Guide to wholesale banking in Singapore

Business owners in Singapore have a variety of banks to choose from, and it’s important to be aware of what each financial institution can offer. Wholesale banks make up nearly 50% of banks in Singapore, with 97 banks.¹ Large institutions use wholesale banking to manage complex financial needs – but is it right for your business?

Keep reading to learn more about wholesale banking in Singapore and the services they offer. We’ll also explore how the Airwallex Business Account can help SMEs and growing businesses transact globally.

What is wholesale banking?

In Singapore, wholesale banking is a specialised branch of banking that caters exclusively to multinational corporations (MNCs), government agencies, and other financial institutions. It focuses on handling large-scale transactions, managing risks, and providing access to substantial amounts of capital.

Unlike other types of banks in Singapore, wholesale banks are licensed to serve businesses only and can't offer financial services to individuals or retail consumers.² 

Barclays, Morgan Stanley, and UBS are examples of wholesale banks in Singapore.³

Wholesale bank vs full bank

The difference between wholesale banks vs full banks is the customers they serve. 

A full bank in Singapore is licensed by the Monetary Authority of Singapore (MAS) to provide financial services to both retail consumers and businesses. 

For individuals, they provide personal banking services like savings accounts, mortgages, and credit cards. Meanwhile, small-to-medium enterprises (SMEs) can use full banks for specialised solutions like business accounts, payroll services, and corporate cards. 

DBS, OCBC, and UOB are examples of full banks in Singapore.

What's the difference between wholesale banking vs retail banking vs commercial banking?

Wholesale banking, retail banking, and commercial banking serve different clients and financial needs. Here’s a quick breakdown of how they differ:

• Wholesale banking. Serves institutional clients like MNCs and investment firms, by providing specialised services like structured financing for large global projects, and expertise in mergers and acquisitions. It’s designed for businesses with complex financial needs and high transaction values.

• Retail banking. Also known as personal banking, retail banks serve individual consumers with savings accounts, loans, credit cards, and insurance. This is the type of banking most people use for their everyday financial needs.

• Commercial banking. Also known as SME banking or business banking, commercial banking serves individual businesses with solutions like business accounts, loans, and payroll services.  

While wholesale banking services are tailored for institutional clients with complex needs. However, businesses of all sizes can use fintech platforms like Airwallex to expand overseas and manage their global entities. 

Wholesale banking services

Wholesale banks excel at these specialised services:

• Trade financing. This is an umbrella term for services that help businesses address unique risks in global trade like currency fluctuations and political instability.⁴ For example, a wholesale bank might create a tailored agreement to finance a cross-border energy project so that the transaction is protected from exchange rate volatility or geopolitical risks in the countries involved. In contrast, trade finance from commercial banks is more standardised and focuses on routine trade needs, like ensuring timely payments or securing goods.

• Structured financing. Loans from wholesale banks are typically large-scale and tailored to fund long-term projects, commonly used for syndicated loans, where a group of banks jointly provide funding to a single borrower, with a wholesale bank leading the deal. For example, a wholesale bank might provide a syndicated loan to fund the construction of a renewable energy plant, structured to align with the project's timeline and risks.

• Treasury and cash management. Treasury services help businesses manage cash flow and optimize liquidity, ensuring they have enough funds for daily operations. These services include cash flow forecasting, multi-currency liquidity management, and hedging strategies to protect against financial risks.⁵

• Capital raising. Wholesale banks help businesses secure large-scale funding through bond underwriting, syndicated loans, and equity offerings. Unlike commercial banks that offer standardised loans, wholesale banks provide tailored financial solutions for complex funding needs. For example, a wholesale bank might structure a bond issuance to raise billions for a new airport development.

• Risk management. Wholesale banks help businesses protect against financial risks such as currency fluctuations, interest rate changes, and commodity price volatility. They use advanced risk models like Value at Risk (VaR) to estimate potential losses and recommend hedging strategies. For example, if a company is exposed to foreign exchange risks in a large trade deal, the bank might use hedging instruments to minimise losses.

Advantages and disadvantages of wholesale banking

Like any financial service, wholesale banking comes with advantages and challenges. Understanding its pros and cons can help businesses decide if wholesale banking is right for them.

Pros of wholesale banking

• Access to large-scale financing. Wholesale banks have the resources, expertise, and networks to provide high-value loans. They can pool funds from multiple sources, such as other banks, to offer substantial loans for capital-intensive projects like infrastructure or energy. Unlike commercial banks, wholesale banks specialise in structuring and managing these large deals, often including services like risk assessment and bond underwriting.

• Tailored financial solutions for complex business needs. Wholesale banking provides customised services to meet the unique needs of large corporations and institutions. Let’s say a client needs to execute a multi-million-dollar infrastructure project., the bank might create a dedicated project treasury management system to track and manage funds from multiple investors and lenders. This solution could include real-time cash flow monitoring and automated disbursements based on project milestones. 

• Global connectivity and expertise. Wholesale banks often have extensive global networks and expertise in international markets, which enable trade and infrastructure development. For example, French wholesale bank Société Générale is collaborating with the Asian Development Bank to finance the construction of three wind farms in Vietnam.  Beyond funding, these partnerships bring international expertise, risk management strategies, and financial structuring to support large-scale projects in emerging markets.⁶ 

• Expert risk management. Wholesale banks help businesses mitigate financial risks through tools like hedging and trade financing. By locking in foreign exchange rates, companies can stabilize costs when operating in volatile international markets. These banks also provide interest rate hedging, commodity price protection, and structured risk management strategies to safeguard businesses from unpredictable financial fluctuations.

• Strong due diligence and safeguards. Due to the complexity and scale of transactions, wholesale banking requires strict regulatory compliance and strong due diligence processes. These banks have advanced risk management systems, compliance frameworks, and financial safeguards in place to manage global transactions securely and efficiently.

• Strong infrastructure to support wholesale payments. Wholesale banks are built to settle high-value transactions and operate within a connected ecosystem of banks and financial market infrastructures (FMIs). They facilitate large-scale payments through corporate payment systems like Large-Value Payments Systems (LVPS) in the USA and High-Value Clearing Systems (HVCS) in Australia and New Zealand.  

Cons of wholesale banking

• Limited accessibility. Wholesale banking services are built to serve large corporations and institutions. Their financial services are not designed to help smaller players grow. 

• Complexity of services. The services offered by wholesale banks are often complex and require significant expertise to navigate. For businesses without a strong finance team, understanding and using these services effectively can be a challenge.

• Use of legacy technology. Some large wholesale banks still struggle with siloed operations, making it difficult to get a complete view of a client's business across various services. Many also rely on outdated legacy systems that limit their flexibility and adaptability. This can prevent them from providing real-time responses and cloud-based solutions. 

• Exposure to macroeconomic risks. The wholesale banking industry is closely tied to economic cycles, making it sensitive to changes like interest rate hikes. Higher interest rates can reduce demand for corporate loans, while fewer private equity deals and high debt costs may weaken the mergers and acquisitions pipeline. 

Wholesale banking license in Singapore

The MAS introduced wholesale banking licences in Singapore in January 2002, replacing the earlier Restricted Bank and Qualifying Offshore Bank licences.⁷ This shift aimed to better represent the broad range of activities wholesale banks can undertake. 

The MAS oversees the regulation and licensing of wholesale banks to ensure the stability and integrity of the financial system. These financial institutions must follow strict licensing criteria, including compliance with capital adequacy requirements, risk management practices, and anti-money laundering measures. 

By doing so, MAS ensures that wholesale banks operate responsibly while fostering innovation and competition in the financial sector.  

Digital wholesale banks in Singapore

Digital banks in Singapore are part of the MAS’s initiative to embrace innovation and improve the finance sector's resilience. The digital bank licence framework allows companies to operate as digital full banks (DFB) or digital wholesale banks (DWB), even if they don’t have prior banking experience.⁸

Like traditional wholesale banks, DWBs are restricted to serving businesses and non-retail customers. However, their services are designed for SMEs rather than institutional clients.  

Currently, there are two licensed DWBs in Singapore:

ANEXT Bank

ANEXT Bank provides financial services tailored to SMEs. It offers a business account and financing solutions to help SMEs manage their cash flow. SMEs can also keep their SGD, EUR and USD funds in fixed deposit accounts.⁹ ANEXT is a subsidiary of Ant Group, a Chinese fintech company known for its digital platform Alipay. 

Green Link Digital Bank

Green Link Digital Bank is the first digital bank in Singapore.¹⁰ They support SMEs with banking services like business accounts, payments, and loans. On top of this, Green Link offers more complex products like trade financing and supply chain finance.¹¹

Consider Airwallex for your business’s global financial operations 

We’ve just explored wholesale banks in Singapore and the financial products they offer. While wholesale banks cater effectively to large corporations, their services may be inappropriate for businesses who don’t have large-scale needs.

However, alternative institutions like Airwallex have similar services designed for businesses of all sizes. The Airwallex Business Account is an all-in-one platform for SMEs and enterprises seeking to grow their global footprint, with products that mirror some services offered by wholesale banks:

• Multi-currency accounts with local bank details. With Airwallex, there’s no need to open bank accounts in markets where you operate. You can instantly open a local currency account in more than 60 countries and start receiving funds in 23+ currencies.

• Foreign exchange risk management. Airwallex’s FX Solutions minimise currency risk by locking in FX rates and tailoring settlement dates to suit your business requirements. This lets you manage short-term risks from cross-border payments as well as long-term risks from extended contracts and other financial commitments.

• Multi-entity management. Airwallex gives you a central platform to manage finances for your global entities. Instead of viewing each market’s local bank dashboard, you get a unified view of your global finances. You can also create global spend controls across your organisation and review and approve global expenses in one place.

On top of these, Airwallex has solutions to support your business’ day-to-day operations through:

• Fast, cost-effective international transfers. Pay zero or close to zero fees for international transfers to 120+ countries when you use local payment rails. 90% of transfers arrive on the same day.

• eCommerce payment gateway. With Airwallex, you can accept online payments from customers in 180+ countries and 160+ local payment methods, such as Alipay in China. Our payment gateway seamlessly integrates with leading eCommerce platforms like Shopify.

• Unlimited virtual and physical debit cards. Enjoy no foreign transaction fees with the Airwallex Borderless Card. You also get 1% unlimited cashback on all local and international spend, on all categories like SaaS subscriptions or travel expenses. (Terms & conditions apply)

• Expense Management. Instantly view, monitor and approve employee expenses through our built-in Expense Management platform.

• Bill payments. Automate your local and international bill payments with Bill Pay. Upload, approve, pay, and reconcile your invoices all within your Airwallex Business Account.

• Accounting software integrations. If you use Xero, Netsuite, or Quickbooks, you can integrate these with Airwallex and automate your monthly reconciliation.

We help over 150,000 businesses around the world simplify their global financial operations. Open a free Airwallex Business Account account today, or talk to our team to find out how Airwallex can help you achieve your 2025 growth targets.

Frequently asked questions

1. What is the difference between a full bank licence and a wholesale banking in Singapore?

The difference between a full bank licence and a wholesale banking licence in Singapore is the scope of services they're allowed to offer and their target clients. A full bank licence allows banks to provide a wide range of financial services to both individuals and businesses. In contrast, a wholesale banking licence is focused solely on serving corporate and institutional clients with specialised services like trade financing and treasury management. In Singapore, wholesale banks can offer the same services as full banks, without engaging in SGD-denominated retail banking activities.

2. What are the differences between digital wholesale banks and traditional wholesale banks? 

The difference between digital wholesale banks and traditional wholesale banks in Singapore is in their operational models and service delivery. Digital wholesale banks operate entirely online, leveraging technology to provide banking services without the need for physical branches. In contrast, traditional wholesale banks rely on a combination of digital tools and physical infrastructure to serve corporate and institutional clients, which may involve more manual processes and in-person interactions.

3. Why is treasury management important in wholesale banking?

Treasury management is important in wholesale banking because it helps businesses efficiently manage their liquidity. By optimising the use of funds and ensuring sufficient reserves, it enables businesses to meet their operational and strategic needs. This is particularly critical in wholesale banking, where clients often deal with large-scale, complex transactions that require precise financial planning.

4. What compliance and regulatory challenges do wholesale banks face?

Wholesale banks face significant compliance and regulatory challenges due to the complexity of their operations and the strict requirements of financial authorities. Like other banks, they must adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, manage cross-border compliance, and ensure transparency in large-scale transactions. They must also adhere to the MAS’ guidelines for the operation of wholesale banks.¹²

5. What is the role of fintech in modernising wholesale banking?

Fintech is modernising wholesale banking by introducing technologies that streamline operations and improve client experiences. By leveraging innovations such as artificial intelligence, fintech enables wholesale banks to automate processes like credit underwriting, reduce costs, and offer more personalised services.¹³

Sources

1. https://eservices.mas.gov.sg/fid

2. https://www.mas.gov.sg/regulation/banking/types-of-deposit-taking-institutions

3. https://www.abs.org.sg/about-us/memberbanks

4. https://www.investopedia.com/terms/t/tradefinance.asp

5. https://en.wikipedia.org/wiki/Treasury_services

6. https://www.societegenerale.lu/en/societe-generale-luxembourg/press-release-news/press-release-news/news/powering-vietnam-energy-transition/

7. https://www.abs.org.sg/about-us/membership

8. https://www.mas.gov.sg/regulation/banking/digital-bank-licence

9. https://www.anext.com.sg/

10. https://www.straitstimes.com/business/banking/green-link-launches-as-singapores-first-digital-bank

11. https://www.glbank.com/en/index.html

12. https://www.mas.gov.sg/-/media/mas/resource/legislation_guidelines/banks/guidelines/guidelines-for-operation-of-wholesale-banks.pdf

13. https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/five-themes-for-transforming-wholesale-banking-operations-and-technology 

This publication does not constitute legal, tax, or professional advice from Airwallex nor substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.