No time like the present for GXS to address banking pain points for Singapore’s consumers
I REFER to “Digibank GXS entering consumer loans market at inopportune time” published in The Business Times on May 11, 2023.
At GXS, we believe that there is no time like the present to enter the consumer loans market for a couple of reasons.
The premise of the commentary is based on a simple comparison of the banks’ net interest margins (NIMs). As customary in the banking industry, our NIM is calculated based on a blended interest rate derived from the different loans and savings portfolios. Deriving GXS’ interest rate spread by assuming a flat rate is not only oversimplified, but also inaccurate.
Different conclusions may be drawn when the basis for comparison is different. In this instance, we will caution against the use of different parameters when comparing interest-rate spread between different products in the market.
The commentary also suggests that the higher interest rate environment disadvantages digital banks such as GXS, and that established financial institutions have a leg-up. Given that we too are operating within the same environment, the tide has lifted all boats, ours included.
What is key to note in this environment is that now, more than ever, is the best time to do what we can to address the pain points of consumers. We are actively focused on helping to reduce the pressure on them. We want to make banking better for them.
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We do this by removing some fees that are market practice today but which we believe do not serve the customer, such as fall-below fees for the GXS Savings Account and processing fees for the GXS FlexiLoan.
We do this by enabling GXS FlexiLoan customers to make early repayments on their loans without early repayment charges. Additionally, they enjoy interest savings when they make early repayments.
We do this because we believe that when our customers win, we win and profit does not need to come at their expense.
Maybelline Tan Head of public relations and corporate communications, GXS
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