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Digital banking puts your finances at your fingertips 24/7. There’s a host of online banks, digital-only banks and personal finance apps available now, all designed to give you better, faster control of your cash.
We’ve rounded up everything you need to know, so you can decide if digital banks are right for you.
Digital banks (also called challenger banks or neobanks) give you a way to control your money by allowing you to bank entirely from an app on your smartphone, rather than from a physical branch or office. It doesn’t operate on any legacy systems, namely physical infrastructure or digital operating systems, that are already being used by existing financial institutions in Singapore.
With a digital bank, you can sign up to an account in minutes, get your card relatively quickly (and you may get a virtual card), benefit from convenient features such as low foreign currency fees, smart security controls and more.
There are a few digital banks available in Singapore, with more to come in the near future.
Many banks in Singapore appear to be digital banks since they offer top quality mobile banking apps for their customers. However, just because a bank offers a range of digital products and platforms doesn’t mean it’s a digital bank or a neobank.
Many banks offer contactless payments via digital wallets like Apple Pay, Google Pay and Samsung Pay. For instance, DBS allows its customers to connect their credit and debit cards to these digital wallets, but it’s not considered a neobank.
Similarly, if a bank offers a top-notch mobile banking app, Internet banking services and digital savings tools, this doesn’t automatically mean it’s a digital bank either. Remember, a 100% digital neobank is one that doesn’t use any existing banking systems or infrastructure.
There are several perks to using a digital bank. Among them:
On 29 August 2019, non-banking companies had the opportunity to apply for “digital bank licences” offered by the Monetary Authority of Singapore (MAS). The application period was closed at the end of last year and the five licences are expected to be issued in the upcoming months.
In Singapore, digital banks are expected to utilise technology to reach “under-served” segments of the domestic market to differentiate it from existing banks. This means that some features offered by traditional banks may not be made available to digital banks.
Here are a few things that you may not know about using your mobile as your main point of contact with your bank:
MAS (Monetary Authority of Singapore) has stated that digital banks in Singapore are not allowed to access the ATM or cash deposit machine network. This means that you’d need to transfer funds to your digital bank’s account balance through a credit card, debit card or bank transfer.
Digital banks tend to have better services in terms of foreign currency. Some let you hold multiple currencies in your account while others facilitate faster international transfers at lower fees than standard banks.
Not every mobile bank has a full banking licence. In Singapore, MAS only recently announced that the government will issue up to five digital bank licences that non-banking enterprises may apply for – up to two will be digital full bank licences and up to three will be digital wholesale bank licences. However, the digital banking model is not entirely new in Singapore as various lenders or digital payments startups have been allowed to operate with MAS’s remittance licence.
For example, digital bank Revolut has been granted a remittance licence by MAS and operates as a Stored Value Facility holder. This means that Revolut may conduct its mobile banking business in Singapore, but your money may not be covered by a government guarantee. However, there are still safeguards in place as these banks are required to keep your deposits in an account with a separate bank, which you can then claim back if something goes wrong.
You generally sign up for a bank account in Singapore at a branch, but you also have the option to do it online. With digital banks in Singapore, you can only sign up on your smartphone and most of them don’t provide access to Internet banking from your computer.
A benefit of a digital bank is having full access to your account at all times. Lots of mobile banks allow temporary freezing of your account in the case of a lost card, so if you find it again, it’s not much of a hassle to get a replacement. If you forget your pin, the banking apps also tend to have access to a pin reminder after you complete a couple of security questions.
Some mobile banks charge higher monthly fees for premium accounts, which offer additional features such as insurance, discounts, cashback and more.
There are a number of challenger banks available in Singapore, including the following:
Applications for a digital banking licence are being accepted until the end of the year. At the moment, there are 14 shortlisted applicants including Grab, Singtel, Razer and FWD insurance.
You can sign up with a digital bank in Singapore by downloading your chosen bank’s app onto your smartphone.
To sign up, you’ll need to provide a few of your personal details, including your full name, date of birth, address and email address. This process typically requires you to take a front and back image of your government-issued ID, as well as a selfie for identity verification.
You will need to confirm your identity and may need to deposit funds into your account to make it active. Then, your bank account will be created.Back to top
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