When Singapore opened its doors to digital banks in 2020, the move was hailed as a bold step towards reshaping the city-state’s financial sector. The Monetary Authority of Singapore (MAS) licensed a handful of new entrants — including ventures backed by Grab Holdings, Sea Group, and Standard Chartered — in hopes of sparking innovation, boosting competition, and expanding access to underbanked segments.
Four years later, the reality has proven far more challenging. Despite deep-pocketed backers, Singapore’s digital lenders have yet to turn a profit, and customer acquisition has fallen short of expectations. Meanwhile, the country’s “big three” legacy banks — DBS Group, United Overseas Bank (UOB), and Oversea-Chinese Banking Corporation (OCBC) — are reporting record earnings and expanding their customer base.
Industry analysts point to several reasons for the digital banks’ slow start. Singapore’s banking market is already highly developed, with more than 98% of adults holding a bank account. Unlike in other Asian markets where digital banks have thrived by serving the unbanked, Singapore’s population is already well-served by established players offering advanced mobile banking services.
“Digital banks here aren’t solving a market gap — they’re entering a space dominated by some of the most profitable and technologically advanced banks in the world,” said Marcus Tan, a Singapore-based fintech analyst. “That’s an incredibly tough playing field.”
The digital lenders have targeted younger consumers, gig economy workers, and small businesses with promises of lower fees, higher deposit rates, and easy app-based account opening. Grab’s GXS Bank, for instance, has offered competitive savings rates to lure deposits, while Sea’s MariBank has pushed microloans to small merchants. Standard Chartered’s Trust Bank has leaned heavily on rewards and discounts to drive sign-ups.
Yet customer loyalty remains elusive. Many consumers sign up for promotional offers, only to revert to their traditional banks for daily transactions and long-term savings. Analysts say the incumbents’ brand trust, extensive branch networks, and broad service offerings — from mortgages to wealth management — keep them firmly ahead.
DBS, UOB, and OCBC have also been anything but complacent. All three have invested heavily in digital transformation over the past decade, rolling out sleek mobile apps, instant payment services, AI-driven investment tools, and personalised customer engagement. DBS, Singapore’s largest lender, reported a record S$10.3 billion in net profit for 2024, crediting both strong lending margins and digital adoption.
“Singapore’s major banks have been preparing for the digital wave for years,” Tan added. “They didn’t wait for the fintechs to disrupt them — they disrupted themselves first.”
The profitability challenge for digital banks is compounded by MAS’s strict regulatory requirements. While digital lenders enjoy more flexibility than traditional banks in some areas, they must still meet rigorous capital, compliance, and risk management standards. That means high operating costs from the outset, even before building a substantial customer base.
Grab and Sea, both still focused on stabilising their broader businesses, have the financial muscle to sustain early losses. Standard Chartered’s Trust Bank also benefits from the resources of its multinational parent. But investors and management teams are aware that patience has limits.
“We are in this for the long haul, but sustainability is key,” a senior executive at one digital bank told reporters on condition of anonymity. “The focus now is on deepening relationships with the customers we already have, rather than chasing raw sign-up numbers.”
To turn the tide, digital banks are experimenting with niche offerings, from integrated ride-hailing and banking services to gamified savings plans. They are also leaning into partnerships with e-commerce platforms, insurers, and payment providers to embed financial services more seamlessly into daily life.
Still, the path to profitability will likely be measured in years, not months. Experts say that for digital banks in Singapore, survival in the short term depends on prudent cost control, targeted customer acquisition, and finding value propositions that traditional lenders cannot easily replicate.
As Tan summed it up: “The digital banks aren’t doomed — but they need to stop trying to be everything to everyone. In Singapore’s market, the winners will be those who find a sharp, clear niche and own it.”
For now, Singapore’s digital banks are still waiting for their big break, while their brick-and-mortar rivals continue to steam ahead.
