Grab-Led GXS Bank Launche First Digital Product In Singapore

GXS Bank, the digital bank joint venture between Malaysian ride hailing firm Grab Holdings and Singaporean telecommunication operator Singtel, unveiled its first financial product on Wednesday, almost two years after it was awarded a digital banking license from the Monetary Authority of Singapore.

The GXS Savings Account that the firm launched today will allow customers to earn interest daily with no minimum balance requirement.

GXS is aiming to provide its services to customers, including the underbanked segment, by leveraging the tech capabilities of both Grab and Singtel, which have platforms used by more than 3 million Singaporeans.

Charles Wong, Singapore CEO of GXS says the digital bank optimizes the basic savings account to support the needs of entrepreneurs, gig economy workers and early-jobbers. “Over the coming months, we will also tackle other obstacles that hinder consumers and small businesses from reaching their goals sooner, such as growing their wealth or accessing credit,” he said in the company’s statement.

Last April, Malaysia’s central bank awarded a digital banking license to a consortium between Grab, Singtel and Robert Kuok’s Kuok Brothers. A total of five licenses were awarded by the regulator at the time.

Grab reported a loss of $970 million in the first six months ended June 2022, compared to $1.4 billion during the same period a year earlier. Grab’s ride hailing and delivery business still have yet to turn a profit.

The company’s revenue in the first six months rose 39% to $549 million. Financial services contributed $13 million, accounting for 2.3% of its overall revenue, but it represents a jump of 94% from the same period in 2021.

Nirgunan Tiruchelvam, head of consumer equity research at Tellimer Research, said that digital banking is the “ideal way” for Grab to extend its reach into the financial services sector, particularly in Singapore which has one the highest smartphone penetration levels in the world. And investors are backing the move.

“Ride hailing and food delivery will be the mainstays of [Grab’s] revenue. But the market seems to value the the digital bank at a steep multiple to the total transaction value,” Tiruchelvam said.

Grab was cofounded by Anthony Tan and Hooi Ling Tan in 2012 as a taxi-booking app but has since grown to become a superapp which incorporates a variety of different services on its platform. It now operates in 480 cities in eight countries in the Southeast Asia.