SINGAPORE — Digital retail banks in Singapore are pulling out all stops to win new customers.
Trust Bank and GXS Bank — two online retail banks launched last year — are offering lower fees, more incentives and waiving minimum account balances to win over customers from traditional banks.
Observers have previously raised questions about the need for digital banks in a largely banked population, where only 2% do not have bank accounts.
There’s also strong competition among the more established traditional banks.
“If you look at DBS Bank, it’s not like their digital offerings are [lousy],” said James Tan, managing partner of Quest Ventures, a VC company headquartered in Singapore.
Tan said he signed up for Trust Bank to see how different it will be to traditional banks. “I found no difference,” he told CNBC, adding that he eventually closed his Trust Bank account.
“I think the digital banks would have a higher rate of success if we were in a severely underbanked place like the Philippines,” said Tan.