Banks Tweak Foreign Currency Accounts to Attract Depositors
As fintech firms and telcos offer innovative solutions that allow clients to hold multiple currencies in their e-wallets and transact through them, banks are not standing still.
Local banks are considering various ways to make their multi currency accounts attractive, hoping this would make customer deposits grow, and stick with them. Hence, OCBC is considering the launch of a multi-currency account with a debit card function for overseas travel and online shopping in foreign currencies (FX).
«We are currently exploring various opportunities to enhance the FX needs of our customers for investments, education and even travel,» said Tan Siew Lee, head of wealth management Singapore at OCBC who was quoted in the «Business Times» (behind paywall).
Lower FX and Conversion Fees
In early 2017, DBS launched its multi-currency account that came attached with a Visa debit card, allowing account holders to change Singapore dollars into foreign currencies such as the Hong Kong dollar, the Australian dollar and the Thai baht.
By debiting directly in the foreign currency, account holders can avoid the high FX and conversion fees on their credit card spending overseas. DBS' debit card can be used for online purchases denominated in foreign currencies too.
Growing Usage
DBS had reported that the foreign-currency spend on the MCA Visa Debit card jumped by more than two times in 2018 from a year ago. To discourage a low balance in the multi-currency accounts, those customers whose balance falls below the average daily of S$3,000 would incur a S$5 charge monthly.
DBS said deposit balances in its multi-currency accounts have increased by more than 20 per cent in 2018 year on year.
Similar Accounts at UOB
UOB, which launched its multi-currency service called Mighty FX in January last year, has also seen surging demand for this service. It grew by an average of about 13 per cent month-on-month from January 2018 to January 2019. The average amount converted on Mighty FX stands at about S$1,430.
Users of this service only need a base savings account with UOB, and the minimum balance of those accounts can be just S$1,000. Aaron Chiew, head of digital and mobile, regional digital banking, at UOB, said many customers are using Mighty FX to change currencies in real-time, or to set alerts to convert the currencies at a rate they prefer.
