An Introduction To The Singapore Banking System

Singapore has one of the world’s most advanced banking systems, recognized for its strong regulatory framework, financial stability, and high level of security. The sector includes both domestic and foreign banks that provide a broad range of financial services for individuals, businesses, and international investors.

All commercial banks operating in Singapore are regulated by the Monetary Authority of Singapore (MAS), which is responsible for maintaining the stability and integrity of the financial system. This article provides an overview of the Singapore banking structure and highlights an emerging category of financial institutions that is gaining traction in the city-state.

A glance at the Singapore banking system

Singapore hosts numerous multinational regional headquarters and provides a stable legal and business environment. As of 2026, the financial sector is increasingly shaped by digitalisation and artificial intelligence (AI).

Industry estimates suggest that GenAI could generate S$330–550 billion in annual value globally⁽¹⁾ . Singapore banks are therefore evolving into digital-first institutions while maintaining strong prudential standards.

There is hardly any other sector in the economy that contributes to this success more than its banking system does. The banking system of Singapore is widely known for providing world-class services for customers both inland and abroad.

• Security and stability: Banks operate under the supervision of the Monetary Authority of Singapore (MAS), which is widely regarded as one of the world’s most credible financial regulators.
• Confidentiality with regulatory transparency: Customer information is protected under Singapore banking laws, but banks must comply with anti-money laundering rules, international tax reporting standards, sanctions requirements, and lawful disclosure obligations. This balance between privacy and compliance has helped Singapore maintain its reputation as a trusted global financial center.

The overview of banking regulatory structure

Before you enter Singapore for incorporation, it’s important to understand how the banking system is regulated in the country. In this way, you can avoid unexpected mistakes while obtaining a bank account for your business.

In Singapore, all legislative bills go through the Parliament before effectively becoming a law or act. The banking sector has to comply with relevant banking legislation under the Monetary Authority of Singapore.

The Central Bank of Singapore

The Monetary Authority of Singapore (MAS) is the central bank of Singapore which was officially established in 1971. The MAS has the authority of overseeing all financial institutions in Singapore while ascertaining that the country’s price stability is aligned with the long-term development of the economy.

There are four main functions that the MAS holds:

• Implement monetary policies;
• Manage Official Foreign Reserves;
• Issue Singaporean currency;
• Oversee payment systems.

Major banking regulations

These legislations not only regulate the banking industry but also foster its growth as a leading global center. Here are some crucial acts governing Singapore’s banking system:

• Banking Act;
• Securities and Futures Act – used for the reference of regulations of the securities and derivatives sector;
• Payment Services Act;
• Monetary Authority of Singapore Act – used to establish the Monetary Authority of Singapore (MAS) and grants it the authority to regulate the industry of financial services in Singapore.

Types of banks in Singapore

Understanding the banking network helps you know how to determine an appropriate banking solution for your Singapore business. Each type of bank will be the suited option for certain types of business.

In Singapore, there are two main categories of banks – domestic and foreign. In general, domestic banks receive greater freedom to provide banking services than foreign banks.

However, the foreign bank community has also been allowed more leeway to expand their banking operations as they are part of the Singapore government’s liberalization program for the banking industry.

Domestic banks

As of now, local banks in Singapore provide a broad range of banking services, which may include current and savings accounts, payment services, credit and debit cards, mortgages, and business and personal loans, subject to the scope of their respective banking licences and applicable regulations.

There are three primary domestic banks in Singapore:

UOB was established in 1935 and is Singapore’s third-largest bank by total assets. The bank operates a regional network of more than 470 branches and offices across 19 markets in Asia Pacific, Europe, and North America. In Singapore, UOB is particularly well known for its digital banking products and deposit accounts.

OCBC (Oversea-Chinese Banking Corporation) was established in 1932 through the merger of three predecessor banks in Singapore. It is currently Singapore’s second-largest bank by total assets and operates an extensive regional network across 19 markets in Asia-Pacific, Europe, and the Middle East. In Singapore, OCBC is particularly known for its digital banking capabilities and savings products such as the OCBC 360 Account, offering tiered interest benefits based on eligible banking activities.

DBS was established in 1968 and is Singapore’s largest bank by total assets. Headquartered in Singapore, the bank operates across 19 markets in Asia, with a strong presence in Greater China, Southeast Asia, and South Asia. In Singapore, DBS is particularly known for its digital banking capabilities and broad range of corporate and consumer banking solutions.

Foreign banks

Full bank (FB) – foreign full banks may provide a broad range of commercial banking services. Selected foreign full banks receive Qualifying Full Bank (QFB) privileges, allowing them to operate up to 25 service locations and share ATM networks with other QFBs. Examples of QFBs include HSBC Bank (Singapore) Limited, Bank of China Limited, and Standard Chartered Bank (Singapore) Limited.

Wholesale bank (WB) – wholesale banks offer a range of services to large clients such as government agencies, large corporations, and other financial institutions. The services provided usually include currency conversion, mergers and acquisitions, consulting, and cash advances. Examples: National Australia Bank Ltd., Barclays Bank, Land Bank of Taiwan, and Korea Development Bank.

Offshore bank – offshore banks conduct their transactions through two different accounting units, the domestic banking units (DBU) and the Asian Currency Units. All offshore banks in Singapore function as branches of foreign banks. Examples include the Bank of Taiwan, Bank of New Zealand, Shinhan Bank, and Philippine National Bank.

Merchant bank – merchant banks in Singapore are licensed and regulated by MAS under the Banking Act 1970. They engage in a range of activities such as investment portfolio management, underwriting, and lending arrangement. Merchant banks do not accept deposits and borrowing from the general public except banks, finance companies, shareholders, and companies controlled by their shareholders. Examples: Schroder & Co. (Asia) Ltd., Siemens Bank GmbH Singapore Branch, Bordier & CIE (Singapore) Ltd., Axis Bank Ltd.

The emergence of digital banks

In the era of digitalization and the popularity of the offshore business, digital banking is a concerning element for foreign business owners. If you are an oversea entrepreneur, take a look at the following information to get a closer look at this banking type.

What is digital banking?

Digital banking is a new type in the Singapore banking system. It provides the same banking services as traditional banks except for having a physical establishment.

This type of service allows customers to have control over their savings and finances from their smartphones and other digital devices.

In 2020, the MAS announced that it has granted the license of digital banking to four companies and that 2022 will be the first year to commence this digital experience.

This move is aimed at further liberalizing the financial sector, making the nation’s digital economy keep pace with that of the world, and bringing more investment opportunities to foreign companies.

Types of digital banks

As of now, there are two types of digital banks – digital full banks and digital wholesale banks.

Digital full banks (DFB)

• Digital full banks can serve both retail and non-retail customers and provide services such as deposits and loans;
• Singapore has two digital full banks: GXS Bank and MariBank. These banks operate under MAS’ regulatory framework and provide digital banking services to retail and non-retail customers two digital full banks are GXS Bank and MariBank.

Digital wholesale banks (DWB)

• Digital Wholesale Banks are permitted to serve small and medium enterprises (SMEs) with non-retail banking services;
• ANEXT Bank and Green Link Digital Bank operate as digital-focused banks serving business and non-retail customers. Both are currently listed by MAS under the Wholesale Bank licence category⁽²⁾.

Effects of digital banks on the Singaporean economy

• Create a new type of technology-based service that can keep up with the fast pace development of the fintech sector;
• Provide banking services to underbanked communities who lack access to basic financial services;
• Create an opportunity for the digital banking industry itself to expand its customer base and have better insights into customer-centric products and services by establishing strategic partnerships with payment solution providers or e-commerce platforms.
• The digital banking industry will introduce an even more competitive environment to the traditional banking sector, driving banking entities to speed up digitalization and upgrade their personnel with adequate digital knowledge and skills.

Conclusion

The banking system of Singapore is one of the main reasons contributing to Singapore’s success as a global financial hub. The government has been introducing various policies to liberalize the financial industry and open a wider door to welcome investments from both local and foreign companies.

When you decide to land your company in Singapore, especially the financial services industry, understanding the country’s banking system will help you smoothen your business operations.

Should you have any questions regarding which type of bank to register that suits your business purpose, do not hesitate to contact us via service@bbcincorp.com.

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