POSB sees migrant worker account openings surge amid virus outbreak

DBS's POSB has recorded a jump of almost four times in the number of account openings for migrant workers in the month of April, as the Covid-19 pandemic adds to the urgency for migrant workers to have access to digital banking - a basic service that most Singaporeans take for granted.

With thousands quarantined since April, migrant workers without bank accounts - who would usually be paid their salaries in cash - could not receive their salaries, P'ing Lim, DBS's head of secured loans and deposits in Singapore told The Business Times.

To address this problem, the authorities on April 11 pushed employers with foreign workers residing in dormitories to pay salaries electronically, which led to a subsequent rise in account openings in POSB.

Following this, the bank processed 27,000 migrant worker accounts in four days. For the whole of April, it processed 41,000 accounts - the bank typically sets up about 11,000 to 13,000 a month.

POSB's target now is to bank all 750,000 migrant workers in Singapore by the end of this year, said Ms Lim. As it is, more than two-thirds of them already have accounts with the bank.

While migrant workers can technically open accounts with other banks, POSB has collaborated with the Ministry of Manpower (MOM) since 2014; it has invested in the integration with MOM's work-permit portal, which has enabled information to be transferred digitally and for account openings to be processed more quickly.

A NEWSLETTER FOR YOU

Friday, 8.30 am

SGSME

Get updates on Singapore's SME community, along with profiles, news and tips.

Sign Up

Since March, the bank has enabled end-to-end digital opening of accounts, which means that workers need not set foot in a bank branch to collect their ATM cards and pins.

"After the MOM advisory, there was an avalanche of applications coming through," said Ms Lim. "With the safe-distancing measures and workers unable to go to the branch, it was so opportune that we had all the infrastructure in place for us to do account openings at scale."

To cater to the needs of these migrant workers, a mobile application known as POSB Jolly was rolled out in 2017 to enable them to do SMS-banking. Through the app, users can check their account balances, top up their pre-paid mobile cards and remit their salaries back home. There are no additional fees charged for remittances.

With many migrant workers under quarantine, the app provides basic digital-banking services and enables them to still support their families back home without needing to go to an ATM machine or to the branches, she said. The bank has hit 520,000 downloads for the app so far.

Workers are also able to use the digital-banking app, but most prefer POSB Jolly due to a language barrier, she added. The app has five language options for them to choose from, namely English, Bahasa Indonesia, Bengali, Chinese and Tamil.

Some of the challenges the bank has faced engaging this segment in the past were these workers' "cultural bias towards cash" and remitting money through physical branches; financial literacy was also lacking, she added.

Since the Covid-19 pandemic broke out, the bank has recorded a rise in digital transactions by work-permit holders it serves, including foreign domestic workers.

In April, POSB saw a 45-per-cent increase in the number of remittance transactions for work-permit holder accounts compared with the month before. Year on year, the number has doubled from that in April 2019.

One of its users is Rana Shohel, a Bangladeshi migrant worker in the construction sector living in a dormitory. He told BT that he started using the POSB Jolly app a month ago, and has found it easy to navigate.

"If (there's a) lockdown, I can still send money to Bangladesh - no need to go Mustafa like last time," he said, referring to the 24-hour shopping mall in Little India frequented by foreign workers.  

He has also called the customer-service hotline for queries, which he said was helpful when he needed help in taking him through the transactions.

He uses English to communicate, but other workers who do not are served by customer-service representatives who speak other languages.

To keep this momentum going even amid the virus outbreak, the bank has distributed to all purpose-built dormitories how-to guides - in seven languages - on POSB Jolly and digital banking.  

Prior to the dormitory quarantines, POSB staff were mounting weekly roadshows to educate migrant workers on how to use digital-banking services; workshops were also run to teach them basic financial literacy and to alert them to the danger of scams.  

Ms Lim acknowledged that the migrant worker segment makes only a minimal contribution to DBS' topline, but said that the bank will continue to push for access to banking services for such marginalised groups.

Its goal of banking all migrant workers in Singapore by the end of this year is the bank's way of meeting the needs of the underserved. "POSB is always about financial inclusion and banking all segments of the community - this is a basic banking service and I think it is important that we support them," she added.

Migrant workers have been the hardest hit by the Covid-19 pandemic in Singapore, with those living in dormitories forming the majority of cases. More than 300,000 migrant workers live in dormitories here.

On Wednesday, there were 675 new Covid-19 cases, with migrant workers living in dormitories once more forming the bulk of them. This takes the total count to 25,346 cases in Singapore.