Sizing up GXS and Trust, Singapore’s newly launched digital banks

Two digital banks were rolled out in Singapore last week: GXS and Trust. Their launches were a study in contrasts. 

Trust pulled out all the stops. Singapore’s deputy prime minister and finance minister (and prime minister-in-waiting), Lawrence Wong, was the guest of honor at the event, which was hosted by actress Eunice Olsen. The venue was packed, the music loud, and the confetti plentiful.

Trust launch event / Photo credit: Trust

GXS’s event was relatively muted in comparison. There were no VIPs, the crowd was far thinner (mostly press), and there was no confetti in sight.

Superficial differences, no doubt. But there are also real distinctions between the two companies – from their ecosystems, their target audience, to their product offerings. Getting the optimal combination of these factors will be crucial to succeeding in the small but affluent Singapore market.

Battle of the ecosystems

To build a sustainable business, the digital bank upstarts will have to ensure a positive marginal contribution from each additional customer. Key to this is lowering customer acquisition costs (CAC) and annual servicing expenses.

To lower CAC, the two banks can leverage on the unique ecosystems of their shareholders: Grab and Singtel for GXS and Standard Chartered Bank and FairPrice Group for Trust.

What do these players bring to the table?

First, their reputations in Singapore – all four are household names. Singtel and Standard Chartered, in particular, can trace their roots in the city-state back to the 19th century.

They are also well-regarded firms. BrandFinance, an organization that evaluates the strength and value of more than 5,000 global brands every year, found that Singtel’s brand is the strongest in Singapore, while FairPrice ranked 13th.

Singaporeans are more likely to trust that their money will be safe with the digital banks, as they are backed by these companies.

Second, these shareholders offer GXS and Trust access to their existing pool of customers. In its press release, GXS highlighted that more than three million Singaporeans use Grab and Singtel’s platform daily.

GXS CEO Charles Wong says that the Grab-Singtel ecosystem will provide the bank with “many opportunities for us to speak with our customers very frequently” since many use Grab’s app at least once a day.

Is regionalization an imperative?

Different product road maps