As the COVID-19 pandemic continues well into 2021, we are also continuing to see its long-term impact across various industries around the world. Arguably, the most significant impact is the acceleration of digitization of, well, everything. Because social distancing is the best security from the coronavirus—after the vaccine, of course—staying home became the norm for the most part of 2020. And staying at home meant that people relied heavily on online services for their basic needs such as food and errands such as paying bills and banking. This is why, among the many industries, banking is among the first to truly take advantage of digital technology.
As we envision the post-pandemic world while more and more vaccination procedures are conducted every day, we are also thinking about how we can transform services such as banking. Today, there are financial institutions around Singapore that offer fast cash loans to those in need, eliminating all of the complicated red tape that other institutions impose on people. But with the growing digital banking, soon, banking transactions such as loans will never cause a headache anymore.
Singapore’s New Four Digital Banking Services
Seeing the possibilities of digital banking in this day and age, the Monetary Authority of Singapore (MAS) awarded four digital banking licenses towards the end of 2020. Because the Singaporean government is taking the slow but steady transition to digital banking, the screening and selection process for these digital banks was rigorous and highly competitive.
A digital full bank was awarded to Grab-Singtel consortium. Grab, one of the world’s leading transport and delivery services, has over 200 million app downloads. Singtel is one of the most popular telecommunications services in Singapore, with over four million users. Because of this reach, it’s no wonder that the MAS awarded this partnership a digital full bank license. Sea Ltd. was also awarded by the MAS with a digital full bank license. Being in the gaming and e-commerce industries, it’s also not surprising that they were among the first fully digital banks in Singapore.
On other hand, digital wholesale bank licenses were awarded to Ant Group, and a consortium that includes Greenland Financial, Beijing Co-operative Equity Investment Fund Management, and Linklogis Hong Kong. Both of them are in the financial industry and are looking at the Chinese population as their target market.
With these banks now operating or will operate soon in Singapore, how exactly will Singaporeans benefit from their digital banking services?
Fast Transactions and Health Safety
One of the biggest pains of banking errands is that, on the worst days, it can take you a couple of hours to do your business. The long lines in the physical premises are usually the culprit. But another issue with traditional banks is that transactions also take some time even after we’ve conducted our business. For example, if we deposit some cash into our accounts, it can sometimes take a couple of hours or even in the next banking day before the deposited cash is reflected in our accounts.
But, with digital banking, these slow transactions won’t be an issue anymore. And a huge plus is that we can do everything in the comforts of our couch, also ensuring our health safety from the coronavirus. All we would need is a phone or a computer, and an Internet connection.
“Greater financial inclusion” is among the top reasons why companies in Singapore are ushering the city-state into the new era of digital banking. This way, no matter where they are in the city-state, people can acquire the services of the digital bank for their choice. Again, all they will need are a phone or a computer and an Internet connection. As the MAS said back in 2019, the digital banking framework will “add diversity and help strengthen Singapore’s banking system in the digital economy of the future.”
More Personalized Banking Services
Another key benefit of digital banking in Singapore is the possibility of more personalized banking services. Through data and technology, banks can take into account their clients’ spending habits. The data collected will help banks curate their services that will best fit each of their client’s unique interests.
Because Singapore has been shaping up to become the leading tech hub in Asia, it’s not surprising that the Singaporean government is leading the charge towards a digital future, starting with banking. We all know, or at least have an idea, how a digital economy can benefit an entire country. But understanding how each client can benefit from these kinds of services is the key to making sure that this modern banking system will prevail.