Digital banks set for expansion in 2024, amid increased competition

Product offerings to grow as banks face headwinds from slowing economy

- Prisca Ang

Singapore's digital banks are gearing up for further growth in 2024, amid headwinds from a slowing economy and high interest rates that have weighed on loan demand and led to stiff competition for deposits.

They have already made progress since launching their services from the second half of 2022, with Trust Bank, GXS Bank and MariBank catering to individual customers.

MariBank, Anext Bank and Green Link Digital Bank serve micro, small and medium-sized enterprises (MSMEs). Trust and GXS have not rolled out such services yet although their licences allow them to do so.

Trust Bank chief executive Dwaipayan Sadhu said the macroeconomic environment is expected to turn challenging in the next 12 months, but the bank is in a strong position due to high customer engagement levels and a wide product range, which spans savings, loans, cards and insurance.

Backed by Standard Chartered and FairPrice Group, the lender holds a full bank licence that comes with fewer restrictions than those faced by other digital banks. It crossed $1 billion in deposits in May and aims to be Singapore's fourthlargest bank by customer numbers by the end of 2024.

Mr Anton Ruddenklau, partner and head of financial services at KPMG in Singapore, said digital banks have struck a chord with customers by offering products that reward them for spending and fit in with their lifestyles.

The newcomers' growth comes at a time when customers are increasingly choosing to bank online, even amid a spate of disruptions at incumbent bank DBS and a rise in scams which recently moved traditional banks to let customers lock their savings for in-person withdrawal only.

Digital banks said that they have built their infrastructure from scratch in recent years and are therefore unencumbered by legacy technology that could hinder the recovery of critical services.