SINGAPORE: In 2022, Mr Christopher How put his name down on a waiting list for a savings account offered by a new digital bank in town.
Curious about the new offering – formed in an unlikely partnership between ride-hailing giant Grab and telco Singtel – Mr How was intrigued by GXS bank.
He was impressed when he finally got hold of an account – the app had a sleek interface, was more user-friendly than other banking apps and offered competitive interest rates.
But what stood out for the 42-year-old was a “savings pockets” feature that allowed users to squirrel away cash for specific purposes.
“In the old days, you will create multiple bank accounts to divide up your money. If you don’t, you will have to intentionally remember how much you are saving for a specific purpose,” he said. “With this, I could segregate my money intentionally within the same account.”
He found the feature “incredibly useful” and now uses GXS as his primary savings account.
Mr How also uses a bank card from Trust Bank – a digital lender backed by Standard Chartered and FairPrice Group.
This is now his go-to card for groceries and increasingly, overseas spending. Besides offering favourable exchange rates, it has the added convenience of being able to switch between a debit card and credit card via the app.
“There were not a lot of choices for consumers until the digital banks came along,” said Mr How who works as a financial adviser. “More can be done, but competition has been good so far.”
But Mr How may be the exception, rather than the norm.
When the Monetary Authority of Singapore (MAS) handed out digital banking licences in end-2020, it allowed non-bank entities to operate banks in Singapore.
The premise for digital banks is that with operations carried out entirely online, they can run on a low-cost model and pass on some of those savings to customers. Without the constraints of legacy systems, they are in a better position to innovate rapidly.
Singapore now has five digital banks. Three of them – GXS, Trust Bank and MariBank, which is owned by e-commerce group Sea – serve retail customers.
Since their launch, the digital banks have positioned themselves as more “transparent” and “fuss-free” than traditional banks, with high interest rate savings accounts that do not come with various qualifying criteria and cards offering lower fees and more rewards.
They have also begun dipping their toes into other offerings, such as personal loans, insurance and investments, to win over customers from traditional banks.
Three digital banks in Singapore serve retail customers – Trust Bank, backed by Standard Chartered and FairPrice Group; GXS, a joint venture of Grab and Singtel; and MariBank, owned by e-commerce group Sea. (Photos: Trust Bank, GXS, MariBank)
However, the disruptors do not have it easy given Singapore’s small market and an even smaller population that does not already have a bank account – less than 2 per cent of adult residents.
With the incumbent banks also improving their digital offerings, industry observers said digital banks in Singapore will have to do more to attract and retain customers like Mr How.
“Digital banks, with their lower costs and minimal overheads, are well-positioned to offer financial benefits sustainably in the short to medium term at least,” said Mr Amit Chopra, head of banking and payments for Asia-Pacific at payments technology firm FIS.
“However, building trust and loyalty through innovative products is key for retention, and a focus on personalised services and ease of access is essential for differentiation and success in the competitive Singapore market.”
So far, the three digital banks serving retail customers have yet to turn profitable – a stark contrast to the record profits that the traditional banks have seen in recent years.
Based on the latest annual earnings reports, all three banks remain in the red for the financial year of 2023 as growing costs offset increases in revenue.
“Their cost base is definitely lower with the lack of legacy platforms and the branch networks, but the problem is a lack of scale,” said Mr Avishek Nandy, head of financial services practice at consultancy Bain.
Continued customer acquisition in the form of promotional interest rates and other incentives also likely remained a key driver of costs.
For 2023, losses at both GXS and MariBank saw double-digit percentage increases, hitting S$152.1 million and S$52.2 million respectively. Trust Bank raked in losses of S$128.4 million, up 3 per cent from a year before.
That said, all three players saw improvements in their net interest income, a key financial metric for banks that reflects the difference between interest revenues and interest expenses.
GXS and Trust Bank saw net interest income increase by multiple folds, while MariBank reversed a deficit to clock in positive net interest income.
The key to winning the competition lies in deposits, a key source of bank earnings because they provide funds that banks can use to make loans and generate interest income, analysts said.
So far, Trust Bank has a head start, given its ability to tap into the strong ecosystem of FairPrice Group. It also holds a full bank licence, which has allowed it to function like a traditional lender.
GXS and MariBank were subject to a S$50 million regulatory cap on retail deposits, imposed by the MAS during the lenders’ first two years of operations to safeguard consumers’ interests. MariBank also began rolling out its offerings in 2023, nearly a year later than its rivals.
Based on its 2023 financial statement, Trust Bank’s customer deposits stood at S$1.8 billion. That surged to S$3 billion for the first half of 2024, with customer numbers hitting 806,000, the bank said in an update last August.
Trust Bank CEO Dwaipayan Sadhu told CNA that it would provide an update soon on its progress to “become Singapore’s fourth largest retail bank by customer numbers”.
“We’re making good financial progress,” he added.
Maribank has attracted S$503.8 million in customer deposits as of end-2023, while GXS has S$436.8 million, according to the annual statements.
GXS told CNA that its deposits have grown 48 per cent year-on-year as of end-September 2024.
But it’s not just about convincing customers to sign up - these digital banks have to keep them active on their platforms.
This means either using the product they have signed up for or trying other products.
They include cards, personal loans, insurance as well as investment and wealth management products, although each of them presents their own set of challenges.
For instance, revenue margins for credit cards have come down drastically, said Mr Nandy.
Insurance and investments are lucrative businesses that can help attract deposits and shore up fee income, but they are “emotional products that people would buy after there’s trust in a brand”, he added.
“It takes time to build up a brand and trust,” said Mr Nandy. “You have to play the long game.”
Agreeing, Mr Chopra said: “On the investment front, with the younger generation being more savvy when it comes to their investments, offering investment products can be a great move, but this needs to start with first building trust and loyalty with its customers to compete with the likes of robo-advisers.”
It is still early days for Singapore’s digital banks, said analysts, with profitability likely to happen a few more years down the road given the challenges in a mature market like Singapore’s.
A man uses a digital banking app on his mobile phone in Singapore.
A recent survey by FIS suggested that incumbent banks in Singapore continue to enjoy strong customer loyalty.
Nearly half of those surveyed cited satisfaction with their current bank as a reason why they are hesitant to try digital banks, according to the survey findings released last November.
Another 36 per cent pointed to the lack of physical branches, while 34 per cent were concerned about the lack of in-person interactions with bank representatives.
For those open to digital banks, 45 per cent were drawn to higher interest rates. Sign-up bonuses were the appeal for 37 per cent of those surveyed, while 34 per cent pointed to the lure of a strong rewards programme.
For existing digital bank users, convenience, ease of use and security were the main perks.
“This suggests that while financial incentives are important to attract users, functionality and user experience are key retention factors,” FIS said.
People who spoke to CNA said the lack of profitability has not affected their interest in digital banks.
Digital banks in Singapore are covered by the Singapore Deposit Insurance Corporation’s (SDIC) Deposit Insurance Scheme, which insures depositors up to S$100,000 in the event of a bank failure.
Ms Amanda Lim cited this as a reason that she might move to digital banks, but she said she remains on the lookout for a “better reason” to move more money.
The 35-year-old currently has credit cards from both Trust Bank and MariBank to earn rebates for grocery shopping at NTUC FairPrice and cashback from purchases on Shopee respectively.
But she also has cards for other bills, while the bulk of her savings are stashed in another bank account.
“There are many accounts now that offer competitive interest rates, I don’t see the need to move my money around for just a few dollars more,” said the mother of one.
She has not used other digital bank offerings, such as personal loans, as they do not suit her needs.
For Mr How, insurance and investment products via a digital bank will only appeal to him if they are cheaper than what’s available on other investment platforms.
“At the end of the day, consumers should always be aware of the cost they are paying … and should not sign up for something just for bonus interest rates, because that might just be the fees that you are paying,” he said.
Beyond that, he is looking for a platform that can give him a “better experience beyond just banking”.
This means a platform that can potentially track his daily expenses, or tell him how to better use its payment system for rewards based on his spending patterns.
“It's not necessarily a digital versus traditional thing. It's more of which financial service institution is offering us the best way to keep track of our expenses and how we can make better financial decisions,” he added.
What would add to the appeal of digital banks is the ability to make GIRO payments, said Mr How who still holds on to an OCBC savings account for such payments.
“If digital banks can handle GIRO payments, I would totally close my OCBC account because there's no point in having more than one savings account now.”
Bain’s Mr Nandy said digital banks already have a wealth of data – the crux lies in how they can use this to glean insights and better serve their customers.
“(The banks now) are focused on putting out products on their shelves but how should a customer think about this product versus another? It should be an integrated approach – you bring a product to the customer and you wrap it with advice.
“I think that would make a huge difference in terms of the engagement and how you shape people's habits,” he said.
In this aspect, artificial intelligence may be able to help digital banks create solutions for individuals based on their saving, spending and investing habits, he added.
Likewise, in a move to inject innovation and competition into the industry, the Hong Kong Monetary Authority began issuing virtual bank licences in 2019.
There are now eight digital banks in Hong Kong but with more than 150 licensed banks already in operation, competition is stiff.
Hong Kong is a market with many similarities to Singapore.
“Both Hong Kong and Singapore do not have an unbanked or underbanked problem. So, the proposition of a digital bank becomes how do you create a better digital experience than say HSBC in Hong Kong and DBS in Singapore?” said Mr Benjamin Quinlan, CEO and managing partner of Quinlan & Associates.
So far, the six retail-focused banks in Hong Kong have savings, time deposits, as well as payment services like cards, personal loans and buy now pay later.
Key challenges include slowing customer growth and declining deposits, with many accounts being dormant or having zero balance, according to a report by Hong Kong-based strategy consulting firm Quinlan & Associates.
But one bank has done the seemingly impossible – ZA Bank reported its first monthly net profit in July last year, becoming the first digital bank in Hong Kong to do so.
The profit, which came after nearly four years in operation, was aided by growing deposits and fee income from its newly launched mutual fund and US stock trading business.
A joint venture between a unit of ZhongAn Online P&C Insurance and Sinolink Group, ZA Bank is currently the biggest digital bank in Hong Kong with over 800,000 users. In comparison, the second-biggest digital bank, Mox, has about 620,000 users.
Speed has been ZA Bank’s biggest competitive edge, said Mr Quinlan.
On its first day of launch in 2020, it rolled out a savings product and loan product. Within two years, the digital bank added other offerings such as cards with no annual fees, investment funds, insurance and international transfers, often being the first to do so.
“At the end of the day, people want the ability to seamlessly move money from a deposit to a trading or investment account. To that end, the activation rate of the customers on ZA was higher than its digital bank peers, given that the bank got its product shelf up and running much faster than every other bank,” said Mr Quinlan.
“Having much more mature functionality was very important in driving ZA’s revenue growth at an accelerated pace vis-à-vis the other digital banks, which were slower to roll out their products.”
The mobile app of Hong Kong's ZA Bank comes with intuitive designs, such as swipe up or down functions for deposits or transfers. (Screenshot: ZA Bank)
Gamification is another strategy used by ZA Bank to draw customers’ attention. Its app comes with intuitive designs, such as swipe up or down functions for deposits or transfers, as well as games like virtual “quests” that guide users through its various products and services.
“ZA has gamified the experience a lot,” said Mr Quinlan. “It’s not all gimmicky; it’s about creating a community and a customer experience that people actually want and enjoy.”
The bank has said it will be designing new app functions such as budgeting and personal finance features.
It has also set its sights on competing for customers’ payrolls, describing it as a “key growth driver” for its customer base and the cross-selling of more products and services.
“Cracking employee payrolls is critical to driving sticky deposit growth over the long term, which in turn fuels a bank’s fee and interest income,” said Mr Quinlan.
“If customers are depositing their payrolls into your bank, you don't need to offer short-term deposit deals anymore. You’d have won the deposit war.”
For the year ahead, the digital banks in Singapore are gearing up new offerings that will hopefully grow their customer base and pave the way for profitability.
Trust Bank has said it expects to be profitable around the end of 2025, while GXS told CNA that it is “on track and remains committed to breaking even by the end of 2026”.
The latter recently made its move into the commercial segment and is offering its deposit account and loan product to small businesses owned by sole proprietors as a start.
Analysts have long singled out micro and small businesses as an underserved segment where digital banks can make a difference.
That said, there are already two digital wholesale banks – Greenlink Digital Bank and Anext Bank – that are serving commercial customers in Singapore.
MariBank also offers a deposit account with no minimum balance and other fees, as well as both short- and long-term loans for small businesses.
Asked how it would differentiate itself, GXS noted that one in two sole proprietorships in Singapore currently has a relationship with either Grab, Singtel, or both companies.
It is able to use data from within its ecosystem, such as cash flow patterns and payment behaviours, for its credit assessment model.
“This is useful, especially for young or small businesses without any credit history and enables us to offer more businesses a flexible and cost-effective financing solution,” the spokesperson said, adding that the digital bank will extend its offerings to private limited firms soon.
In the retail segment, GXS has in mind a product to help people get started with investments “in a fuss-free, low-risk manner”. It said that it would announce more details in the coming months.
Also eyeing the investment space is Trust Bank, which will roll out its new TrustInvest “early this year”.
The bank said it sees its first investment product benefiting the mass and mass affluent segments who remain underserved. People in these segments find it difficult to invest and tend to keep their money in savings accounts or fixed deposits.
“We want to change this and make investing radically simple and accessible,” said Mr Sadhu.
MariBank was the first mover in this space when it launched Mari Invest in October 2023. The investment account was premised on making investing “simple” without sales or platform fees, or lock-in periods.
It also had an instant cash-out feature, a first among banks, it said.
Assets under management have surpassed S$953 million as at end-2024, a MariBank spokesperson told CNA.
For 2025, the digital bank said it will remain focused on driving sustainable growth.
Plans include expanding its wealth management and payment capabilities, as well as a progressive roll-out of its personal loan offering that is currently available on an invite-only basis.
Continue reading...
Curious about the new offering – formed in an unlikely partnership between ride-hailing giant Grab and telco Singtel – Mr How was intrigued by GXS bank.
He was impressed when he finally got hold of an account – the app had a sleek interface, was more user-friendly than other banking apps and offered competitive interest rates.
But what stood out for the 42-year-old was a “savings pockets” feature that allowed users to squirrel away cash for specific purposes.
“In the old days, you will create multiple bank accounts to divide up your money. If you don’t, you will have to intentionally remember how much you are saving for a specific purpose,” he said. “With this, I could segregate my money intentionally within the same account.”
He found the feature “incredibly useful” and now uses GXS as his primary savings account.
Mr How also uses a bank card from Trust Bank – a digital lender backed by Standard Chartered and FairPrice Group.
This is now his go-to card for groceries and increasingly, overseas spending. Besides offering favourable exchange rates, it has the added convenience of being able to switch between a debit card and credit card via the app.
“There were not a lot of choices for consumers until the digital banks came along,” said Mr How who works as a financial adviser. “More can be done, but competition has been good so far.”
But Mr How may be the exception, rather than the norm.
When the Monetary Authority of Singapore (MAS) handed out digital banking licences in end-2020, it allowed non-bank entities to operate banks in Singapore.
The premise for digital banks is that with operations carried out entirely online, they can run on a low-cost model and pass on some of those savings to customers. Without the constraints of legacy systems, they are in a better position to innovate rapidly.
Singapore now has five digital banks. Three of them – GXS, Trust Bank and MariBank, which is owned by e-commerce group Sea – serve retail customers.
Since their launch, the digital banks have positioned themselves as more “transparent” and “fuss-free” than traditional banks, with high interest rate savings accounts that do not come with various qualifying criteria and cards offering lower fees and more rewards.
They have also begun dipping their toes into other offerings, such as personal loans, insurance and investments, to win over customers from traditional banks.
Three digital banks in Singapore serve retail customers – Trust Bank, backed by Standard Chartered and FairPrice Group; GXS, a joint venture of Grab and Singtel; and MariBank, owned by e-commerce group Sea. (Photos: Trust Bank, GXS, MariBank)
However, the disruptors do not have it easy given Singapore’s small market and an even smaller population that does not already have a bank account – less than 2 per cent of adult residents.
With the incumbent banks also improving their digital offerings, industry observers said digital banks in Singapore will have to do more to attract and retain customers like Mr How.
“Digital banks, with their lower costs and minimal overheads, are well-positioned to offer financial benefits sustainably in the short to medium term at least,” said Mr Amit Chopra, head of banking and payments for Asia-Pacific at payments technology firm FIS.
“However, building trust and loyalty through innovative products is key for retention, and a focus on personalised services and ease of access is essential for differentiation and success in the competitive Singapore market.”
SINGAPORE’S DIGITAL BANKS
So far, the three digital banks serving retail customers have yet to turn profitable – a stark contrast to the record profits that the traditional banks have seen in recent years.
Based on the latest annual earnings reports, all three banks remain in the red for the financial year of 2023 as growing costs offset increases in revenue.
“Their cost base is definitely lower with the lack of legacy platforms and the branch networks, but the problem is a lack of scale,” said Mr Avishek Nandy, head of financial services practice at consultancy Bain.
Continued customer acquisition in the form of promotional interest rates and other incentives also likely remained a key driver of costs.
For 2023, losses at both GXS and MariBank saw double-digit percentage increases, hitting S$152.1 million and S$52.2 million respectively. Trust Bank raked in losses of S$128.4 million, up 3 per cent from a year before.
That said, all three players saw improvements in their net interest income, a key financial metric for banks that reflects the difference between interest revenues and interest expenses.
GXS and Trust Bank saw net interest income increase by multiple folds, while MariBank reversed a deficit to clock in positive net interest income.
The key to winning the competition lies in deposits, a key source of bank earnings because they provide funds that banks can use to make loans and generate interest income, analysts said.
So far, Trust Bank has a head start, given its ability to tap into the strong ecosystem of FairPrice Group. It also holds a full bank licence, which has allowed it to function like a traditional lender.
GXS and MariBank were subject to a S$50 million regulatory cap on retail deposits, imposed by the MAS during the lenders’ first two years of operations to safeguard consumers’ interests. MariBank also began rolling out its offerings in 2023, nearly a year later than its rivals.
Based on its 2023 financial statement, Trust Bank’s customer deposits stood at S$1.8 billion. That surged to S$3 billion for the first half of 2024, with customer numbers hitting 806,000, the bank said in an update last August.
Trust Bank CEO Dwaipayan Sadhu told CNA that it would provide an update soon on its progress to “become Singapore’s fourth largest retail bank by customer numbers”.
“We’re making good financial progress,” he added.
Maribank has attracted S$503.8 million in customer deposits as of end-2023, while GXS has S$436.8 million, according to the annual statements.
GXS told CNA that its deposits have grown 48 per cent year-on-year as of end-September 2024.
But it’s not just about convincing customers to sign up - these digital banks have to keep them active on their platforms.
This means either using the product they have signed up for or trying other products.
They include cards, personal loans, insurance as well as investment and wealth management products, although each of them presents their own set of challenges.
For instance, revenue margins for credit cards have come down drastically, said Mr Nandy.
Insurance and investments are lucrative businesses that can help attract deposits and shore up fee income, but they are “emotional products that people would buy after there’s trust in a brand”, he added.
“It takes time to build up a brand and trust,” said Mr Nandy. “You have to play the long game.”
Agreeing, Mr Chopra said: “On the investment front, with the younger generation being more savvy when it comes to their investments, offering investment products can be a great move, but this needs to start with first building trust and loyalty with its customers to compete with the likes of robo-advisers.”
It is still early days for Singapore’s digital banks, said analysts, with profitability likely to happen a few more years down the road given the challenges in a mature market like Singapore’s.
A man uses a digital banking app on his mobile phone in Singapore.
SWITCHING AND STAYING
A recent survey by FIS suggested that incumbent banks in Singapore continue to enjoy strong customer loyalty.
Nearly half of those surveyed cited satisfaction with their current bank as a reason why they are hesitant to try digital banks, according to the survey findings released last November.
Another 36 per cent pointed to the lack of physical branches, while 34 per cent were concerned about the lack of in-person interactions with bank representatives.
For those open to digital banks, 45 per cent were drawn to higher interest rates. Sign-up bonuses were the appeal for 37 per cent of those surveyed, while 34 per cent pointed to the lure of a strong rewards programme.
For existing digital bank users, convenience, ease of use and security were the main perks.
“This suggests that while financial incentives are important to attract users, functionality and user experience are key retention factors,” FIS said.
People who spoke to CNA said the lack of profitability has not affected their interest in digital banks.
Digital banks in Singapore are covered by the Singapore Deposit Insurance Corporation’s (SDIC) Deposit Insurance Scheme, which insures depositors up to S$100,000 in the event of a bank failure.
Ms Amanda Lim cited this as a reason that she might move to digital banks, but she said she remains on the lookout for a “better reason” to move more money.
The 35-year-old currently has credit cards from both Trust Bank and MariBank to earn rebates for grocery shopping at NTUC FairPrice and cashback from purchases on Shopee respectively.
But she also has cards for other bills, while the bulk of her savings are stashed in another bank account.
“There are many accounts now that offer competitive interest rates, I don’t see the need to move my money around for just a few dollars more,” said the mother of one.
She has not used other digital bank offerings, such as personal loans, as they do not suit her needs.
Related:
For Mr How, insurance and investment products via a digital bank will only appeal to him if they are cheaper than what’s available on other investment platforms.
“At the end of the day, consumers should always be aware of the cost they are paying … and should not sign up for something just for bonus interest rates, because that might just be the fees that you are paying,” he said.
Beyond that, he is looking for a platform that can give him a “better experience beyond just banking”.
This means a platform that can potentially track his daily expenses, or tell him how to better use its payment system for rewards based on his spending patterns.
“It's not necessarily a digital versus traditional thing. It's more of which financial service institution is offering us the best way to keep track of our expenses and how we can make better financial decisions,” he added.
What would add to the appeal of digital banks is the ability to make GIRO payments, said Mr How who still holds on to an OCBC savings account for such payments.
“If digital banks can handle GIRO payments, I would totally close my OCBC account because there's no point in having more than one savings account now.”
Bain’s Mr Nandy said digital banks already have a wealth of data – the crux lies in how they can use this to glean insights and better serve their customers.
“(The banks now) are focused on putting out products on their shelves but how should a customer think about this product versus another? It should be an integrated approach – you bring a product to the customer and you wrap it with advice.
“I think that would make a huge difference in terms of the engagement and how you shape people's habits,” he said.
In this aspect, artificial intelligence may be able to help digital banks create solutions for individuals based on their saving, spending and investing habits, he added.
Related:
HONG KONG’S SUCCESS STORY
Likewise, in a move to inject innovation and competition into the industry, the Hong Kong Monetary Authority began issuing virtual bank licences in 2019.
There are now eight digital banks in Hong Kong but with more than 150 licensed banks already in operation, competition is stiff.
Hong Kong is a market with many similarities to Singapore.
“Both Hong Kong and Singapore do not have an unbanked or underbanked problem. So, the proposition of a digital bank becomes how do you create a better digital experience than say HSBC in Hong Kong and DBS in Singapore?” said Mr Benjamin Quinlan, CEO and managing partner of Quinlan & Associates.
So far, the six retail-focused banks in Hong Kong have savings, time deposits, as well as payment services like cards, personal loans and buy now pay later.
Key challenges include slowing customer growth and declining deposits, with many accounts being dormant or having zero balance, according to a report by Hong Kong-based strategy consulting firm Quinlan & Associates.
But one bank has done the seemingly impossible – ZA Bank reported its first monthly net profit in July last year, becoming the first digital bank in Hong Kong to do so.
The profit, which came after nearly four years in operation, was aided by growing deposits and fee income from its newly launched mutual fund and US stock trading business.
A joint venture between a unit of ZhongAn Online P&C Insurance and Sinolink Group, ZA Bank is currently the biggest digital bank in Hong Kong with over 800,000 users. In comparison, the second-biggest digital bank, Mox, has about 620,000 users.
Speed has been ZA Bank’s biggest competitive edge, said Mr Quinlan.
On its first day of launch in 2020, it rolled out a savings product and loan product. Within two years, the digital bank added other offerings such as cards with no annual fees, investment funds, insurance and international transfers, often being the first to do so.
“At the end of the day, people want the ability to seamlessly move money from a deposit to a trading or investment account. To that end, the activation rate of the customers on ZA was higher than its digital bank peers, given that the bank got its product shelf up and running much faster than every other bank,” said Mr Quinlan.
“Having much more mature functionality was very important in driving ZA’s revenue growth at an accelerated pace vis-à-vis the other digital banks, which were slower to roll out their products.”
The mobile app of Hong Kong's ZA Bank comes with intuitive designs, such as swipe up or down functions for deposits or transfers. (Screenshot: ZA Bank)
Gamification is another strategy used by ZA Bank to draw customers’ attention. Its app comes with intuitive designs, such as swipe up or down functions for deposits or transfers, as well as games like virtual “quests” that guide users through its various products and services.
“ZA has gamified the experience a lot,” said Mr Quinlan. “It’s not all gimmicky; it’s about creating a community and a customer experience that people actually want and enjoy.”
The bank has said it will be designing new app functions such as budgeting and personal finance features.
It has also set its sights on competing for customers’ payrolls, describing it as a “key growth driver” for its customer base and the cross-selling of more products and services.
“Cracking employee payrolls is critical to driving sticky deposit growth over the long term, which in turn fuels a bank’s fee and interest income,” said Mr Quinlan.
“If customers are depositing their payrolls into your bank, you don't need to offer short-term deposit deals anymore. You’d have won the deposit war.”
WHAT NEXT?
For the year ahead, the digital banks in Singapore are gearing up new offerings that will hopefully grow their customer base and pave the way for profitability.
Trust Bank has said it expects to be profitable around the end of 2025, while GXS told CNA that it is “on track and remains committed to breaking even by the end of 2026”.
The latter recently made its move into the commercial segment and is offering its deposit account and loan product to small businesses owned by sole proprietors as a start.
Analysts have long singled out micro and small businesses as an underserved segment where digital banks can make a difference.
That said, there are already two digital wholesale banks – Greenlink Digital Bank and Anext Bank – that are serving commercial customers in Singapore.
MariBank also offers a deposit account with no minimum balance and other fees, as well as both short- and long-term loans for small businesses.
Asked how it would differentiate itself, GXS noted that one in two sole proprietorships in Singapore currently has a relationship with either Grab, Singtel, or both companies.
It is able to use data from within its ecosystem, such as cash flow patterns and payment behaviours, for its credit assessment model.
“This is useful, especially for young or small businesses without any credit history and enables us to offer more businesses a flexible and cost-effective financing solution,” the spokesperson said, adding that the digital bank will extend its offerings to private limited firms soon.
In the retail segment, GXS has in mind a product to help people get started with investments “in a fuss-free, low-risk manner”. It said that it would announce more details in the coming months.
Also eyeing the investment space is Trust Bank, which will roll out its new TrustInvest “early this year”.
The bank said it sees its first investment product benefiting the mass and mass affluent segments who remain underserved. People in these segments find it difficult to invest and tend to keep their money in savings accounts or fixed deposits.
“We want to change this and make investing radically simple and accessible,” said Mr Sadhu.
MariBank was the first mover in this space when it launched Mari Invest in October 2023. The investment account was premised on making investing “simple” without sales or platform fees, or lock-in periods.
It also had an instant cash-out feature, a first among banks, it said.
Assets under management have surpassed S$953 million as at end-2024, a MariBank spokesperson told CNA.
For 2025, the digital bank said it will remain focused on driving sustainable growth.
Plans include expanding its wealth management and payment capabilities, as well as a progressive roll-out of its personal loan offering that is currently available on an invite-only basis.
Continue reading...