For more than a century, Standard Chartered Bank (StanChart) was better known for being the merchant bank funding UK traders plying the seas linking up the Empire.
StanChart may not sound like a likely contender for digital banks in Singapore, but the qualifying full bank (QFB) licence holder made its move by launching Trust Bank with FairPrice Group, just a day after GXS announced their debut. Trust’s shareholders — StanChart, FairPrice Group and NTUC Enterprise — together invested $400 million in the bank, with StanChart holding 60% and NTUC, 40%.
Trust’s launch effectively removed the supermarket chain’s multi-faceted banking links with Oversea-Chinese Banking Corp (OCBC). On Aug 31, a day before Trust kicked off, OCBC informed its NTUC Plus! Visa cardholders that the partnership will end on Jan 31, 2023.
Since the launch, FairPrice has actively promoted Trust’s services across its network of affiliated businesses including its supermarket. Trust CEO Dwaipayan Sadhu says the bank is able to lower its customer acquisition cost by leveraging on the FairPrice and NTUC consumer ecosystem, which is said to cater to one million customers nationwide each day through touchpoints including NTUC FairPrice, Unity, Kopitiam, Cheers and Income.
On Sept 13 — about two weeks after launch — Trust announced that it had reached 100,000 sign-ups from users aged 18 to 90. Unlike the holders of the digital full bank licence, Trust has the advantage of being able to provide ATM access for its customers, Dwaipayan explains.
They can withdraw cash from 19 of StanChart’s ATMs across Singapore, as well as one Trust ATM at VivoCity’s FairPrice Xtra. Dwaipayan clarifies that Trust is not selling any products for StanChart — the digital bank works completely independently. He believes that it has a very sustainable business model and unlike GXS, Trust does not have specific target client segments.
StanChart has been known to serve wealthy clients and focus on the affluent segment. Is Trust a way for StanChart to expand into other market segments? StanChart’s head of consumer, private and business banking (CPBB) business for Asia and global head for its digital business, Samir Subberwal, says the affluent and mass retail segments are the two strategic pillars for the bank’s CPBB business.
“For the mass retail segment, we want to deliver easy, everyday banking solutions simply, conveniently, and with a great customer experience. Our strategy is to serve these clients digitally, through partnerships, such as Trust Bank in partnership with FairPrice Group, and leveraging analytics and digital marketing to engage with them and grow our relationship,” he adds.
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While Trust will focus on the Singapore market instead of expanding its footprint regionally, StanChart has a different strategy. In September 2020, it launched MOX, a digital bank in Hong Kong offering a suite of retail banking services. This was in partnership with telecommunications companies PCCW and HKT, as well as Singapore-headquartered online travel agency Trip.com.
In Indonesia, StanChart partnered with Bukalapak to launch BukaTabungan, a digital banking service that leverages the reach of Bukalapak’s all-commerce platform. Announced on Sept 5, the service is powered by the technology of the StanChart nexus, its Banking as-a-Service (BaaS) solution. The digital banking service has received approval from the Indonesian Financial Services Authority (OJK), while StanChart is licensed and supervised by the OJK.
Says Samir: “In addition, our US$500 million [$702 million] 10-year strategic partnership with Atome to offer ‘buy now, pay later’ and lending services is expected to go live in three markets in the region later this year. We will continue to forge new partnerships and deepen existing ones to extend our reach and offer seamless and easy-to-use digital banking solutions.”