In the Asia-Pacific region, Japan, South Korea as well as China already have digital banks in their markets.
Both Hong Kong and Taiwan issued digital bank licences also in 2019 and in second half of 2020, Singapore will also do so.
What's a digital bank? Think online travel agent
It's NOT to be confused with digital banking with the DBS or OCBC or UOB online banking services we use.
A digital bank will NOT have a physical front.
Shopping mall space is expensive to rent and banking staff is not cheap to hire.
Hence, it is a reduced cost approach will enable it to invest more on I.T. (hopefully)...
Think about online travel agents like Expedia.com or Booking.com!
Interaction with you almost entirely online.
Some of the most known applicants are as shown above.
There will be FIVE licenses granted of which TWO are FULL DIGITAL BANK LICENSE.
This is the one that will be retail level, collecting our deposits and dispersing our loans to us.
The other 3 are going to target businesses and SMEs...
Who do I like as a contender?
I certainly like Sheng Siong + Razor!
Check out video below! #bias
But really, I'd think the two favourites have to be
- GRAB + SINGTEL
Simply because they have such depth in Singapore database.
How it may benefit you as a retail customer
Do you want a digital bank that can offer you possibly better rates? According to consultancy firm JD Power, 2/3 of us would say yes.
Look at this below! HK's digital bank launched a delicious 6% rate for deposits to pull in initial customers!
If the Singapore's digital bank does the same, you should consider it strongly.
Singapore Savings Bonds rates really are NOT appealing moving forward.
Studying what fintech company Revolut is trying to promise in UK, it is likely that a better interface and tools will be developed to integrate your spending and saving tracking.
In addition, insurance and stock trading could be independently compared for you in the platform.
Lastly, even cryptocurrency deposits may be processed for you which is something traditional banks are not offering currently.
A traditional bank sees technology as a COST.
But a digital bank sees technology as its way to WIN MARKET SHARE A.k.a REVENUE!
I personally think it is a given that the integration with our other online needs will be better with a digital bank. But it is still up to you to save well and make good financial decisions.
If you are looking for advice on investing, check this post below