MAS awards four digital bank licences

Major step to liberalise banking sector expected to boost services for retail and corporate clients

Digital banks will not have a physical presence and all banking services will be done online. PHOTOS: ST FILE, LIM YAOHUI, REUTERS, SEA LIMITED

Singapore will have four digital banks that enable customers to tap a greater variety of banking options from early 2022.

The Monetary Authority of Singapore (MAS) yesterday awarded digital full bank licences to the Grab-Singtel consortium and technology giant Sea.

Like traditional banks, they will offer retail customers services such as opening accounts, deposits as well as debit and credit cards. But they will not have a physical presence and all banking services will be done online. Digital full banks can also serve corporate customers.

Singapore's central bank will also grant digital wholesale bank (DWB) licences to Alibaba founder Jack Ma's Ant Group as well as a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management.

Greenland Financial is the investment arm of Chinese real estate developer and state-owned enterprise Greenland Group, while Linklogis Hong Kong is a supply chain financing firm.

Digital wholesale banks can serve corporates and small and medium-sized enterprises (SMEs).

Twenty-one applications for the digital banking licences were submitted, of which 14 were shortlisted earlier this year.

The four successful applicants, who are expected to start business from early 2022, beat contenders such as Razer Youth Bank and a consortium led by Osim founder Ron Sim's V3 Group and EZ-Link.

MAS chief Ravi Menon said the central bank applied a "rigorous, merit-based process to select a strong slate of digital banks".

"We expect them to thrive alongside the incumbent banks and raise the industry's bar in delivering quality financial services, particularly for currently underserved businesses and individuals," he said.

Successful applicants must meet relevant conditions before they get the licences. MAS will also review whether to grant more digital who-lesale bank licences in the future.

Mr Yuen Kuan Moon, group chief executive officer-designate of Singtel, said that with Singtel and Grab's combined digital expertise and customer knowledge, the consortium is well-placed to improve banking services for consumers and enterprises.

Mr Forrest Li, chairman and group chief executive officer of Sea, said the company looks forward to "further contributing to the long-term development of our nation's digital economy, creating more employment opportunities in Singapore and empowering our whole community to thrive in the digital era". The tech giant owns e-commerce platform Shopee, game developer Garena and digital payments arm SeaMoney.

Ant Group, which will be issued a DWB licence, said it would seek to make financial services more accessible for SMEs while supporting local talent development.

Incumbent players such as DBS, OCBC and UOB also congratulated the successful applicants.

Singapore is not alone in its digital banking push. Hong Kong issued four more virtual bank licences in May last year, bringing the total number of such licences to eight. The winners included Ant SME Services, a unit of Ant Group, and a Xiaomi-AMTD Group venture called Insight Fintech HK.

Countries such as the Philippines, China, Japan and South Korea also have virtual banks.

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A version of this article appeared in the print edition of The Straits Times on December 05, 2020, with the headline MAS awards four digital bank licences. Subscribe