

55、he latest remittance policies and help them optimize cash management and remittance plans.Value-added services from financial institutions can also help SMEs expand.For example,more than half of the SMEs we surveyed would like financial institutions to facilitate introductions to local partners,supp

56、liers,and trade associations.They believe banks can offer more than just core financial services to accelerate cross-boundary expansion.Such services can strengthen a financial institutions value proposition and distinguish it from peers.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A

57、Story of Resilience and Opportunity 10Figure 8:Mainland SMEs are interested in receiving financial services from Hong KongNote:Numbers may not add up due to roundingSources:Bain GBA Survey 2020(n=710);Bain GBA Survey 2022(n=543)Percentage of mainland SMEs who own or are interested in 20%48%27%2022Ho

58、ng Kong wealth managementHong Kong insuranceHong Kong loans202225%11%36%202045%21%202045%23%202025%13%38%22%202235%13%Non-ownersbut haveinterest to buyin next threeyears 21%Owners ofproducts 25%Demand for cross-boundary financial products Over a third of the mainland SMEs are interested in or alread

59、y own insurance and loan products from Hong Kong,and nearly half(48%)are interested in or use wealth management services from Hong Kong(see Figure 8).Mainland SMEs say theyre attracted to Hong Kongs wealth management products because they have better liquidity,easier access to foreign exchanges,and

60、the potential to diversify risk.Based on our surveys,ownership of cross-boundary wealth products has decreased since 2020.The decrease is most likely linked to poor performance in the financial markets.Northbound interest is similar.Over a third of the Hong Kong SMEs are interested in or already own

61、 insurance,loans,and wealth management products from the mainland(see Figure 9).In Hong Kong,SMEs want cross-boundary products to satisfy business needs,like health and life insurance for employees in the mainland.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and

62、Opportunity 11Figure 9:Hong Kong SMEs want cross-boundary health and life insurance productsNote:Numbers may not add up due to roundingSources:Bain GBA Survey 2020(n=710);Bain GBA Survey 2022(n=543)Percentage of Hong Kong SMEs who own or are interested in 2022Mainland wealth managementMainland insur

63、anceMainland loans2022202020202022202011%36%24%19%17%36%18%36%18%37%29%8%29%39%9%Owners ofproducts 19%37%Non-ownersbut haveinterest to buyin next threeyears 18%Cross-boundary insuranceDemand for cross-boundary insurance is strong,but SMEs experience several pain points when buying and using cross-bo

64、undary products.SMEs say products are difficult to understand and inconvenient to purchase and use.About a third of the SMEs in both mainland China and Hong Kong say they dont consider foreign insurers because they dont understand the products.With border restrictions in place,its difficult for cust

65、omers to learn about the products in detail,as they cannot visit insurance agents in person.Instead,mainland SMEs have to rely on providers websites,where product information is too simplistic or vague to hold their interest or inform decision making.Its also hard to compare products offered by diff

66、erent institutions.Online aggregator platforms(created by providers or an independent third party)could help financial services companies clear this obstacle for SMEs.Inconvenience is another major barrier cited by SMEs on both sides(see Figure 10).Sixty-five percent of Hong Kong SMEs and nearly hal

67、f of the mainland SMEs say buying and using cross-boundary products is too cumbersome.One reason is that many processes have to occur in person,a problem that has been exacerbated by border restrictions.SMEs also say cross-boundary procurement requires significant amounts of supporting material,even

68、 if they have a long working history with the provider.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 12Figure 10:A lack of understanding about products and inconvenience are the primary barriers to cross-border insurance salesNote:Mainland represen

69、ts nine GBA cities in Guangdong ProvinceSource:Bain GBA SME Survey 2022(n=462)Reasons mainland SMEs are not interested inHong Kong insuranceReasons Hong Kong SMEs are not interested inmainland insurancePercentage of respondents who selected item as one of the reasons45%35%34%31%65%citedinconvenience

70、of buying ormanaging asa reason28%25%24%20%7%Percentage of respondents who selected item as one of the reasonsInconvenient to buy insurancewith mainland providersLess affordableDo not have understandingabout mainland insuranceDifficult to transfer moneyto mainlandPoor customer experienceof using mai

71、nland insuranceInconvenient to manageinsurance with mainland providersNo difference between HKand mainland insurance policyDoes not meet companysneedsDo not have insuranceneeds in mainland02060%40Do not have understandingabout HK insuranceInconvenient to buyinsurance with HK providersLess affordable

72、Difficult to transfer moneyto HKPoor customer experienceof using mainland insuranceInconvenient to manageinsurance with HK providersNo difference between HKand mainland insurance policyDoes not meet companysneedsDo not have insuranceneeds in HK32%31%30%29%22%22%22%17%1%46%citedinconvenienceof buying

73、 ormanaging asa reason02060%40Digitization of cross-boundary financial servicesDigital processes,like electronic signatures or application processing,can help overcome some of these obstacles.Increased digitization would release some friction from the processand address rising consumer preferences.A

74、bout half of the SMEs in mainland China and Hong Kong say they prefer to buy and manage cross-boundary financial products through a digital channel.Thats not to say financial providers can become digital-only organizations.Preference for digital and in-person channels is split nearly 50-50(see Figur

75、e 11)and digital ranks about 10 percentage points lower for foreign purchasing than it does for domestic transactions.Since cross-boundary products and processes are typically more complicated,SMEs need more support and will feel more comfortable working with a representative to handle these transac

76、tions.Physical locations and human interaction will be important tools for delivering complex services.But financial institutions will need to fully support multiple channelsand tightly interconnect themto deliver seamless,superior customer experiences.Digital transformations should create strong li

77、nks between online and offline channels and between geographically dispersed teams.“Staff in every region need to be able to share information and collaborate,subject to regulatory consent on cross-border information sharing.They should be familiar with each other and able to easily refer to one ano

78、ther to deliver a seamless experience for customers”,according to Donald Lam,head of commercial banking at Hang Seng Bank.Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 13Figure 11:Preference for digital and in-person channels is nearly evenly split

79、Note:Mainland represents nine GBA cities in Guangdong ProvinceSource:Bain GBA SME Survey 2022(n=462)Preferred channel for purchasing cross-boundary financial products100%806040200Percentage of respondents selecting as their top channelDigital 46%MainlandHome city physical locations 25%Cross-boundary

80、 physical locations 29%100%806040200Percentage of respondents selecting as their top channelHome city physical locations 41%Digital 49%Hong KongCross-boundary physical locations 10%Technologies like blockchain can support cross-boundary endeavors.For trade finance,Hong Kong SMEs already use eTradeCo

81、nnect,a blockchain-based platform initiated by the Hong Kong Monetary Authority and several major banks.Connectivity between eTradeConnect and the Chinese Central Banks Trade Finance Blockchain Platform makes cross-boundary trade financing more streamlined,secure,and cost-efficient for SMEs.Opportun

82、ities for financial institutions to expand in the GBA The GBA has excellent development opportunities,backed by solid infrastructure and strong regulatory support.Once borders reopen,SMEs have high expectationsand potentialfor long-term economic growth.Financial services providers can step in and so

83、lve unmet financial services needs to accelerate their progress.While theres no one-size-fits-all approach,financial institutions that want to grow their business across boundaries in the GBA must answer three questions(see Figure 12).They must determine:Whats their long-term vision for the GBA?Wher

84、e should they play?How can they win?First,financial institutions need to clearly define how the GBA will factor into their future portfolios.Cross-boundary plans can be niche by design,or financial institutions can enter into full-scale competition against domestic providers.For example,GBA banks wi

85、th existing international networks could start by building financial connectivity between China and the rest of the world,especially Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportunity 14through supply chain or accounts receivables financing.Then they ca

86、n consider whether to invest in the region further.They could expand their value proposition to include more products or widen their distribution network to serve domestic needs across boundaries.Then,financial institutions should determine where to play,evaluating industries in the GBA based on the

87、ir potential financial services needsand the institutions ability to serve them.For example,the technology industry is an attractive potential target.Based on our survey,short-term optimism is higher among technology firms than for SMEs overall.And the government is providing significant tailwind vi

88、a investment funding and supportive human capital policies.Pain points are different in every industry though,so financial institutions need to do their homework.They need to understand their target industrys unique challenges and preferences to build attractive offerings and win business.For exampl

89、e,technology SMEs often need loan products with low collateral requirements and longer repayment schedules.Technology SMEs told us they have more funding needs during development but struggle to secure loans because they lack collateral assets at that stage.They also say it takes a long time to comm

90、ercialize innovations,so they prefer longer loan repayment schedules.Figure 12:Financial institutions that want to grow across boundaries in the GBA must answer three questionsSource:Bain&CompanyDefine how the GBA fits into your portfolioWhat is thelong-term visionfor the GBA?Which industries should

91、 you prioritize?Where shouldyou play?Would you focus on cross-boundary services or“localize”and serve domestic needs?For example,international banks may initially usethe GBA to build financial connectivity betweenChina and the rest of the world.But in the longterm,they might develop a complete propo

92、sition to serve domestic needs.Where are there strong financial needs,and can you build a competitive advantage?For example,financial institutionsmay prioritize the technology industryfor its strong short-term growth optimism and to capitalize on momentum from government support.What are key success

93、 factors to win?How canyou win?For example,how can financial institutions best serve technology SMEs?Develop industry-tailored products Financing at early stages of R&D;repayment schedule matching commercialization plan Building the right capabilitiesHiring talent with technology expertise to better

94、 assess potential for technology and commercialization Deliver digital experiencesDeliver services when and where customers want;ensure all processes can be done digitallyHang Seng Bank|Bain&Company,Inc.Financial institutions that want to serve technology companies need deep technical knowledge to p

95、roperly issue credit assessments.Direct knowledge and experience in the industry is necessary to understand how products are being developed,their potential for commercialization,and any associated risk.Without these skills,financial institutions wont be able to tailor products or satisfy the financ

96、ial institutions risk controls.Technology companies also have a strong preference for digitally enabled purchasing and servicing.“Comprehensive digital services”is a top-five purchasing criteria for 41%of Hong Kong technology SMEs but only 26%of SMEs in other industries.To compete for business in th

97、e technology industry,financial institutions must deliver end-to-end digital experiences.To serve technology companies,financial institutions need to develop industry-tailored products,expand their technical knowledge,and enable digital processes.Thats how they will win.Regardless of the industry th

98、ey pursue,financial institutions must develop a nuanced understanding of foreign consumers.Teams from both regions will need to work well together and develop a close collaboration model.To bridge any differences,financial institutions need to study the local culture.They can host regular meetings w

99、here colleagues share insights about customers in the region.Or they can facilitate worker exchange programs in which colleagues spend time in cross-boundary assignments.Customer needs and expectations are nuanced,so institutions need to study the market carefully.A foreign approach wont win local b

100、usiness.By giving voices from both sides equal opportunity to share their experiences,financial institutions can learn how to adapt products,services,terms,or channels to attract cross-border customers.Opportunity awaits About half of the mainland SMEs say theyre likely to expand into Hong Kong or M

101、acau,and nearly 75%of Hong Kong SMEs expect to expand into mainland China.SMEs are ready to grow when borders reopenbut they need help.They believe financial services providers are best positioned to answer the call.To expand,SMEs say they need convenient lending,professional wealth management servi

102、ces,flexible insurance policies,and comprehensive cash and liquidity management.SMEs make,support,and deliver the products and services that will transform the GBA into a global technology,innovation,and e-commerce hub.Improved cross-boundary financial services will allow everyoneSMEs,large corporat

103、ions,and unicornsto move faster and at a larger scale.The GBA presents an enormous opportunity for financial services providers that can innovate beyond traditional services.In the GBA,SMEs have substantial,underserved financial services needs(and likely more that are still unrecognized).By serving

104、the GBA as it grows,financial services providers can reach untapped segments and create a gateway strategy for more open financial systems.Greater Bay Area SME Report:A Story of Resilience and Opportunity 15Hang Seng Bank|Bain&Company,Inc.Greater Bay Area SME Report:A Story of Resilience and Opportu

105、nity 16MethodologyThis report examines economic sentiment in the Greater Bay Area(GBA)of China,according to small and medium enterprises(SMEs).Our definition of“micro-,”“small-,”and“medium-sized”enterprises is aligned with the definition used by the National Bureau of Statistics.To research sentimen

106、t,we surveyed leaders from more than 460 SMEs in the GBA about the regions economic potential.We also conducted focus groups with a dozen SMEs:six each from Hong Kong and mainland China.Our conversations focused on SMEs financial services needs,attitudes,and preferences related to cross-boundary fin

107、ancial products.Our surveys and discussions included a range of industries:wholesale and retail trade,manufacturing,logistics and transport,technology and software,and others.In terms of annual revenue,the organizations ranged from RMB or HKD 3 million to 300 million annually.We conducted similar re

108、search in November 2020.By reissuing the survey now,we also learned how the regions financial needs have evolved.The findings and recommendations in this report were informed by Bain&Companys analysis of the results,plus industry expertise from Bain&Company and Hang Seng Bank.Population statistics w

109、ere pulled from the Seventh National Population Census of the Peoples Republic of China(i.e.,the 2020 Chinese Census).Our 2021 report on the GBA used figures extrapolated based on the most recent census at that time,which was the Sixth National Population Census,conducted in 2010.Hang Seng BankFound

110、ed in 1933,Hang Seng Bank has continually innovated to provide best-in-class,customer-centric banking,investment,and wealth management services for individuals and businesses.With strong digital capabilities and a vast network of around 270 service outlets in Hong Kong,Hang Seng offers a seamless om

111、nichannel experience for customers to take care of their banking and financial needs.Its wholly owned subsidiary,Hang Seng Bank(China)Limited,operates a strategic network of outlets in almost 20 major cities in mainland China to serve a growing base of local customers and those with cross-boundary b

112、anking needs.For information,please visit Bold ideas.Bold teams.Extraordinary results.Bain&Company is a global consultancy that helps the worlds most ambitious change makers define the future.Across 64 offices in 39 countries,we work alongside our clients as one team with a shared ambition to achiev

113、e extraordinary results,outperform the competition,and redefine industries.We comple-ment our tailored,integrated expertise with a vibrant ecosystem of digital innovators to deliver bet-ter,faster,and more enduring outcomes.Our 10-year commitment to invest more than US$1 billion in pro bono services

114、 brings our talent,expertise,and insight to organizations tackling todays urgent challenges in education,racial equity,social justice,economic development,and the environment.Since our founding in 1973,we have measured our success by the success of our clients,and we proudly maintain the highest level of client advocacy in the industry.For more information,visit In collaboration with