What Will A Grab-Singtel And Sea Digital Bank Look Like?
Last year, the Monetary Authority of Singapore (MAS) announced the granting of digital banking licenses to four winning applicants.
He awarded full digital banking licenses to the Grab-Singtel and Sea consortium, as well as digital wholesale banking licenses to Ant Group and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management. .
MAS’s intention is that a full digital bank may eventually be able to conduct all banking activities as existing banks, which aims to serve both individuals and businesses.
Like a traditional bank, digital banks provide Singaporeans with banking services such as account, deposits, loans, debit and credit cards, payments, and investment products.
While the concept isn’t new, it marks Singapore’s first foray into building digital banks.
Here’s what a Grab-Singtel and Sea digital bank could look like, along with the possible services and features it could offer once launched from 2022.
What Grab-Singtel digital bank could offer
Grab and Singtel first formed a consortium in December 2019 to apply for a digital banking license. The first holds a 60% stake in the entity, while the second holds a 40% stake.
The consortium aims to officially launch the digital bank in early 2022.
According to Grab, the consortium will focus on serving consumers and small businesses, starting with time-hungry young PMETs, on-demand workers with flexible incomes and micro-SMEs that have limited access to finance.
In addition, the consortium aims to provide these underserved groups with easy access to transparent financial services integrated into their daily activities, thereby helping them to improve their quality of life.
Grab currently offers a wide variety of lifestyle services – from food delivery and transportation to insurance – in its quest to become a super app.
On the other hand, Singtel has a subscriber base of around 4.3 million as of June 2020.
The two companies are likely to cross-sell services and deliver personalized experiences, due to the breadth and depth of their customer relationships and data analytics.
Therefore, it is reasonable to assume that Grab-Singtel digital bank customers will also enjoy benefits in these areas.
1. Automatic upgrade to Platinum status
Grab uses a tier system, in which users are rewarded based on the number of points they accumulate.
At the top of the tier system is Platinum, with users needing more than 4,500 points to qualify.
Grab-Singtel digital bank users may be automatically accelerated to Platinum status.
Some of the benefits of becoming a Platinum customer include an accelerated earning rate – Platinum users can earn double the reward points, which translates to more rewards.
They can also benefit from priority reservations for rides, discounts on airport meals and preferential rates for airport lounges.
2. Preferential delivery rates for GrabFood and GrabMart
Singaporeans are no strangers to GrabFood, one of the country’s largest food delivery services.
On the other hand, GrabMart allows users to purchase a wide variety of products ranging from fresh produce to health and beauty products, and have them delivered to their doorstep.
Since both of these services are widely used by Singaporeans, digital bank Grab-Singtel could offer preferential delivery rates to digital bank users to encourage them to join.
3. Instant approval of GrabLoans and GrabInsurance
As the name suggests, GrabLoans allows users to borrow money from trusted banking partners. It is supposed to be more affordable and flexible, and customers can also get benefits when applying for loans through Grab.
On the other hand, GrabInsurance offers travel insurance and coverage for Grab rides.
Called Ride Cover, this is a program that includes personal accident insurance and a late payment voucher.
Since The digital bank Grab-Singtel is likely to have the personal information of its users, the approval of loans and insurance can be quickly accelerated.
4. Self-invested interests in GrabInvest
GrabInvest is a micro-investment solution to make your GrabPay balance work while spending on Grab.
When users use qualifying Grab services, an additional amount of their choice is transferred from their GrabPay wallet and invested on their behalf.
As a user of the Grab-Singtel digital bank, it is likely that the user’s interest will automatically be invested in GrabInvest.
5. Preferential rate on Singtel mobile plans, early access to new products
Singtel is a multinational telecommunications conglomerate and one of the four major telecom operators operating in Singapore.
In addition, the telecommunications company has also invested in areas such as cybersecurity, which makes Singtel well positioned to embark on the digital banking business.
In addition, it is likely to offer preferential rates on its mobile plans and early access to new products to its digital banking customers.
Besides mobile plans, Singtel also offers a wide variety of products ranging from broadband to smart home solutions. These products could also be offered at preferential rates for its digital banking customers.
What the Sea Digital Bank could offer
Consumer internet company Sea offers a trio of digital services: gaming subsidiary Garena, e-commerce platform Shopee, as well as SeaMoney, which focuses on digital financial services.
With a plethora of digital services already at your fingertips, moving to digital banking seems like the next logical step for the tech company.
Additionally, pairing an e-wallet with an e-commerce platform is a proven approach that has worked for big names like Taobao and Alipay.
However, with a digital banking license, Sea can offer more than just payments.
Sea has a huge millennial customer base who use its gaming and e-commerce services, and having a bank account with Sea will be convenient for them.
1. Earn interest on Shopee coins
Shopee Coins are Shopee’s official virtual currency and are credited to buyers each time they have successfully purchased items from Shopee Mall sellers.
When purchasing on the Shopee platform, buyers will earn a Shopee Coin for every S $ spent. Coins can be used to offset future purchases, and every 100 coins entitles customers to one dollar off their purchase.
In addition to acquiring these coins through purchases, customers can also play games through the app or give reviews to earn more coins.
Sea’s digital bank users can expect to receive interest in the form of Shopee coins or earn coins after completing transactions on its digital bank.
2. Better rewards on Garena and Shopee
Garena is Sea’s online game developer and publisher. It distributes game titles on Garena + in various countries in Southeast Asia and Taiwan.
Some of its game titles include League of Legendsand online football game FIFA Online 3.
Like many gaming platforms, Garena players enjoy rewards in the form of in-game items or in-game currency.
Sea’s digital banking customers are likely to enjoy more rewards when they use their account to make gaming-related purchases, or even as a form of cash back when spending.
Likewise, customers can also expect rewards on Shopee in the form of discounted rates from select merchants or better cashback opportunities.
3. Reduced fees and privileged marketing exposure for retailers
The ease of selling on Shopee has prompted more sellers to sell their products on the platform. Anyone can easily set up a store in Shopee Marketplace without any hassle or difficulty.
Plus, according to a Shopee guide, store owners can start listing and selling products in just a few steps.
Shopee also awards certain sellers a “Preferred Seller” badge after analyzing certain criteria such as seller performance, customer reviews, reviews, and time taken to respond to chats.
This helps build credibility, which ultimately leads to increased sales for the sellers. Shopee sellers who are also users of Sea’s digital banks may benefit from an acceleration to become a Preferred Shopee seller.
In addition, Shopee also runs several in-app campaigns on a regular basis that help sellers increase exposure for their stores and products. For example, “My Campaigns” was created for sellers to name their products to be featured on the main or category pages.
To feature a product on these pages, sellers must go through a selection process. This process could be accelerated for sellers who use Sea’s digital banks.
These customers can also benefit from preferential rates on Shopee’s “My Ads”, which allows their products to have more visibility on the platform.
Now is the time for digital banking in Singapore
The COVID-19 pandemic has led to the rise of remote working and social distancing, which has highlighted the role of technology, data and contactless interactions.
From entertainment to shopping needs, digital tools have emerged as a way for many to lead their lives in the midst of the pandemic.
This can also be said for banking services, with more people going online to transact.
As such, it makes it easier for digital banks to enter the market, as many have internalized the new standard of doing daily business online.
Since digital banks are entirely branchless, users don’t have to go to a physical bank to be in touch with anyone.
Aside from ensuring security, it is also a convenient option for many, especially Millennials and Gen Z, who are well versed in using digital services.
In addition, opening up the sector to non-banking players such as Grab, Singtel and Sea will promote healthy competition, particularly in the field of digital innovations.
This will likely benefit consumers and businesses in Singapore, and we can soon start to expect innovations in the banking industry.
Featured Image Credit: Reuters / Singtel / SEA
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