Progress of Digital Banks in Incorporating Innovation to Serve Customer Needs and Reach Underserved Segments

1 Mr Derrick Goh asked the Prime Minister (a) what is the progress of our digital banks in incorporating innovation to serve customer needs and reach underserved segments thus far; (b) whether the COVID-19 pandemic has had a material impact on its progress; and (c) what further measures will MAS recommend for digital banks to accelerate greater financial inclusion in Singapore.

Mr Tharman Shanmugaratnam (for the Prime Minister): The digital banks have launched their operations in the recent months despite the challenges brought upon by COVID-19. The banks have started with a smaller product range to selected customer segments and will scale up, in tandem with their business and risk management capabilities.

Consumers and businesses in Singapore are, generally, well-served by our banking system. The incumbent banks have extended their customer reach by building partnerships and marketplaces, improved customer experience and expanded their digital offerings. The digital banks will add diversity and provide impetus for the existing banks to continue strengthening their own offerings.

The digital banks should be well-placed to leverage existing ecosystems to provide new features to customers and pilot innovations that may be tailored to specific segments of the population, such as gig workers or individuals without steady income. This should take time to materialise, as has been the case in other jurisdictions.