This article will discuss some of the best digital banks in Singapore in 2020 and beyond.
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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.
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:
Traditional banks happen to be the most common type of banks that can be observed all over the world.
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.
Challenger banks are the emerging option for banking services in the world.
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.
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.
Disadvantages of digital banks – having taken a look at the advantages offered by digital banks, we’ll now see the disadvantages of digital banks.
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:
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.
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).
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:
Drawbacks – There are some drawbacks while banking with the help of BigPay, which are as follows:
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.
Drawbacks – Given below are some of the disadvantages of GrabPay.
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.
Drawbacks – Listed below are the disadvantages of using the services offered by Neteller.
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.
Drawbacks – The major disadvantages of Revolut are as follows:
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).
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.