Bank Categs in Singapore Revealed Analyzing the Diverse Banking System of a Financial Hub

How Are Banks Classified in Singapore? Exploring the Diverse Banking System of a Financial Hub

As one of the world's leading international financial centers, Singapore has attracted numerous global financial institutions due to its stable environment, robust regulatory framework, and highly open market. In this city-state, the banking system is not only diverse and comprehensive but also highly specialized, forming a critical pillar supporting its global financial status. So, how exactly are banks classified in Singapore, and what roles do they play? This article will unveil the mysteries behind Singapore’s sophisticated banking structure.

I. The Basic Structure of Singapore’s Banking System

According to the Monetary Authority of Singapore MAS, Singapore's banking system is primarily divided into three categories Full Banks, Wholesale Banks, and Digital Banks. These bank types differ in terms of business scope, target customers, and regulatory requirements, collectively forming a diversified and efficient financial services network.

1. Full Bank

Full Banks are the most common type of bank in Singapore and hold the broadest range of licenses. They offer both retail banking services-such as savings, loans, and credit cards-to individual customers, as well as corporate banking services-including corporate lending, trade finance, and investment banking-to businesses.

Currently, there are seven Full Banks in Singapore, including three major local banks DBS Bank, OCBC Bank, and UOB, along with international banks such as Citibank, HSBC, and Standard Chartered. These banks typically operate extensive branch and ATM networks across the country, serving as the primary financial backbone for most Singapore residents in their daily transactions.

2. Wholesale Bank

Wholesale Banks mainly serve corporate clients and institutional investors and are not permitted to engage in retail banking activities targeting individuals. These banks often specialize in areas such as international trade financing, foreign exchange trading, treasury management, and project financing.

As of recent years, Singapore is home to around 40 Wholesale Banks, including branches of internationally renowned financial institutions such as Morgan Stanley, Deutsche Bank, and BNP Paribas. These banks contribute significantly to capital market liquidity and provide strong financial support for multinational corporations operating in the Asia-Pacific region.

3. Digital Bank

With the rapid development of financial technology, Singapore has become one of the first countries globally to implement a digital banking license regime. In 2025, MAS issued four digital bank licenses, including two Digital Full Bank licenses and two Digital Wholesale Bank licenses.

The licensed entities include both tech subsidiaries of traditional financial institutions and emerging technology companies, such as Grab and Sea Group. Digital Banks operate entirely online without physical branches, emphasizing artificial intelligence, big data analytics, and blockchain technologies to enhance user experience and operational efficiency. This new model is reshaping the competitive landscape of Singapore’s banking industry and offering consumers more personalized and intelligent financial services.

II. Characteristics and Advantages of Singapore’s Banking System

Singapore’s banking system has earned a prominent place on the global financial stage due to several key features

1. Highly Diversified Banking Structure

From traditional banks to digital banks, and from local institutions to foreign banks, Singapore’s banking system exhibits high diversity. This variety meets the needs of different customer segments and enhances the overall stability of the financial system.

2. Strong Regulatory Framework

The Monetary Authority of Singapore MAS serves as the unified regulator, enforcing strict yet effective oversight. Using a risk-based supervision approach, MAS ensures banks remain stable while allowing room for innovation. Additionally, MAS actively promotes green finance and sustainable finance, positioning Singapore at the forefront of global financial governance.

3. Technology-Driven Financial Innovation

Singapore places great emphasis on fintech development, establishing multiple innovation labs and incubation platforms to encourage collaboration between banks and technology firms. For example, MAS launched the Global-Asia Innovation Corridor initiative to foster cross-border fintech cooperation and strengthen regional innovation capabilities.

4. Openness to Foreign Banks

Singapore maintains an open policy toward foreign banks, allowing them to establish branches or subsidiaries as long as they meet regulatory standards. This openness has attracted many international banks to set up regional headquarters in Singapore, reinforcing its role as a financial hub in the Asia-Pacific region.

III. Recent Developments Accelerated Digital Banking Rollout and Growing Fintech Momentum

In 2025, Singapore’s digital banking sector has seen significant progress. Media reports indicate that several licensed digital banks have begun offering full services, with steady growth in user numbers. For instance, GrabFinance Korea Bank GFKB, a joint venture between Grab and South Korea’s Kookmin Bank, has officially launched operations in Singapore, focusing on younger demographics with flexible micro-loans and high-yield deposit products.

Meanwhile, MAS continues to advance its Financial Sector Technology Roadmap, encouraging banks to invest more in cloud computing, artificial intelligence, and cybersecurity. According to reports from Lianhe Zaobao, Singapore’s fintech investments exceeded S$2 billion in 2025-an all-time high-and reflecting strong market confidence in the future of financial technology.

IV. Conclusion

The success of Singapore’s banking system is not accidental-it results from long-term policy guidance, market openness, and continuous technological innovation. From traditional Full Banks and Wholesale Banks to the emerging Digital Banks, each plays a vital and irreplaceable role within the financial ecosystem.

Looking ahead, as the global financial landscape continues to evolve, Singapore is well-positioned to lead regional financial innovation and deliver increasingly efficient, convenient, and secure financial services to clients worldwide.