With the issuance of digital bank licenses by the Monetary Authority of Singapore (MAS) in 2020, digital banks have gained popularity in Singapore. These banks provide app-based and user-friendly services that enable customers to manage their accounts and monitor their finances without visiting physical branches.
However, it’s important to consider the differences between digital banks and traditional brick-and-mortar banks when selecting a bank.
This guide aims to help you make an informed decision about which type of bank suits your needs best by exploring these differences.
Digital Banks and Traditional Banks Compared
Both digital and traditional banks offer the same services, generally speaking. That said, the former tend to offer additional digital services that you might not always find with the latter.
Let’s start out by quickly reviewing how traditional banks and digital banks in Singapore differ from each other. Here’s what you should know:
|Digital Banks||Traditional Banks|
|Owned by prominent tech or ecommerce companies||Operated by banks or financial institutions|
|Usually electronic or app-based only||Have physical branches in various locations|
|Can be done entirely online with no minimum balance requirement||May require in-person visits or paper-based processes with minimum monthly balance requirement|
Products and Services
|Offer basic banking services such as checking and savings accounts, loans, and credit cards, as well as other financial products like insurance and investments||Offer basic banking services as well as other financial products such as investments, insurance, and mortgages|
|Fees||May have lower or no fees for certain services||
May charge fees for certain services
|Interest Rates||May offer higher interest rates for savings accounts||
Interest rates may vary and may not be as competitive as digital banks
|Customer Support||Primarily online support with 24/7 chat support||
Offer in-person support and sometimes online support with 24/7 chat support
|Accessibility||24/7 access through mobile apps and online platforms||
Limited accessibility outside of operating hours and physical locations
|Security and User Experience||“Digitally native” with state-of-the-art security and latest digital technologies||
Dependable, but older banks that added digital services later may not have as secure or intuitive apps
Naturally, both traditional and digital banks in Singapore have their pros and cons. Traditional banks offer a tried-and-tested reputation and the convenience of physical branches located in the city-state, whereas a digital bank is likely to offer lower fees and interest rates and better online customer support. Ultimately, which bank is most suitable will always depend on you, and what you intend to use it for.
Digital banking services have skyrocketed in popularity in the city-state ever since the COVID-19 pandemic. Digital banks offer fast and user-friendly apps that allow retail customers to do everything they need banking-wise via their smartphones. They also offer Digital Wholesale Bank products that are better suited to SMEs and start-ups.
Why Go Digital
- Reward Programs and Discounts: Many digital banks offer reward points schemes, collaborations with affiliated brands, and discounts on grocery shopping to their customers.
- Affordable Fees: Digital banks have lower overheads and lack physical premises, leading to more affordable fee structures for customers.
- State-of-the-Art Security: Digital banks have state-of-the-art security, thanks to the technology used and licenses granted by the Monetary Authority of Singapore (MAS).
- Superior User Experience: Digital banks are built specifically for use in a digital environment, resulting in excellent user experiences.
- Better interest rates than other digital banking alternatives.
- Lower fees and less hidden charges.
- Easy to download from Google Play or the Apple App Store.
- Less flexibility with transactions.
- No “personal touch” or face-to-face interactions.
- Conventional banks usually have a better industry reputation.
Digital Full Bank License Banks vs Digital Wholesale Banks
You’ll see these two terms thrown around a lot when you start shopping around for a digital bank account. In short, Digital Full Banks offer retail-targeted, basic credit and investment products with no minimum deposit requirement.
Conversely, Digital Wholesale Banks are aimed at non-retail users. These are more likely to offer services such as a corporate bank account for SMEs and start-ups deposit-free, but will require a minimum deposit of at least $250,000 if used by individuals.
Best Digital Banks in 2023
Let’s take a closer look at some of the best digital banking providers currently offering their services in the city-state. Our favourite digital banks in Singapore right now are GXS, Green Link, Sea Digital Bank, Trust Bank and ANEXT Bank. Here’s what they have to offer.
1. GXS Bank – Best for Savings Accounts
“No queues, no branches and no hassle” is the motto at GXS Bank, an emerging challenger bank that offers state-of-the-art app and online services. Their tech has a great security reputation, and you can get a GXS FlexiLoan with interest from 3.8%, or a GXS savings account with similarly competitive rates.
- Accessible via your Grab and Singtel apps.
- Open a GXS savings account with great rates.
- Complete transactions with just a few taps.
- Website: www.gxs.com.sg
2. Green Link Bank (GLDB) – Best for Business Accounts
GLDB targets its digital banking offerings more toward businesses. Their innovative services span from basic deposit accounts and payment services to overdrafts and fully-customisable loan packages.
- Deposit accounts, overdrafts, and loans all available.
- Great reputation in the sector.
- Term loans can be taken out by businesses.
3. Sea Digital Bank – Best for Innovation
Sea Limited started out as a consumer internet company, and now offers a superb digital banking platform right here in Singapore. That said, Sea keeps the details of its features very private.
- Established reputation in tech.
- Company has been involved with Shopify and other big brands.
- Innovative banking solutions.
4. Trust Bank – Best for Security and Reputation
Trust Bank offers Singaporeans a Trust Savings Account that comes with great rates and is powered by SC, one of the city-state’s top financial institutions. This makes Trust Bank the go-to digital bank for anyone looking for top-tier security and a well-established sector reputation.
- Enjoy competitive Trust Bank Savings Account rates.
- Backed by Standard Chartered, meaning many products are available.
- Digitally-native and 100% secure.
- Tel: Call Trust Bank 24/7 via the Trust Bank app.
5. ANEXT Bank – Best for Foreign Transaction Processing
ANEXT Bank offers SMEs access to some truly excellent business banking services that enable you to transact using multiple currencies. This is by far the best digital banking option for international businesses.
- Innovative business banking products.
- Free and easy-to-use app.
- Multiple foreign currencies supported.
Most conventional banks have been in the banking business for generations – and many today offer similar apps and digital banking services to their more modern, app-based competitors. Whether you need a main savings account, checking account services or loan products, an old-school bank will offer banking services of all shapes and sizes, including hands-on advisory.
Best Traditional Bank Features
Singaporeans have trusted and relied upon major conventional banks for decades, and there are several reasons these institutions still hold such an important place in modern-day society.
Why Stay Traditional
- Convenient Physical Branches: Traditional banks have in-person branches throughout the city-state, providing greater convenience compared to new digital banks and other competitors.
- Broad Range of Services: Traditional banks offer banking services that generally span a much broader range, including credit cards, loans, and other financial products.
- Expert Financial Services: Expert financial services sector services, such as financial advisory and wealth management, are only available at traditional banks.
- Quality Digital Banking Services: Many old school banks offer digital banking services and apps that are just as good as those offered by their app-only equivalents.
- Tried and tested industry reputation.
- Unique advisory and wealth management services can only be accessed in-house.
- Greater variety of bank account types on offer.
- App or digital banking services might not be as user-friendly.
- Tech or account issues could take longer to resolve.
- Interest rates and fees might be higher.
Best Traditional Banks
1. Standard Chartered Bank
Boasting more than 100 years of banking industry experience and more than 85,000 employees, this is one of the biggest and best banks around.
- Offers credit cards, loans, mortgages and more.
- Great reputation for auto financing.
- Get credit cards with no annual fees and up to 6% cashback.
- Website: www.sc.com
2. DBS Bank
DBS dates back to 1968 and has a worldwide reputation. They’ve been offering services to Singaporeans for generations and have more than $451bn in total assets.
- Branches all across Singapore.
- Excellent corporate and SME services.
- Singapore’s leading consumer bank.
- Website: www.dbs.com.sg
3. OCBC Bank
OCBC’s headquarters was once the tallest building in southeast Asia. They first started out in the 1940s and even today still offer some of the most trusted banking services in the city-state.
- Singapore’s longest-established local bank.
- State-of-the-art internet banking platform.
- Multiple personal and corporate services available.
- Website: www.ocbc.com
First founded in 1960, Maybank has gone on to become one of the largest and most trusted banks in southeast Asia. They offer great internet banking and corporate bank account services, too.
- Broad range of personal, wealth and corporate banking services.
- Get promotional interest rates on savings accounts.
- All kinds of loans and financing also available.
- Website: www.maybank2u.com.sg
The globally recognised Citibank brand is one of the best choices in Singapore for wealth management services and credit cards.
- Large selection of competitive credit cards.
- Offers health with investments and wealth management.
- Top-rated and easy-access personal loan available.
- Website: www.citibank.com.sg
Is Now the Time to Switch to a Digital Bank?
Digital banks clearly offer a lot of potential, particularly to more tech-savvy account holders who want to benefit from native apps that offer the very latest fintech features. As digital bank users will also benefit from greater customer support and more competitive interest rates, there are several other reasons to switch beyond tech improvements, too.
That said, traditional banks continue to offer trusted services and a much more hands-on approach to financial services, which you simply can’t get with online-only financial institutions. Ultimately, whether you decide to make the switch today or wait until challenger banks have expanded and improved their services tomorrow, is entirely up to you.
See Also: Urgent Loan
Both digital and conventional banks offer numerous benefits to their users, but each also come with their own unique downsides that you’ll want to consider, too. At the end of the day, which type of bank is right for you will depend on your own preferences and needs. Just be sure to keep in mind that:
- Digital banks typically offer more attractive interest rates, better user-friendliness, and faster-acting tech support than conventional banks. That said, old-school banks win hands-down when it comes to reputation and experience.
- If you opt for digital banking alternatives, you’ll need to consider whether a Digital Wholesale Bank or a full banking license bank is the right fit for someone in your position. This will largely depend on whether you need a regular retail or a business account.
- You should consider things like fees, interest rates and how frequently you might need to access a physical bank branch when deciding which kind of bank is the best fit for you.
Whether you’re interested in digital banks or traditional banks, it’s important to find the bank that offers the features and services that best meet your needs. And if you’re in need of fast finance, Instant Loan can help you compare personal and business loans in Singapore, so you can find the right loan for you in just a few minutes!