When GXS Bank’s Group CEO Lai Pei-Si bought her first home early in her career, applying for a renovation loan was a key part of the experience that she still keenly recalls.
Borrowing $27,000 from a bank to fund the renovation was a necessity — after already spending most of her money on buying the house — but the process was far from ideal.
“I had to take the [entire sum of] $27,000 upfront and incur interest from day one,” she says. This was even though contractors only required payment after renovation milestones were met, meaning that it would have been preferable to draw down the capital in phases.
At the same time, paying off the loan early would also incur penalties.
“It was quite surprising to me that when we looked at renovation loans, we realised it hasn’t changed much [even] after 30 years,” says Lai, who took on the role of group CEO in June this year.
Such inefficiencies are areas where Lai sees an opportunity for GXS Bank to differentiate itself and win customers over. “For us to win the market [share], to be able to differentiate, we truly have to solve their problems,” she explains.
See also: CapitaLand India Trust: Singapore’s gateway to investing in India
Ecosystem integration as a differentiator
Leveraging technology and data while being anchored to a broad ecosystem has been an important part of the group’s strategy to gain a foothold in the competitive banking industry.
“The industry is very well-served in many areas. However, our unique advantage is that we are part of an ecosystem that serves millions of Singaporeans. It was very clear to us that our business model had to have the ecosystem at the core,” Lai says.
See also: How MoneyMax is taking the pawnbroking industry into the future
Founded in 2020, GXS Bank — a 40:60 joint-venture of Mainboard-Listed Singapore Telecommunications (Singtel), and Nasdaq-Listed Grab Holdings — is one of four digital banks in Singapore that was awarded a banking licence from the Monetary Authority of Singapore (MAS), and it has been on the path to build out its services since.
Apart from the Singapore bank, the group is also present elsewhere in the region with its subsidiary GXBank in Malaysia, and Superbank, an Indonesian digital bank in which GXS Bank has a minority stake. Grab and Singtel are also shareholders in Superbank. Since launching in Singapore (2022), Malaysia (2023) and Indonesia (2024), GXS Group has rapidly grown its user base, reaching millions of customers across these markets.
“Many of our customers sign up with our digital banks through the ecosystem, and many of them stay with us also because of the ecosystem,” Lai observes, adding that a key opportunity lies in the unmet needs across the various markets.
For instance, about 80% of Indonesia’s market and 55% of Malaysia’s are underserved, while Singapore has a smaller but distinct underserved segment, including gig economy workers and micro small- and medium-sized enterprises (SMEs) lacking credit bureau records.
GXS Bank aims to provide credit and banking services to customers with limited or no credit history by leveraging alternative data, such as ecosystem data, to enrich credit models and manage risk.
“Our technology enables us to start small, because the cost of service is lower,” Lai says. Being embedded in an ecosystem also provides the bank with data that helps it with credit and risk innovation to differentiate itself in the market.
Embracing innovations that serve its consumer and business customers’ needs will be important to drive success for the bank, amid the competitive landscape.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
In the context of renovation loans, for example, the bank’s GXS FlexiLoan is designed to enable customers, who have obtained approval for the loan quantum, to draw down only the capital they currently require. Early repayment also does not incur any penalties.
“We took a traditional product and changed its features in a way so that it solves a problem,” Lai says. “If we are very thoughtful about the problem that we are trying to solve with today’s technology, and keep in mind our intention to always do the best for the customer, we will be able to come up with new things.”
Achieving scale and profitability
Over the past five years since GXS Bank was founded, the group has been on a mission to build up its product suite.
Prior to taking on the role as GXS Group CEO, Lai headed the Malaysian subsidiary GXBank for more than three years.
“We built three banks in two years… from zero to one to ensure the foundation is there,” she says, adding that this prepares the group for further growth.
The group has experienced some initial success in getting customers to embrace its products. Since launch, it has attracted over 5 million customers across Indonesia, Malaysia and Singapore. Lai sees this as just the beginning.
“Our team will say that 2025 and 2026 is about scaling,” Lai says. “Scaling to 10 times of where we were before.”
As part of its growth strategy, GXS Bank has also been exploring acquisitions and partnerships that expand its capabilities. In April, the group acquired fintech company Validus Capital — one of Singapore’s largest digital lending platforms for SMEs. The acquisition has expanded the bank’s product capabilities for SMEs ranging from working capital loans to trade finance.
Lai continues to see opportunities for GXS Bank to partner other like-minded fintechs. The most attractive ones would be those that provide complementary capabilities, as well as ecosystem access.
“Imagine if you have a partner that has as big an ecosystem like what we have with Grab and Singtel. The potential for both parties to amplify our reach will be immense. That would be another big thing that we will look at,” she says.
A key ambition for GXS Group in the coming years is to be able to break even. In its FY2024 ended Dec 31, GXS Group (which comprises GXS Bank and GXBank) generated total income of $32.1 million, around double that of the previous year. Its net loss for the year rose slightly by 2.9% to $214 million, largely due to prudent credit reserves on the lending activity as the group fortifies its balance sheet for future loan growth. Its operating costs remained relatively flat y-o-y.
The group is aiming for both topline growth and cost efficiencies to reach its goal of profitability. After spending the past few years building up its regional technology, data and product suites, most of the bank’s infrastructure is already in place, and costs are expected to have peaked.
“It’s not going to be easy,” Lai acknowledges. “But it’s a challenge that we have taken on because we want to have a sustainable business.”
Leading through challenges
Before joining the GXS Group, Lai was a veteran banker at Standard Chartered Bank for over two decades, holding senior leadership roles.
Leaving an established senior position to build and scale up a new bank may not be everyone’s cup of tea, but the ability to start from a blank sheet was what attracted Lai.
“You get to change and make a difference. The impact is even greater and faster, because you have no shackles and no legacy,” she says.
The ability to build a business that caters to underserved segments also resonated. Growing up as a daughter of a schoolteacher mother who taught in a small Malaysian town, Lai saw first-hand the impact of helping others.
“We used to foster kids in my home, so besides the four of us — I’ve got three other siblings — there were always other kids at home,” she says. “I’ve seen how being able to have access to education [or] financial support changes the lives of yourself and the next generation.”
Even so, building a bank from scratch has not been easy, and Lai acknowledges that there is no such thing as a crisis-free day.
“I was the first employee for GXBank, and I needed to set up my team. I thought that I knew how to build that having been in banking for so many years,” she recalls. “But I couldn’t do it on my own. You do need the right set of people with the right mindset and the right competencies.”
As the leader of a large organisation, clarity remains a key focus, and Lai still closely follows the advice that was once shared by a mentor.
“When I take on a new role, I write a farewell speech that I would deliver if I were to actually leave that role. What it does is gives me a compass that guides what I want to achieve,” she shares. “That was the best advice I’ve ever got.”
Just three months into her current role as GXS group CEO, the farewell letter is still in the process of being penned, but Lai is already thinking of the words that she wants on that page.
“I want to be proud of the organisation, and the organisation that we’ve built has to be able to withstand and accommodate changes, because change is a constant,” she says.
“I want us to be ‘The Digital Bank’ in Southeast Asia.”
Raphael Lim is associate director for research and FinLit at SGX Group
About GXS Bank
GXS Bank is a digital bank focused on making banking better for the everyday consumer and businesses. It aims to improve financial inclusion and to drive financial revolution for its customers through the secure and ethical use of technology and data. GXS Bank holds a banking licence issued by the MAS.
It is owned by a consortium consisting of Grab Holdings — Southeast Asia’s leading super app, and Singtel — Asia’s leading communications technology group. As part of a regional network of digital banks, GXS Bank also works closely with GXBank, its digital bank subsidiary in Malaysia, and Superbank, a digital bank in Indonesia. For more information, please visit https://www.gxs.com.sg/.
About kopi-C: the Company brew
kopi-C is a regular column by SGX Research that features C-level executives of leading companies. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations
