Which new bank wins the race of digital banking licences?

An analyst says GXS Bank stood out amongst fresh entrants.

GXS Bank prevailed amongst the winners of Singapore’s digital banking licences who rolled out their new digital bank in the middle of the year, analysis from Malaysian banking firm RHB, showed.

Of the four new entrants, GXS Bank, which is the joint venture between ride-hailing firm, Grab, and telecom firm, Singtel, “ticked most of the boxes for a successful digital bank,” said RHB.

“GXS Bank will require $1.5b in capitalisation over several years as service offerings increase,” read the report.

The analyst said Grab-Singtel venture’s main standout is their ecosystems, including Singtel’s widespread footfall and Grab’s strong e-commerce presence. 

RHB also said GrabSingtel consortium is eyeing to open GXS Bank in the Lion City later this year.

Singtel is underappreciated

RHB also said it seems that Singtel's entry into the digital banking space is not getting much interest from investors due to the perception that digital bank forays will post losses in their early operations. 

“Still, we believe, Singtel offers investors an alternative and attractive exposure to the digital banking space,” the analyst added.

Singtel’s financial services also entered in other markets aside from Singapore, such as their 16.3% stake in Bank Fama International from Indonesia’s Elang Mahkota Teknologi and its consortium with Grab acquired one of the five digital bank licences that was granted by Bank Negara Malaysia.