Best Digital Banks in Singapore 2021

This article will discuss some of the best digital banks in Singapore in 2020 and beyond.

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Introduction:

Digital bank – Times have changed since we saw banks as being physical, like in the picture above.

Digital Banks, also known as challenger banks, neobanks, and digital banking platforms are the fintech service providers that offer banking services just like a traditional bank.

Unlike traditional banks, digital banks won’t be having any physical presence and allow people to deal with their banking activities completely online. 

Because digital banks won’t be needing any sort of buildings, branches, a huge number of employees, etc., the fees might be low compared to normal banks.

Digital banks are usually known for making use of best-in-class digital platforms while primarily concentrating on online banking services.

People can be able to open an account with a digital bank in a time as low as a few minutes. Adding to that, they might even get a virtual card for conducting their banking-related activities.

A physical card will also be presented to the person opening a digital bank. Not only will this card be offered to an individual at a faster pace, but there are also some additional benefits to it as well.

With the help of the card provided by digital banks, a person can make an overseas payment without having to pay additional currency conversion fees, get analysis about their spending, tools for budgeting, etc.

Difference between a normal bank and a digital bank – Monetary Authority of Singapore (MAS) states that digital banks should make use of technology to satisfy the unattended segments of the domestic market to make them different from existing banks.

MAS has also made it clear that entities that hold a digital full banking (DFB) license must operate from only one physical location and should not have access to ATMs or CDMs.

1. ‘Traditional Banks’ 

A traditional bank is a financial institution that is allowed to receive deposits from customers and provide loans as well. There are some other services offered by these banks that are related to investments, banking, and insurance.

These banks have headquarters along with branches located across a country or, in some cases, other countries as well.

Traditional banks are known to be having full banking license and some of the features they offer are given below:

• Savings Accounts

• Checking Accounts

• Corporate Banking

• Cards (Credit and Debit)

• Investment Options

• Insurance Products

Traditional banks happen to be the most common type of banks that can be observed all over the world.

2. ‘Challenger Banks’

These are the fintech companies that don’t have any physical branches and these would completely work on an online basis while providing all the services similar to a traditional bank.

These banks also happen to have a full banking license and some of the services they offer are as follows.

• Savings Accounts

• Checking Accounts

• Merchant Accounts

• Consumer Lending

• Cards (Credit and Debit)

• Crypto trading

• Investment Opportunities

• Insurance Products

• Budgeting Tools and Spend Analytics

Challenger banks are the emerging option for banking services in the world.

3. Neo bank

Neo bank is a term that most people interchangeably use with challenger banks. However, there happens to be a difference between these two. 

While challenger banks have a full banking license, Neo banks won’t have one. Moreover, they involve in a partnership with any other financial institution, so that they can offer banking services.

Neo banks only operate with the help of mobile applications and web platforms. The services offered by Neo banks are given below.

• Prepaid debit cards

• Payments

• Domestic Fund Transfer

• International Fund Transfer

By comparing all the banking models mentioned above, you can see that the major difference between a traditional bank and a digital bank is the physical presence of branches and a wide network of ATMs and CDMs.

While coming to the services related to banking, you cannot expect a digital bank to have more banking features when compared to a traditional bank.

Note – It should be taken into consideration that all the banks that offer online wallets aren’t considered digital banks.

For instance, DBS lets its customers use digital wallets like Apple Pay, Google Pay, and Samsung Pay. However, it would still be considered as a traditional bank.

Even if a bank offers an excellent mobile application for banking, online banking services, and tools related to digital savings, it still won’t be considered a digital bank.

The main thing that makes a digital bank to be a digital bank is the banking system and infrastructure.

Advantages of a digital bank – Digital banks strive to provide a hassle-free experience to their customers with the help of money management features and an ecosystem of partners under a single platform.

The major advantages offered by digital banks have been listed below.

• Digital banks require very little time to open an account. As mentioned earlier, the time taken to create an account won’t exceed more than a few minutes.

• As digital banks happen to have very little maintenance costs and no need for high-numbered staff, digital banks offer services at very low prices.

• Not only the fees are low, digital banks even tend to provide higher interest rates in contrast to traditional banks.

• Users can hold various types of currencies under one account, which makes the process of spending money belonging to another currency easy.
  
  This will come in handy for the people who want to make international transfers, send money overseas, or shop at stores while visiting other countries.

• The security feature of a digital bank is one of a kind. In case of losing or misplacing a card, a person can easily be able to lock or unlock their card with the help of an app.
  
  As digital banks primarily operate online, there is no need to say about the encryption and security they aim for.

• All the spending of a customer would be evaluated with the help of advanced data analysis. 

• On the basis of the data analysis, the customer can set up a budget and track their financial progress. It can even be helpful for setting goals and limits for spending money.

• In some cases, digital banks might even offer an automated savings feature. This means that the money in an account will be rounded and the remaining change will be sent over to that person’s savings account.

• With the help of the mobile application provided by digital banks, customers can be able to trade cryptocurrencies without having to depend on any other third-party apps.

• Finally, with the help of digitalization, there won’t be an excessive necessity for papers in the form of cheques, forms, etc.

Disadvantages of digital banks – having taken a look at the advantages offered by digital banks, we’ll now see the disadvantages of digital banks.

• While some digital banks offer lower costs and fees, there might be a possibility that some might charge higher fees in return for premium services.

• In Singapore, as instructed by MAS, digital banks won’t be provided access to ATMs or CDMs.

• The money can only be transferred to a digital bank account with the help of a debit card, credit card, or bank transfer, and there is no availability of making a deposit with the help of cash or cheques.

Digital Banking Licenses – In June 2019, it has been announced by MAS that digital banking licenses would be granted to 5 contenders, which is 2 for full banking and 3 for wholesale banking.

Among the top contenders, ‘Grab-Singtel’ and ‘SEA Group’ have acquired the position to get digital full bank licenses from MAS.

On the other hand, ‘Ant Group’ and a ‘Consortium consisting of Linklogis Hong Kong, Beijing Co-operative Equity Investment Fund Management, and Greenland Financial Holdings’ were selected to obtain digital wholesale banking license.

DFB (Digital Full Bank) – these banks are allowed to receive deposits from their retail customers. The services provided are similar to DBS and OCBC while all the services are completely digitalized.

DWB (Digital Wholesale Bank) – Instead of retail customers, digital wholesale banks tend to offer services to enterprises ranging from small scale to medium scale.

Security – As for security, we have already discussed that digital banks offer excellent security to the people. 

Protection and encryption of data is done with the help of encryption protocols like SSL (Secure Sockets Layer) tech. 

With the help of such efficient encryption, data such as credit card information and other personal information can be encrypted.

Customers can log in with the help of one device at a time. If the device in which the customer used for logging in has been idle for a certain period of time, the session will automatically be logged out.

There is even a two-factor authentication feature that is known to be effective in terms of security from unauthorized access.

Limits can be set for daily spending or monthly spending, which would prevent the risk in case of a security breach. 

Software security solutions such as intrusion detection, firewalls, anti-malware systems, etc., provide amazing protection to the information stored.

How to open an account – people can create a digital bank account in Singapore by just downloading the mobile app of their preferred digital bank.

In order to sign up for an account with a digital bank, a person would be required to submit the following:

• Full name

• Date of birth

• Address

• Email address

• Government ID card

• Selfie for verifying the identity

Upon successful verification, a digital bank account will be created for the customer. After that, he or she can be able to deposit funds into their account and start using it.

Best digital banks in Singapore:

Now, let us have a look at some of the best digital banks available in Singapore and brief insight on their features.

(Note: We are also concluding neo banks in this list as they also operate digitally. Another to consider is that this list is of random order and is not listed based on the performance of those banks).

1. BigPay:

BigPay is a fintech subsidiary of AirAsia, that offers a completely digital wallet app along with a prepaid Visa card. This Visa card comes in handy for paying more than 53 million merchants located worldwide. 

Along with that, the customers are also offered privileges from AirAsia. The customers can also withdraw money from ATMs worldwide. 

The monthly fee for using BigPay is S$ 0, however, there is a 1% currency conversion fee.

Once after applying for an account, the card would be received by the customer within a period of 5 to 7 days. 

Features – Some of the primary features of BigPay include the following:

• Making overseas payments.

• International ATM withdrawals.

• International Bank Transfers.

• Integrated expense manager.

• Managing the card and account with the help of a mobile application.

• Contactless payments.

• Privileges from AirAsia.

• Reward points from AirAsia.

• Referral rewards.

Drawbacks – There are some drawbacks while banking with the help of BigPay, which are as follows:

• There is the availability of holding multiple currencies.

• Money can be transferred only to certain countries such as Australia, China, Vietnam, Malaysia, etc.

• Fees are charged on bank transfers and withdrawals made overseas.

• Additional charges for card replacement.

• Transfer limits are somewhat low compared to other digital banks. 

• Customers can only hold an amount of up to S$ 5,000 in their account at a time. 

2. GrabPay:

GrabPay is the subsidiary of the Grab app which is involved in providing services related to booking a ride, food delivery, subscription services, etc.

There are quite some features and payment options offered with this app along with a mobile wallet that can be used to store Grab balance.

The Grab balance can be used to avail of the wide range of services offered by Grab. Additionally, a credit card or debit card could be linked to top up the balance or to make direct payments.

Other methods of payment such as PayPal can also be linked to the GrabPay app for the convenience of the user.

Features – Let us take a look at some of the important features offered to the customers with the help of GrabPay.

• Customers are provided with an Auto-reload option, which will allow automatic top-up to reload the Grab balance.

• A new investment feature known as Auto Invest will automatically invest from the wallet balance, which can be set starting from as low as $1.

• Overseas Transfer.

• Prepaid Mastercard will be provided, which can be used to withdraw cash at home, overseas, and can also be used for online payments/transactions.

• Budget control.

• Payments can be made to merchants with the help of the Grab QR code.

• Rewards. 

• Card benefits on online purchases.

Drawbacks – Given below are some of the disadvantages of GrabPay.

• Certain types of benefits are only made available when a customer makes use of his/her GrabPay card.

• The rewards offered with the card are not as efficient as the rewards offered on some types of credit cards.

3. Neteller:

Neteller can be said as more of an online payment platform rather than a digital bank. Despite that, it is mentioned in the list because of the exquisite services that are offered to its customers.

The monthly fee for availing of the services of Neteller in Singapore is S$ 0.66. Additionally, there is a currency conversion fee of 3.99% and an international ATM fee of 1.75%.

Once after opening an account at Neteller and applying for a card, a prepaid Mastercard would be provided to the customer within a time period of 2 to 10 days. However, this card option has been made limited to only the customers from the European Economic Area (EEA).

Neteller supports many types of currencies such as SGD, JPY, PLN, CHF, INR, AED, HUF, SAR, RUB, BRL, and many others.

It should be taken into consideration that the customers living in Singapore are restricted from using Neteller account for making transactions related to gambling activities. 

Deposits can be made into a Neteller account with the help of Skrill, Bitpay, Paysafecard, etc.

Features – Given below are the advantages of availing of banking services with the help of Neteller.

• Money can be sent to another Neteller account, a person’s email address, bank account, or mobile money account.

• Neteller is supported in 180 countries and has an availability of more than 20 currencies making International money transfers hassle-free.

• Neteller could be selected as a checkout method at online checkouts that support payments via Neteller.

• Customers can buy or sell cryptocurrency with the help of the Neteller website or their mobile application.

Drawbacks – Listed below are the disadvantages of using the services offered by Neteller.

• Services are limited to the people living in certain countries, including Singapore.

• It is not clearly provided whether or not both the virtual card and physical card would be provided to the people living in Singapore.

4. Revolut:

Revolut is a digital banking service provider that offers a digital banking app along with a card. Revolut primarily concentrates on the technology, providing low fees, and premium features.

It is suitable for people who travel a lot and is known to offer different methods to send money abroad. This includes international money transfers (without fees) as well.

The monthly fee and ATM fee for withdrawing money from a Singapore ATM are S$ 0. On the other hand, the currency conversion fee is 0.5%, and the international ATM fee is 2%.

These rates are low compared to other digital banks and neo banks in Singapore. The card provided will be a Mastercard and will be sent within 9 business days after applying.

Revolut supports many types of currencies such as GBP, CAD, USD, AUD, EUR, HRK, QAR, and many others. It also supports mobile payments such as Apple Pay and Google Pay.

There are three types of accounts offered by Revolut, which Revolut Standard, Revolut Premium, and Revolut Metal.

Features – Given below are some of the important features of Revolut.

• International payments.

• Supports multiple currencies.

• Customers can keep track of their spending habits with the help of the Revolut. 

• 24/7 customer support.

• Accepted worldwide.

• Rewards.

• Card and account could be controlled with the help of Revolut app.

• No credit check.

Drawbacks – The major disadvantages of Revolut are as follows:

• Foreign currency transaction markups.

• Fees for foreign currency transfers.

• Online only.

• Additional fees.

• Limited features.

However, the features offered with the help of Revolut Metal at a price tag of $19.90 per month, customers get an exquisite metal card, complimentary travel insurance, disposable virtual cards, priority customer support, etc.

In addition to the above-mentioned features, customers also get 1% cashback on all the payments they make with the help of their card (Metal subscribers).

Other honorable mentions:

YouTrip

POSB (not a completely digital bank but provides digital banking services).

Wirex (more of a crypto and fiat currency wallet) 

Bottom line:

Digital banks have been coming into existence a lot all over the world these days. In a few years from now, there will be scope for an increase in the number of digital banks while competing with traditional banks.

However, these are the current best digital banking service providers in Singapore as of now. By the time you read this article, there is a possibility that other digital banks might take over these positions.

If there is a possibility, we will do another article next year comparing the top players in the industry at that time. 

We hope that you were able to find the information that you have been looking to find. That being said, if you need the services of a financial advisor or a wealth manager, you can avail of the best-in-class financial services offered by us.

We wish you have an extraordinary career with a huge amount of profits arising from all of your assets.