Dear readers, yesterday, the first retail digital bank was launched in Singapore.
Called GXS Bank, or Grab-Singtel digital bank, GXS Bank has launched a savings account which offers a 0.08% per annum interest accrued daily. GXS customers can create up to 8 Pockets from their savings accounts, which earns 1.58% interest per annum accrued daily.
And today, another digital bank, Trust Bank was launched. Trust Bank is the digital bank between Standard Chartered Bank and Fairprice Group. Trust Bank launched with savings accounts and credit card offerings for retail customers. Among some of the offerings from Trust Bank was 1% per annum interest for deposits up to S$50,000.
I believe that two digital banks were connected with institutions that are popular with Singaporeans: Singtel Group and Fairprice Group and hence these two digital banks would have had some form of branding, right at the outset for customers and potential customers. And I understand that there will be a third digital bank for Singapore coming up: SEA’s Maribank.
With the launching of one digital bank after another for Singapore, I find that the scene now for digital banks in Singapore was akin to the launch of the open electricity market retailers in Singapore a few years back. Back then, there were so many offerings from the open electricity market retailers but eventually, only a few (the bigger ones) are now the only ones standing. And I believe the consolidation of the open electricity market retailers has to do with the limited size of the Singapore market.
As such, not to throw cold water, I am not really sure (as I am not an expert) on whether Singapore’s limited size can likewise support three digital banks in all? Only time will tell.