3 good reasons why your F&B business needs to go digital
Singapore has seen a dramatic increase in the adoption of digital banking solutions since 2020. Learn how digital solutions can provide F&B businesses with a competitive edge in the ever-changing business landscape.
The last two years have seen major disruptions to Singapore’s food and beverage (F&B) industry. Many businesses have struggled to keep their heads above water, trying to stay profitable amidst reduced customer footfall and persistent manpower issues.
Even as pandemic-related restrictions have relaxed, other challenges have cropped up in their place. Take rising food costs: food inflation in Singapore registered a 4.1% year-on-year increase in April 2022, higher than the 3.3% increase in core inflation. With about 220,000 workers making up the F&B sector in Singapore, that’s certainly a lot of pain being spread around!
Digital solutions have provided many F&B businesses with a competitive edge in this challenging time; contactless ordering and payment methods, as well as “cloud kitchens” or delivery-only operations, have helped many entrepreneurs stay afloat even as Heightened Alert status slowed down footfalls.
Smaller businesses, however, have been reluctant to digitalise, due to perceived lack of necessity or technical know-how. Startups and SMEs in particular may be cash-strapped or have difficulty determining the right digital solutions that fit their needs and budget.
But whether big or small, F&B businesses need to start going digital in order to survive in today’s economy. Digibanking is an easy, but effective, first step in that direction. For F&B entrepreneurs migrating from traditional banking methods, digibanking can help to improve efficiency, cut costs and tap into new markets.
Why F&B businesses need digibanking
Singapore has seen a dramatic increase in the adoption of digital banking solutions since 2020. On top of the pandemic-driven push for businesses to go digital, there are several other factors that have contributed to this trend in recent years.
Firstly, the proliferation of mobile devices and apps has made it easier for businesses to develop and implement digital solutions. Secondly, the Singapore government has been supportive of businesses digitalising their operations, with initiatives such
Lastly, customers have also become more comfortable with using digital platforms for day-to-day transactions, such as using mobile apps to order food and make payments.
Today, digitalisation is no longer a nice-to-have, but a critical tool for businesses to remain competitive. Here are some more specific outcomes that digibanking can help F&B businesses achieve:
Streamlined operations: Digibanking holds out the promise of a single digital platform on which an entrepreneur can call up vital information, seek advice, or even borrow funds—with much-reduced time and effort to go with it. With digibanking solutions, businesses can manage their inventory, orders and payments more easily and efficiently. This is especially important for businesses that are now relying heavily on delivery or takeaway operations.
Improved cash flow: Even before the pandemic, reduced profit margins and escalating operational costs were common F&B industry dilemmas. Digibanking allows entrepreneurs to apply for loans within a self-serve digital platform—they can get working capital for their business without ever leaving their office. DBS IDEAL’s digibanking service, for instance, offers access to digital loan applications, comprehensive loan enquiry and other lending services.
Greater transparency: Non-digitalised F&B outlets lack visibility on their business cash flow—making it almost impossible to control operating expenses. Digibanking services can help solve this problem: they can capture your financial data in granular detail, and provide insights on your business’ financial performance, and help you map a roadmap to growth. For example, you can compare your sales of a certain product by the day of the week—and use this information to optimise your inventory management.
Features to look for in a digibanking solution
When looking for a digibanking solution, businesses should keep their specific needs and objectives in mind. Once it’s in place, the solution should also be easy to use and implement, so that businesses can focus on running their operations instead of worrying about the technology.
If you are a business owner looking for a digibanking solution, here are some examples of features and applications that you might want to consider:
Easy onboarding: The solution should be easy to set up and use, from sign-up to activation. This is especially important for businesses that are not familiar with digital banking solutions. Digibanking platforms like DBS offer business owners pre-loaded essentials, such as a debit card, SGQR, PayNow, and admin functions.
Cash management: This includes features such as real-time cash flow monitoring, automated reconciliations, and fraud detection. For startups and SMEs, cash management tools can help them to better manage their finances, and avoid the need to take on expensive bank loans.
Customisability: A fine-dining establishment will have very different needs from a cloud kitchen. F&B businesses should therefore look for a digibanking solution that can be adapted to their specific needs. This way, businesses can make sure that they are using the features that are most relevant to them, and that they can easily add or remove features as their needs change.
Security: About two in five Singapore-based SMEs have suffered a cyber incident in the past year. Any digibanking solution your business signs up for should be able to demonstrate high levels of cyber security. Look for a solution that offers features such as fraud detection and prevention, data encryption, and user authentication.
Payroll features: Look for a digibanking solution that offers payroll features such as salary payments, leave management, and employee self-service.
Loan services: Growing businesses will need the option to access loan services from their digibanking solution. This can help businesses quickly access the funds they need to expand their operations or invest in new equipment. Digital loan acceptance can also help businesses streamline their loan application and approval process.
Reporting and analytics: Businesses can use their digital platform to collect and make sense of their financial data: they can track their performance, identify areas of improvement, and make data-driven decisions.
Easy integration: It's important to have a digibanking solution that can be easily
integrated with other systems, such as DBS RAPID’s APIs that seamlessly integrate with a wide variety of accounting software and customer relationship management (CRM) systems. This way, businesses can embed key banking services directly into their workflows and platforms to significantly improve employee and customer experiences, for competitive advantage.
Conclusion: the competitive edge you need
Many challenges still lie ahead of the F&B industry in the near future; to survive in one of the most competitive industries in Singapore, businesses need to find ways to stand out from the crowd.
But given the rising operational costs and falling margins inherent in the F&B sector, many entrepreneurs are understandably reluctant to invest in digital solutions. The perception of high cost of adoption, the lack of digital talent, and a lack of confidence on where to begin– these all get in the way of F&B businesses onboarding the digital solutions they need to survive.
 Channel News Asia, Singapore's April core inflation rises to 3.3%, fastest in more than 10 years, May 2022
 Enterprise Singapore, Food Services: Industry Profile , Retrieved July 2022
 Singapore Business Review, Singapore's F&B industry banks on digitalisation to survive circuit breaker, August 2021
 Channel News Asia, On top of changing COVID-19 rules, F&B businesses now worry about rising costs, November 2021
 TechWireAsia, How prepared are Singaporean SMEs to deal with cyber attacks?, September 2021