Will Singapore’s new digital banks like GXS and Trust be a ‘game-changer’? Experts aren’t so sure
- A wave of new virtual banks backed by the likes of tech giant Grab and legacy lender Standard Chartered are launching in the city state
- Analysts caution they face challenges carving out a niche in such a saturated market – and say Malaysia may offer greater ‘potential for success’
Many had hoped the development could help inject new life into an industry long dominated by big legacy players, but observers say the launch of the city state’s first digital banks has proved a tad underwhelming.
Lawrence Loh, a business professor at the National University of Singapore, said he didn’t think the new banks would prove to “be a game-changer” as “what they are offering will not tip the balance”. “They are not revolutionary products that people do not already have access to … It’s a little attractive but I think it’s insufficient,” he said.
Analysts, including Loh, expected more from digital banks if they are serious about taking market share away from traditional lenders like DBS and OCBC – and say Singapore’s experience offers lessons for other digital hopefuls in the region.
GXS Bank – a consortium comprising ride-hailing firm Grab and telecoms company Singtel – unveiled its virtual offering late last month, with CEO Charles Wong saying it was designed to “support the needs of entrepreneurs, gig economy workers” and early-career professionals.
Among the key features GXS offers are a “Saving Pockets” function designed to help customers save for specific goals, and offering an annualised interest rate of 1.58 per cent.
Hot on its heels came Trust Bank – a joint venture between Standard Chartered and Singapore supermarket chain FairPrice Group – which launched a day afterwards offering savings accounts, credit cards and insurance products targeted towards working families.