SINGAPORE (THE BUSINESS TIMES) - The Monetary Authority of Singapore (MAS) on Tuesday (Jan 7) announced that it has received a total of 21 digital bank applications, with two-thirds for digital wholesale bank licences.

MAS is issuing up to five digital banking licences by June this year - up to two full bank licences that permit retail banking, and up to three for wholesale banking. The new digital banks are expected to start their operations by the middle of 2021.

This liberalisation - the largest for the financial sector in two decades - was first announced by the MAS in June last year. Applications closed on Dec 31, 2019.

MAS received a total of 21 digital bank applications. Of the seven applications submitted for the full bank licences, three have been made public. Meanwhile, out of the 14 applications submitted for wholesale bank licences, five have been reported by The Business Times

Below is a list of the contenders we know so far who have submitted their bids.

FOR DIGITAL FULL BANK LICENCE:

• Sea

Sea Limited, which owns e-commerce platform Shopee and game developer Garena, is the latest known contender for a full digital bank licence - and the only one known to be going it alone.

Announcing its entry into the race on Tuesday afternoon (Jan 7), Sea said that its core focus is on millennials and small and medium-sized enterprises (SMEs) in Singapore.

It intends to draw on its insights on the needs of these users from across the company's digital ecosystem to innovate processes, products and services for individuals and SMEs, the firm said.

• Grab and Singtel

Grab Holdings and Singtel on Dec 30 made public their joint application for a digital full bank licence. Ride-hailing Grab would hold a 60 per cent stake in the proposed consortium, with the telco giant holding the remaining 40 per cent. Both partners see finance as a "natural extension" of their core businesses, and aim to go mainstream with a close watch on cash burn.

• Razer Youth Bank

A consortium including Razer Fintech and Sheng Siong's founders has submitted an application for a digital full bank licence in Singapore, focusing on the "underserved youth and millennials segment" for its bid.

The consortium also includes insurance business FWD, Internet company LinkSure Global, tech venture fund Insignia Ventures Partners, and vehicle wholesale marketplace Carro. The Lim brothers who founded supermarket chain Sheng Siong are participating via their private vehicle Sheng Siong Holdings.

Razer Fintech will take up a 60 per cent stake in the consortium, with the remaining interest to be held by the other strategic partners.

• Beyond

In a surprise twist, the Singapore Business Federation (SBF) will be joining a consortium called Beyond, led by Ron Sim's V3 Group and stored-card operator EZ-Link, that is gunning for the digital full bank licence in Singapore.

Sources have told BT that SBF will be taking a small minority stake of below 10 per cent, in a move to support small and medium-sized enterprises (SMEs) in their funding needs.

Property group Far East Organization, Temasek-owned Heliconia Capital and insurer Mitsui Sumitomo Insurance are also participating in the consortium - making it the biggest seen thus far with six members.

In response to news of the SBF taking a minority stake in this consortium, SMEs say they welcome more options as securing financing is indeed a problem for them. However, some question whether a chamber that is supposed to be non-partisan should be taking sides in the digibank race.

FOR DIGITAL WHOLESALE BANK LICENCE:

• AMTD, Xiaomi Finance, SP Group, Funding Societies

Hong Kong financial services group AMTD Group has linked up with peer-to-peer lending platform Funding Societies, Singapore's leading utilities provider SP Group, and Xiaomi Finance to vie for a digital wholesale bank licence in Singapore. The interest also comes as the financial services firm had jointly secured a virtual banking licence with Xiaomi in Hong Kong last year.

• Ant Financial

Another strong contender is Alibaba-backed Ant Financial, which is seeking a wholesale bank licence as it ramps up efforts to expand outside the mainland. Singapore's move to open up the banking industry to tech companies comes after a similar move in Hong Kong, where Ant Financial and Chinese competitors including a Tencent Holdings joint venture, obtained digital banking licences last year.

• iFast Corporation, Hande & Yillion

Last week, mainboard listed wealth management firm iFast Corporation announced that it has led a consortium with two China partners - Yillion Group and Hande Group - to apply for a digital wholesale bank licence in Singapore.

Yillion operates one of four digital banks in China and counts Hong Kong-listed Internet firm Meituan Dianping as one of its key shareholders. Meanwhile, Hande is a China fintech company founded by Cao Tong, the former president of WeBank, China's first digital bank, that is also backed by Tencent.

The newly formed consortium is keen to tap the underbanked SME sector in Singapore.

• ByteDance Technology

China's ByteDance Technology, which owns the popular video-sharing app TikTok, is said to have applied for a wholesale digital banking licence in Singapore, BT reported last week. This comes as the firm - said to be world's largest tech start-up with a reported valuation of more than US$75 billion as at 2018 - had earlier signaled intentions to edge into financial services.

• Sheng Ye Capital, PhillipCapital, Advance.AI

Hong Kong-listed supply chain finance company Sheng Ye Capital teamed up with financial conglomerate Phillip Capital and fintech Advance.AI. All three consortium members are owned or led by Singaporeans.

Among the trio, Sheng Ye Capital and Advance.AI are backed by Temasek subsidiary Pavilion Capital. This consortium aims to build a data-driven "next generation" SME bank that will help businesses grow and expand into Asia, Sheng Ye Capital founder Jeff Tung told BT.

DROPOUTS

Along the way, there have also been companies that decided to pull out of the Singapore digibank race:

• OCBC, Validus Capital, Keppel Corp, Vertex Ventures

A prominent consortium comprising OCBC, Validus Capital, Keppel Corporation and Vertex Ventures has decided against applying for a digital wholesale banking licence. The late breakdown in talks, BT understands, comes amid Keppel's ongoing strategic review of its core operations, with Temasek Holdings due to take control of the conglomerate via a partial offer.

• Revolut

In November, payments fintech Revolut told BT it has closed the door to joining Singapore's digital bank landscape over high capital requirements. This comes even as the UK-based company has been in talks with "almost every single company" in Singapore that has mulled a digital banking licence, a Revolut spokesman said.

• Nium, formerly known as Instarem

Remittance start-up Instarem, recently rebranded as Nium, backed out from the contest for a wholesale banking licence to double down on its global business-to-business payments instead, Bloomberg reported in November. Singapore-based Nium was the first digital bank hopeful to publicly express its withdrawal, according to Bloomberg. The startup is backed by investors including Temasek Holdings unit Vertex Ventures and Rocket Internet.