As Singapore continues to attract global companies to establish their regional headquarters, opening a corporate bank account is often the first operational milestone. While traditional banks remain a staple for many businesses, the rapid rise of digital banks—offering streamlined online experiences—has made them an increasingly popular choice, especially among startups and SMEs.

But what exactly distinguishes a digital bank from a traditional bank? And how should companies determine the right banking partner based on their operational needs? This article breaks down the differences across three key dimensions: definitions, use cases, and onboarding processes—to help you make an informed decision when opening a corporate account in Singapore.

1. What Are Traditional Banks? And Who Should Use Them?

Traditional banks refer to licensed financial institutions with physical branches in Singapore, regulated directly by the Monetary Authority of Singapore (MAS). These banks typically have a long-standing history and provide a comprehensive suite of corporate banking services tailored for established companies with more complex financial needs.

Key services offered by traditional banks include:

• Multi-currency account management
• Trade financing, letters of credit (LCs), and bank guarantees
• Corporate loans and credit facilities
• Cheque accounts and cash management solutions
• High-value international transfers and settlement services

Recommended for:

• Companies engaged in high-volume or high-value international trade
• Businesses seeking financing, working capital loans, or credit lines
• Firms requiring fund custody or trust account services

That said, opening a corporate account with a traditional bank can be time-consuming. The onboarding process often involves detailed Know Your Customer (KYC) checks, due diligence documentation, and may include in-person interviews or requests for additional supporting materials.

2. Why Are Digital Banks Popular Among Startups?

Unlike traditional banks, digital banks operate entirely online, offering account setup, fund management, and transaction execution without the need for branch visits or legacy infrastructure. Built around principles of agility, efficiency, and accessibility, digital banks offer a “lightweight” model that appeals to lean and fast-moving companies.

Typical advantages of digital banks include:

• No minimum deposit requirements and faster onboarding
• Lower fee structures (zero monthly fees, no transfer charges)
• Automated KYC and digital verification
• Multi-currency support for global payments and collections
• Real-time notifications and transaction tracking

Ideal for:

• Early-stage startups and newly incorporated companies
• Service-based firms (e.g. consultancy, IT, education, creative industries)
• Businesses that operate cashless, do not use cheques, and rely on online payments
• Companies with remote teams or overseas clients

3. Before Opening a Corporate Account: Due Diligence Requirements

Regardless of whether you choose a digital or traditional bank, all corporate account openings in Singapore are subject to customer due diligence (CDD) and anti-money laundering (AML) checks. Banks must verify that clients have legitimate sources of funds and conduct lawful business activities.

Standard documentation typically includes:

• Company registration documents (BizFile), Constitution
• Identity and address proof for directors and ultimate beneficial owners (UBOs)
• Business profile, pitch deck, or corporate brochure
• Shareholding structure and source of funds
• Bank-provided KYC forms, risk declarations, and undertaking letters

Additional requirements may include:

• Online or in-person interviews
• Client contracts, invoices, or proof of incoming funds
• Website, marketing materials, or other operational evidence

For startups—especially those with no local employees or yet-to-launch revenues—banks may scrutinize client acquisition plans and the overall viability of the business model. It is therefore critical to prepare a clear structure, complete documentation, and a compelling business narrative to avoid delays or account rejections.

Final Thoughts

Whether you're a locally rooted Singaporean company or an international venture expanding across borders, choosing the right banking partner is the first step toward operational efficiency and compliance. In the era of "Banking 4.0", the distinction between digital and traditional is no longer binary. Instead, they are complementary options within a diversified financial ecosystem.

Understanding the characteristics of each banking model, aligning them with your company's stage and needs, and preparing thoroughly for due diligence are essential to a smooth and successful account opening.

If you would like tailored recommendations or professional assistance with account opening documentation, our expert team is here to guide you every step of the way.

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