Photo by Reyhan Aviseno on Unsplash
When the Monetary Authority of Singapore awarded four digital full bank licences in 2020, the conventional reading was that Singapore’s banking oligopoly was finally facing structural disruption. GXS Bank, backed by Grab and Singtel, and MariBank, owned by Sea Group, launched as the digital banks designed for the mass market. Trust Bank, a partnership between Standard Chartered and FairPrice Group, and ANEXT Bank, backed by Ant Group, targeted retail customers and small businesses respectively. The press coverage was confident that the incumbents would need to respond aggressively.
DBS, OCBC, and UOB responded by continuing to grow. Five years after the licence awards, the Singapore banking DBS OCBC UOB competitive moat remains intact. Combined, the three hold approximately 80 percent of resident deposits in Singapore according to MAS banking sector statistics, have expanded their regional footprints materially, and are posting returns on equity that most global banks would be willing to underperform their growth targets to achieve. The digital banks have attracted customers and have not attracted the deposit balances or product relationships that constitute genuine competitive displacement.
Understanding why the disruption did not happen is more instructive than noting that it did not.
How the MAS Designed the Digital Bank Licences
The digital full bank licences issued in 2020 came with structural constraints that limited the competitive surface area from the start. Digital full banks were subject to phased deposit caps that began at S$75 million in aggregate retail deposits and were scheduled to increase over time as each institution demonstrated operational stability and risk management competence. For context, DBS held over S$400 billion in total deposits across its operations as of its 2024 annual report.
The MAS has been explicit about its supervisory philosophy in publications including its Financial Stability Review. The regulator’s priority is financial stability and the maintenance of Singapore’s credibility as an international financial centre. The digital bank licensing process was designed to introduce competition at the margin while preserving systemic resilience. It was not designed to replicate the kind of rapid-disruption scenario that transformed retail banking in the United Kingdom, where challenger banks like Monzo and Revolut entered a market with weaker incumbent deposit concentration and a regulator more willing to accept operational risk in exchange for innovation.
This policy architecture reflects a considered position. Singapore’s banking system is small enough that a major institutional failure would have systemic consequences disproportionate to those in larger markets. The MAS calibrated the entry conditions to preserve optionality on disruption while managing systemic risk. The result is a competitive environment where digital banks can grow, serve specific segments well, and gradually build product capability, but cannot deploy the capital or take the deposit-funded risks that would allow them to challenge the incumbents at scale in the near term.
What the Three Banks Have Built That Cannot Be Replicated Quickly
The deposit base is the first layer of the moat. Current account and savings account deposits are the cheapest form of funding a bank can hold, and the three Singapore banks hold the large majority of the retail current account and savings account balances in Singapore. This is not simply a function of scale. It reflects the mortgage relationship. A household that has a 25-year home loan with DBS typically has its salary credited there, its savings held there, its insurance purchased there, and its investment products accessed through the same platform. The bank relationship deepens through the mortgage and produces a customer lifetime value that a digital bank offering higher deposit rates cannot easily displace because the switching cost is not purely financial. It is the friction of moving an entire financial relationship at once.
The second layer is regional infrastructure. DBS has built a substantial presence across Hong Kong, India, China, and Taiwan over two decades. OCBC has significant operations in Malaysia and Indonesia. UOB has one of the most extensive branch networks in the ASEAN region outside Singapore. As covered in our analysis of how Asian capital repositioning has benefited Singapore, the consolidation of Asian capital management in Singapore has added another dimension to the incumbents’ advantage: they are the preferred institutional counterparty for the family offices and institutional investors relocating to or through Singapore. GXS and MariBank do not yet operate in the institutional and private banking segments where this repositioning is most consequential.
The third layer is data. DBS, OCBC, and UOB hold decades of transaction data, credit history, and relationship data on Singapore residents and businesses. The credit decisioning, fraud detection, and product pricing models built on that data foundation cannot be replicated by an institution that has been operating for five years. The data advantage compounds with time, which means the structural gap between the incumbents and the digital banks in data-driven risk management is wider today than it was in 2020 and is likely to be wider still in 2025.
Where the Digital Banks Have Found Their Footing
It would be inaccurate to characterise the digital banks as failures. They have found customer segments where the incumbents have been less attentive and where digital-native service design generates genuine preference. GXS and MariBank have been effective at reaching gig economy workers and younger retail customers who have historically received minimal service from the incumbents. Trust Bank has embedded itself in the FairPrice Group ecosystem in a way that produces frequent engagement from customers who might otherwise have limited reasons to open a new bank account.
As explored in our analysis of why digital banks in Southeast Asia grow users but not revenue, the challenge that GXS, MariBank, and Trust face is common to digital banks across the region: customer acquisition costs are real but manageable, and revenue per customer in the mass market segment is thin. The path to profitability requires moving up-market into product relationships with better economics, precisely the territory where the incumbents are strongest.
The comparison to the UK or Australian experience, where challengers like Monzo, Starling, and Up have built genuine share in everyday banking, is instructive. Those challengers benefited from regulatory frameworks that imposed interoperability requirements on incumbents, making it easier to switch primary bank relationships. Singapore’s open banking framework is less aggressive, and the MAS has not mandated the kind of account portability that would lower the switching cost structurally.
The Lines Worth Watching
The incumbents’ position is durable without being permanent. The product categories where competitive dynamics are genuinely evolving are narrower than the headline digital bank narrative suggests.
Wealth management is the first. The growth of robo-advisory and digital investment platforms has attracted significant assets, and the three banks have responded by building their own digital wealth products, but the segment is contested in a way that retail deposits are not. The banks are investing aggressively here and the competition is coming from regional and global wealth managers as much as from digital challengers.
Cross-border payments is the second. The expansion of PayNow linkages across ASEAN countries and the growth of digital payment rails for trade and remittances create competitive surface area that did not exist when the incumbents built their current positions. Here the threat is systemic rather than from any single challenger.
SME banking is the third. ANEXT Bank and other digital lenders have found genuine gaps in the SME credit market that the three banks have historically underserved. The incumbents are aware of this and have invested in digital SME platforms, but the segment remains more competitive than retail.
The broader growth divergence across SEA economies, covered in our analysis of which markets are capturing growth and which are not, suggests that the regional expansion strategies of the three banks will encounter more varied environments in the next five years than in the last five. The competitive threat to the three banks’ domestic position is low. The question of which bank executes the regional opportunity most effectively is more open.
