Digital banks have seen a remarkable rise in recent years, transforming the financial landscape and offering more convenient, tech-driven solutions to customers.
With the growth of mobile banking and the increasing preference for online financial services, the city-state has become a hub for digital-first financial institutions. These online platforms aim to provide accessible, efficient, and customer-centric banking services without the need for physical branches.
In this article, we will explore the different types of online banks operating in Singapore, including their unique features, advantages, and the services they provide to cater to the diverse needs of consumers.
1. Fully Digital Banks (Neobanks)
What Are Neobanks?
Neobanks are fully digital financial institutions that operate without any physical branches. They offer a wide range of banking services through digital platforms, usually via mobile apps or websites. These platforms are built on technology, making it easy for customers to manage their finances anywhere and anytime without having to visit a traditional bank branch.
Key Features of Neobanks
- Account Opening and Management: Neobanks allow customers to open accounts quickly and without any paperwork, often through a simple process on their mobile app. Account management, including transferring money, paying bills, and setting up savings goals, is all done digitally.
- Fee-Free Accounts: Many neobanks offer fee-free accounts, with no monthly fees or fall-below charges, making them attractive to customers looking for a cost-effective banking solution.
- Competitive Interest Rates: Digital banks often offer higher interest rates on savings accounts compared to traditional banks due to their lower operating costs.
- Innovative Features: From instant transfers to budgeting tools and automated savings plans, neobanks often provide cutting-edge features that traditional banks may not offer.
Examples of Neobanks in Singapore
- Revolut: A popular online-only bank that offers services ranging from savings accounts to stock trading and cryptocurrency exchange. Revolut is known for its innovative features, such as the ability to hold multiple currencies in one account and its fee-free international money transfers.
- Tomo: A digital-first bank that focuses on creating a seamless experience for customers by offering savings accounts, flexible loans, and cashback options.
2. Digital-Only Subsidiaries of Traditional Banks
What Are Digital-Only Subsidiaries?
Some of Singapore’s traditional banks have developed digital-only platforms to cater to the growing demand for online banking services. These platforms are part of established banking institutions but do not operate physical branches. Instead, they focus on providing all their services digitally, often through user-friendly mobile apps.
Key Features of Digital-Only Subsidiaries
- Integration with Parent Banks: Digital-only subsidiaries are often integrated with their parent bank’s broader financial ecosystem. This allows customers to easily link their accounts with the parent bank, making it simple to access a wide range of products and services.
- Low Fees and Convenient Services: These digital platforms often offer low-cost banking options, including fee-free accounts and reduced charges for services like money transfers or credit card usage.
- Access to Traditional Banking Products: Customers of these platforms often have access to traditional bank services, such as mortgages, credit cards, and investment options, which can be accessed easily through the digital platform.
Examples of Digital-Only Subsidiaries in Singapore
- DBS Digibank: DBS Bank’s digital platform, Digibank, allows customers to access a range of services, including savings accounts, loans, and wealth management tools, all managed through a mobile app.
- OCBC Digital Banking: OCBC’s digital banking platform provides a variety of banking services such as savings accounts, investments, and loans, while allowing customers to manage everything through a secure, easy-to-use app.
3. Hybrid Digital Banks
What Are Hybrid Digital Banks?
Hybrid digital banks are institutions that combine both traditional banking and digital services. These platforms offer digital banking solutions via apps and websites but also maintain a physical presence through a network of branches. The aim of hybrid banks is to offer the best of both worlds, combining the convenience of digital banking with the support and personal touch of physical branches.
Key Features of Hybrid Digital Banks
- Branch and Digital Access: Customers can choose to visit physical branches for more complex services or enjoy the convenience of managing their finances entirely online.
- Comprehensive Service Offering: Hybrid banks typically provide a wide range of banking products, from basic accounts and loans to more complex investment and insurance solutions.
- Omnichannel Banking: These banks allow customers to transition seamlessly between digital and physical services, making it easy to choose the service channel that best suits their needs.
Examples of Hybrid Digital Banks in Singapore
- GXS Bank: A digital-first platform backed by Grab and Singtel, offering seamless mobile banking services with a focus on customer convenience.
- UOB Digital Banking: UOB offers a hybrid approach, allowing customers to access banking services through its digital platform while also providing in-branch support for more personal services, such as financial advice and loan applications.
- Standard Chartered Digital Bank: This hybrid platform allows customers to manage their finances online, but also provides the option to visit physical branches for more personalised services.
4. Niche Digital Banks
What Are Niche Digital Banks?
Niche digital banks are designed to cater to specific customer segments or financial needs. These platforms focus on particular areas of banking, such as offering services to small businesses, the underbanked, or eco-conscious customers. By targeting specific groups, these digital-first platforms can offer tailored solutions that meet the unique demands of their customer base.
Key Features of Niche Digital Banks
- Specialised Services: Niche banks often provide services that are specially tailored to meet the needs of their target demographic. This could include business loans, eco-friendly investment options, or savings tools for specific communities.
- Enhanced Customer Support: These banks often offer customer support that is more personalised to their target market, providing expert advice and support on the specific services they offer.
- Flexibility and Innovation: Niche digital banks are often more flexible in their offerings, using technology to innovate and adapt their services to the needs of their customer base.
Examples of Niche Digital Banks in Singapore
- Green Bank: A digital platform focused on providing sustainable financial solutions, such as eco-friendly investments, green savings plans, and environmental impact analysis for customers interested in sustainable living.
- Chime: Although based in the US, Chime offers digital banking services with a focus on serving customers who are underserved by traditional banking institutions, providing fee-free accounts and easy access to credit.
5. Mobile-Only Banks
What Are Mobile-Only Banks?
Mobile-only banks are a subset of digital banks that exclusively operate through mobile apps. These platforms do not provide access through websites or physical branches. Mobile-first banking is designed to provide customers with a streamlined experience that prioritises simplicity, convenience, and ease of use.
Key Features of Mobile-Only Banks
- Exclusive Mobile Access: All banking services are available through a dedicated mobile app, allowing customers to perform all banking activities on their smartphones.
- User-Friendly Interface: Mobile-first platforms are known for their intuitive, easy-to-navigate interfaces, designed to enhance the user experience.
- Focused Product Offering: Many mobile-only banks focus on core banking services, such as savings accounts, debit cards, and budgeting tools, while excluding more complex services like mortgages or wealth management.
Examples of Mobile-Only Banks in Singapore
- Monzo: A UK-based mobile-only bank that has gained traction globally, offering simple banking services through its user-friendly mobile app.
- N26: Another popular mobile-only bank that focuses on delivering essential financial services, such as current accounts, savings, and international transfers, all through its mobile platform.
Conclusion
The landscape of digital banking in Singapore is diverse, with various types of digital-first institutions catering to different customer needs.
From fully digital neobanks to hybrid platforms combining physical branches and online banking, there are options for every type of consumer. Whether you are looking for an account with no fees, an eco-conscious banking solution, or a more traditional bank with a digital twist, Singapore’s digital banks offer a range of services designed to meet modern financial demands.
As the sector continues to grow, we can expect to see even more innovation and specialised platforms emerging to provide tailored banking experiences.
