Singapore’s digital banks finding their niche in areas like SMEs as they narrow losses in 2024

SINGAPORE – Singapore’s three digital banks serving retail customers – Trust Bank, GXS Bank and MariBank – appear on track to turn the corner more than two years after they started operations.

All three booked a smaller net loss in their most recent financial year ended Dec 31, 2024, compared with the previous financial year. 

Their path to profitability remains challenging though, said Mr Tengfu Li, vice-president and senior analyst in the financial institutions group at Moody’s Ratings.

He noted that the Singapore market is small and many already have banking accounts and access to banking services.

Despite the constraints, Trust Bank grew to become the fourth-largest retail bank by customer numbers in February, with around a million customers on its books.

The other two players, MariBank and GXS, said they are after a different pie from the incumbents.

The latest earnings reports from GXS, MariBank and Trust Bank show an improvement from the previous financial year. 

The trio report only full-year results so their latest earnings report was for the financial year ended Dec 31, 2024.

GXS incurred a loss of $145.4 million, compared with $152.1 million in the previous year.

MariBank booked a net loss of $51.3 million, an improvement of 1.7 per cent from its previous year when it had a loss of $52.2 million.

Trust Bank, which is 60 per cent owned by Standard Chartered Bank and 40 per cent by the enterprise arm of NTUC, recorded a net loss of $93.4 million, lower than the $128.4 million in the previous year.

Mr Tamma Febrian, director of the financial institutions group at Fitch Ratings Singapore, said it is within expectations for a start-up bank with four to five years of operations to still be making losses.

The retail banking space in Singapore is “fiercely competitive” and retail customers here are sensitive to prices, he added.

Digitalisation has also reduced transaction friction, allowing customers to switch between banking providers relatively easily whenever they find better deals elsewhere.

For example, when GXS announced that it will cut the interest rates on its main savings account to 1.08 per cent from Aug 6, some customers could be tempted to switch their funds to MariBank, which currently offers a relatively sweeter deal of 1.88 per cent a year. Customers can do so easily by just tapping on their phones. The money transfer is instantaneous, and this has been enabled by digitalisation.

Mr Febrian noted that a lot of these customers also view a digital banking account as complementary to their main banking account, which is typically held with an incumbent bank.

The digital banks know that they are operating in a crowded space.

MariBank chief executive officer Natalia Goh said Singapore is heavily banked and there is not really an unbanked or under-banked segment here. But “there are still certain market gaps and underserved needs” that are not met yet, she added.

Ms Lai Pei-Si, group chief executive of GXS, said the secret sauce for success will come from “finding that space” or the right target segment and solving the real problems for that customer segment.

She cited GXS FlexiLoan as an example of how the bank developed the personal loan product in response to the needs of its target segment, who are new borrowers with little or no credit history.

Ms Lai said 20 per cent of GXS’ customers belong to this group. They are not served well by the other banks, she said.

Mr Li from Moody’s Ratings said the three digital banks have started to scale up their loan books. 

“Apart from offering credit cards and personal loans to retail customers, Mari and GXS have also expanded their loan product suite to cover small and medium-sized businesses,” he added.

Non-interest income will also grow further as the digital banks distribute more insurance and investment products, he noted.

Besides expanding their product offering, the digital banks will need to leverage one of their key strengths – their ecosystem and a captive customer base, said Mr Li.

In Singapore, all three digital banks are part of a broader ecosystem. GXS is with Grab and Singtel, MariBank with Sea and e-commerce firm Shopee, while Trust Bank is with NTUC. This ecosystem approach enables them to deepen engagement with customers so they stay on their platform.

GXS works with its parent companies Grab and Singtel. Home owners get a data plan from Singtel when they move into a new home. They buy electrical appliances or new furniture through Grab, said Ms Lai. It is about offering “the entire end-to-end solution” to customers, she added.

In a similar vein, GXS launched an investment product on July 15 to give customers more choice over how they want to manage their savings with the bank. 

The GXS investment solution is a money market fund from asset manager Fullerton Fund Management and comes with group personal accident insurance coverage that is free for bank customers who invest in the fund.

Ms Jenn Ong, group head of retail at GXS, said customers are rate-seekers. If they find a better rate elsewhere, they will take their money out. By giving them more options, hopefully they will continue their wealth journey within the digital bank, she added.

Trust Bank launched its investment solution with five funds on Feb 21, 2025, while MariBank was the first of the three digital banks to offer an investment solution in September 2023.

MariBank now has two funds.

Ms Ong said GXS will be following up with another fund in the next six months. It will be higher risk for higher yields, but there is no decision yet on whether it will be a bond fund or a multi-asset fund that holds many different asset classes, such as stocks and bonds.

GXS and MariBank are digital full banks so they can serve both retail and non-retail customers.

Unlike its two digital rivals, Trust Bank holds a full bank licence that allows it to offer services similar to those at DBS Bank, OCBC Bank and UOB, including providing automated teller machines. 

Both GXS and MariBank have since gone into business banking for small and medium-sized enterprises (SMEs), and for micro, small and medium enterprises (MSMEs).

MariBank regards business banking as a natural extension of its range of services within its Sea and Shopee ecosystem.

Ms Goh said: “The whole idea is that the digital bank can serve them across their life cycle.”

It may be a consumer trying to buy products, or it may be a seller trying to manage their business cash flow and working capital for day-to-day business needs, she noted, adding that any customer or business outside the ecosystem can also tap the service offering. 

GXS acquired Validus Capital, a digital lending platform for SMEs, on April 14, 2025, and rebranded it to GXS Capital.

Ms Lai said GXS hopes to be able to “embed further into the Grab, Singtel ecosystem” to serve a wider pool of business customers.

Currently, GXS serves sole proprietorships in the open market and in the ecosystem. Ms Lai is aiming to extend its business offerings to other types of legal entities, such as private limited companies, “in a couple of months”.

Mr Li from Moody’s Ratings said the expansion into the business segment makes financial sense as SME lending is high-yielding. The digital banks can also earn fees by offering other services such as cash management, he added.

This will improve their chances of achieving the economies of scale required to break even, he noted. 

Fitch’s Mr Febrian sounded a note of caution.

“There is probably a good reason why banks like DBS, UOB and OCBC do not want to serve these high-risk players,” he said.

The digital banks will have to manage the credit costs associated with this segment of business borrowers, Mr Febrian added.