ENTERING THE MARKET
All three digital retail banks have launched savings accounts that pay higher interest rates.
They have also positioned themselves as “transparent” and “fuss-free”, compared with traditional banks whose bonus rates often come with various criteria such as a minimum account balance or spending on eligible cards.
These additional requirements may be out of reach for some individuals such as entrepreneurs and gig workers, said GXS chief executive Charles Wong. The new bank, whose users are mostly digital natives in their 20s and 30s, designed its savings account “specifically to address these gaps”.
Echoing a similar sentiment, Trust’s chief executive Dwaipayan Sadhu said: “Too often, bank promotions are complex and attract customers with a high headline that is not realistic.”
Beyond savings accounts, Trust, the first digital retail bank to launch in Singapore, offers credit and supplementary cards, a budgeting tool, as well as personal accident and travel insurance.
GXS added personal loans to its offerings in April. Targeted at gig economy and freelance workers, these loans allow customers to borrow as little as S$200 (US$150) with tenures starting from just two months.
MariBank, on the other hand, is “taking a deliberate and measured approach” to rolling out its services, a spokesperson told CNA. While the bank has not expanded on its retail offerings, it recently announced a business loan product for Shopee sellers.
It is worth noting that GXS and MariBank are currently taking retail deposits on an “invite-only” basis, largely due to a deposit cap of S$50 million imposed by MAS on retail digital banking licensees.
In contrast, Trust holds a full bank licence which allows it to function like traditional lenders. The digital bank has attracted more than S$1 billion in deposits as of last month.
“This gives Trust an advantage, as it has managed to roll out its services to the general public faster,” said Associate Professor Jan Ondrus from the ESSEC Business School Asia-Pacific.
The strong ecosystem of FairPrice Group, including “extensive promotion” of the new digital bank in FairPrice supermarkets, has also given Trust a leg-up in the race for market share, experts said.
“Given NTUC’s existing customer base attracted to discounts for grocery shopping, there is significant potential for a robust adoption rate,” said Assoc Prof Ondrus.