Digital Banking in Singapore | Future of Digital Banking

Bank Accounts
by Priyadarshini 30 January 2023

This year will see the launch of Singapore’s first digital banks. What can customers expect, and how will this affect Singapore’s digital banking landscape?
The Monetary Authority of Singapore (MAS) awarded digital bank licenses to four contenders in December 2020: a Grab-Singtel consortium and tech giant Sea each received a digital full bank (DFB) license, and Ant Group and a consortium led by real estate developer Greenland Financial Holdings received digital wholesale bank (DWB) licenses. In this blog, we discuss, digital banking in Singapore

Fast forward to this year, and the four digital banks are scheduled to go live. What does this mean for Singapore’s digital banking future? Learn more about Singapore’s four digital banks and what to expect as we share additional information.

What do Singapore’s four digital banks have to offer?

Digital banks provide the same banking services as traditional banks, with the key distinction being that they are delivered online rather than at a physical branch. Singapore’s digital banks likewise aim to provide innovative and personalized financial services made possible by the use of technology and data.

Imagine opening an account, investing, or applying for and receiving loan approval all on your smartphone in a couple of minutes. With cheaper overheads, digital banks can afford to provide competitive interest rates on financial products.

Digital Banking in Singapore

The Sea Group (DFB)

Sea, the parent firm of e-commerce platform Shopee, also controls game developer Garena and its fintech subsidiary, SeaMoney. It has launched many payment alternatives through SeaMoney, including AirPay, ShopeePay, and the recently announced Buy Now Pay Later (BNPL) service SPayLater.

It is expected that, like Grab and Singtel, it will exploit its existing user base by adding financial services aimed at buyers and sellers on the Shopee platform.

Singtel and Grab (DFB)

Singaporeans are familiar with the names Grab and Singtel. Both are widely regarded as industry leaders and have delved into financial services with the likes of mobile wallets GrabPay and Singtel Dash, insurance savings plan Dash EasyEarn, and GrabInvest.

What happens next? Keep an eye out for GXS Bank, a joint venture between Grab and Singtel. With its large existing client base and established network of partnerships, this digital bank can be expected to develop new financial solutions that use its existing ecosystem. To begin, GXS Bank intends to target underrepresented segments such as gig economy employees and smaller enterprises.

Ant Group(DWB)

Ant Group, arguably one of the world’s largest fintech organizations, is best known for its payment system Alipay. Unlike digital banks with DFB licenses, Ant Group will seek to service Singapore’s Micro, Small, and Medium Enterprises (MSME), most likely beginning with those who currently use Alipay or have business relations with China.

Greenland collaboration (DWB)

The consortium is led by Greenland Financial Holdings, a subsidiary of Chinese real estate developer Greenland Group, and comprises blockchain-based supply chain financing platform Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management. While little is known about the consortium’s ambitions, MSMEs in Singapore should anticipate digital banks with DWB licenses to provide greater flexibility in terms of funding and credit lines.

The Future of Digital Banking

Because of their emphasis on technology and data, digital banks are more likely to introduce financial solutions that are significantly different from what incumbent banks are used to providing. Financial inclusion, shared ecosystems, and increased personalization are just a few of the benefits Singaporeans may expect.

Personalized and distinct experience

Digital banks are better positioned to give consumers tailored solutions based on their history by using massive volumes of customer data across the ecosystem. Newer, more efficient technologies also provide a better customer experience, with simple sign-ups, faster turnarounds, and superior support.

Enhanced financial inclusion

Digital banks can implement new credit rating techniques with the help of technology and AI. This allows underbanked segments, such as freelancers and small company owners, to obtain more access to finances and credit.

The emergence of the ecosystem

According to PwC’s digital banking customer survey, 66% of Singaporeans expect digital banks to provide more than simply financial services. Consider super-apps that combine financial and non-financial services such as e-commerce or health, wellness, and travel on a single platform.

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banking services
digital banking
online banking
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