Digital banks in Singapore are moving towards launching higher-margin products such as investment services and business loans.

A recent report by consulting firm Simon-Kucher revealed that while digital banks have attracted significant interest since their launch, many customer accounts remain inactive. According to the report, users often open accounts out of curiosity which is helped by fast onboarding via tools like Singpass, but fail to deposit funds or engage with banking services.

To boost customer activity, MariBank became the first digital bank in Singapore to roll out investment offerings, with Trust Bank and GXS expected to introduce similar features by 2025. The aim is to embed investment products into a broader, customer-centric platform that encourages consistent engagement.

Digital banks are also extending services to sole proprietors and micro-businesses, which are typically underserved by traditional banks due to higher perceived risk and cost. GXS and MariBank have begun targeting these segments by offering easier access to financing which is expected to close the lending gap in the MSME and SME markets.

Unlike traditional lenders that rely on external investors, digital banks can offer more competitive rates by leveraging their own liquidity. Their ability to track payment activity in real-time also allows for better risk assessment when issuing loans.

To strengthen their appeal to small businesses, digital banks are also exploring complementary services, including payment terminals, invoicing tools and cybersecurity solutions.

Most digital banks in Singapore are backed by larger ecosystems such as Trust Bank with NTUC and GXS with Grab and Singtel, but the report warns that growth will increasingly depend on reaching customers outside these networks.