How digital banking works in singapore - Overview of new MAS digital banking licensed virtual banks

Wondering what’s new in digital banking in Singapore? Recently several more providers have been issued digital banking licences (Singapore) through MAS. These banks are now launching their products, enhancing the range of options for digital and virtual banks in Singapore, for both personal and business customers.

Let’s explore the new digital banks in Singapore, and have a look at the differences between a digital bank vs a traditional bank. We’ll also touch on a couple of other digital financial service specialists - like Wise, which can help cut your costs when you send, hold, spend and exchange foreign currencies.

Table of contents
What is a digital bank? List of digital banks in Singapore Digital bank vs Traditional bank Digital banking alternatives Wise Revolut

What is a digital bank?

Digital banks operate primarily online and through apps, usually with no branch network. The services available through digital banks can vary widely, particularly as some of the newer entries to the market are still launching products.

One great feature of the new digital banks in Singapore is that they’re digitally native. That means they’ve been built to offer services online and in-app - rather than being brick and mortar banks which have added on digital services. This can lead to a more intuitive customer experience when you use their apps, and also guarantees you’re getting the latest in online security when you bank.

One other useful thing to know is that there are also other digital financial specialists - particularly financial technology platforms like Wise and Revolut, which operate here in Singapore. We’ll look at these in more detail later.

These specialist services don’t hold full MAS banking licences - but they are still MAS regulated, and safe to use. This usually means they can’t offer the full suite of services, like credit and loans, that a licensed bank can - but instead they have their own specialist niches, such as low cost currency conversion, which can be handy to anyone who manages their money online.

MAS digital banking licence

Back to our new Singapore digital bank services. Here’s the background. In June 2019, MAS announced that it would offer 2 digital full banking (DFB) licences, and 3 digital wholesale banking (DWB) licences¹.

This offers opportunities for more providers - including non-bank entities - to offer banking services in Singapore. Holders of a DFB licence can offer services to retail customers, while the DWB licence allows business banking, and covers other non-retail customer segments. Here’s a rundown of the differences you’ll want to know about:

Digital Full Bank	Digital Wholesale Bank
Offers retail account products and services, to individual customers Relatively limited range of products available to start with, potential to add in more services over time	Offers SME and business deposit accounts and services Serves other non-retail segment clients

List of digital banks in Singapore

So who were the latest recipients of the MAS digital banking licence? Here’s a full list of the new digital banks in Singapore.

GXS bank by Grabpay and Singtel²

Grab - Southeast Asia’s leading app - and Singtel, the leading communications technology group in Asia, have come together to launch GXS³. We all know Grab from ride hailing, food delivery and more - and now, with their partnership with Singtel, you can also use GXS for banking.

GXS products and services at the time of writing include savings accounts which pay daily interest, easy ways to spend and send payments - and simple ways to earn more rewards as you spend.

Sea digital bank

Sea Limited⁴ is the internet service behind Shopee and Garena - and also Sea Money⁵ which has been offering financial products since 2014. You’ll know Sea Money through their Shopee Pay and SPayLater - and now you’ll be able to access their digital banking services, too.

At the time of writing, there’s not much information on how Sea digital bank will work - keep your eyes open for more details as they’re released.

Trust bank⁶

Trust is backed by Standard Chartered and FairPrice, and has solutions for saving and spending - with savings accounts, credit cards and insurance products. Because Trust has launched in part through FairPrice you can also get good discounts on your shopping when you use their services. In fact, you could save up to 21% when you use a Trust credit card at FairPrice, with easy ways to earn extra rewards and referral bonuses too.

ANEXT bank by Ant Group⁷

ANEXT offers business banking services, and is wholly owned by Ant Group, an Alibaba affiliate. You can open a business bank account for free, with no minimum balance, in either SGD or USD. There are options to send payments locally and internationally, including sending and receiving payments in 9 major trading currencies, like SGD, USD, GBP and EUR.

Green Link Digital Bank⁸

Green Link Digital Bank - also known as GLDB - offers business solutions like deposit accounts, payments, loans, overdrafts and trading tools. GLDB’s services - including current accounts and savings products - are available in both SGD and USD.

GLDB is supported by investors including the Greenland Group and Linklogis consortium. The Greenland Group operates internationally in real estate and infrastructure development, while Linklogis is a technology solution provider for supply chain finance.

Digital bank vs Traditional bank - benefits

So why would a digital bank appeal - when there are so many traditional banks in Singapore to choose from? Here’s a look at some of the digital bank vs traditional bank benefits:

• Digital banks have been built for use in a digital environment first and foremost - which can mean better apps and more intuitive user interfaces
• Digital banks have no physical branch network which means lower overheads - and can lead to lower fees for customers
• Digital banks have been able to incorporate other perks into accounts - such as discounts on grocery shopping, or easy ways to earn reward points - thanks to some investors being non-bank entities like Grab and FairPrice
• Digital banks have regulatory supervision from MAS, and will use industry leading security - it’s what they were created to do

Digital banking alternatives

The banks we have introduced so far are the most recent entrants into the digital finance scene here in Singapore. However, there are also some more providers which aren’t full fledged digital banks but which offer similar services. Here, we’ll look at two as an example, so you can see if either fits your needs.

Wise

Wise arrived in Singapore in 2017, and was one of the first remittance companies allowed by MAS to verify customers online. Since then, Wise has launched services including multi-currency accounts for individuals and businesses, and low cost international transfers to 80+ countries around the world.

Wise doesn’t hold a digital banking licence but is regulated by MAS in Singapore. That means Wise is safe to use to hold, send and spend money. Open your Wise account online or in the Wise app, to hold 50+ currencies, and get paid conveniently like a local from 30+ countries. You can also get a linked Wise card for easy spending when you travel.

Where Wise stands out as an alternative to the newer digital banks is in the breadth of international services available - with flexible multi-currency account options that offer mid-market currency exchange which could suit a broad range of customers.

Learn more about Wise

Pricing/fees: Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information

Revolut⁹

Revolut has a selection of accounts for personal customers - although business account services are not yet available in Singapore. You can open a free standard account plan, or upgrade to an account with monthly fees to unlock more features and get a higher level of fee free transactions. All accounts offer some currency exchange which uses the mid-market exchange rate, and can be used to hold and exchange 25+ currencies.

Revolut is a strong alternative to the new digital banks in Singapore, if you’re a personal customer looking for a flexible online account which can be used to hold and exchange currencies - particularly if you’d like to offer accounts to your kids, as Revolut has Under 18 account products for family members. Revolut also has ways to buy and sell stocks, commodities, and crypto.

Learn more about how Wise and Revolut compare here.

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Summary

Digital banking is only going to get bigger. As we all become more and more familiar with - and reliant on - being able to manage our lives on the move, sorting out your personal or business finances from your phone will be second nature. While the main traditional Singapore banks all offer online and mobile banking solutions, they may also come with higher fees as they need to maintain their branch network. And as they’re not digital first providers, customers may find the apps on offer from the newer providers more intuitive to use.

Ultimately, whether a virtual bank or similar non-bank provider - or a traditional bank - works best for you comes down to your personal preferences and the sorts of transactions you need to make. Keep watching as more providers enter the market - and as the existing services launch new products - to find one which suits your needs.

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Sources:

1. MAS digital banking licence
2. GXS
3. GXS About us
4. Sea digital bank
5. Sea Money
6. Trust bank
7. ANEXT
8. GLDB
9. Revolut Singapore

Sources checked on 17/02/2023