The new virtual bank, GXS, is opening to selected customers in Singapore, allowing them to make deposits and transfer funds
At the end of 2019, Singtel announced that it had struck a partnership with local super start-up Grab, seeking to obtain a digital banking licence from the Singaporean government.
The joint venture, now called GXS, is owned 60% by Grab and 40% by Singtel.
GXS was successful in its quest for a licence around one a year later, with the Singaporean government allocating it a licence that would allow it to receive customer deposits and offer services to both retail and corporate customers.
Rival Singaporean tech firm Sea was also awarded a licence.
Now, GXS is ready to launch officially, offering new customers a variety of incentives, including the opportunity to earn interest daily.
GXS services will be accessed by customers directly via the GXS app, though Grab says it ultimately hopes to incorporate GXS into their own super-app.
For now, the app is being rolled out only to selected employees and under-banked customers related to GXS, Grab, and Singtel themselves, with a public launch to take place at an undisclosed future date.
GXS customers will be able to deposit up to SG$5,000 (~$3,577) in their main GXS account, with a daily interest rate of 0.08% per annum.
They will also be able to create “savings pockets” within the app, setting aside funds to be used for a specific goal. These “pockets” will have daily interest rates of 1.58% per annum, comparable to fixed term deposit rates in a traditional bank.
Singtel and Grab combined have a customer base of around three million people, with the company specifically targeting gig economy workers, like Grab’s food delivery staff, to grow GXS.
“GXS is a homegrown bank on a mission to support the needs of entrepreneurs, gig economy workers and early-jobbers in our community,” said GXS Singapore CEO Charles Wong.
One of the major barriers for gig economy workers when it comes to accessing banking services are the fees charged when accounts drop below a minimum balance threshold. GXS will charge no such fees, with customers not subject to a minimum balance in their account
Singtel and Grab will surely offer GXS a healthy source of initial customers, but a wider expansion could prove difficult; not only is the Singaporean banking market already highly competitive, but the ominous prospect of a global recession could make banking customers more cautious than ever.
Nonetheless, Singtel and Grab already appear to have ambitions of launching GXS in other Southeast Asian markets in the near future, having already been approved for a similar banking licence in Malaysia back in April.
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