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SINGAPORE – Chinese financial technology giant Ant Group and a consortium that included Grab and Singapore Telecommunications were among the four groups that received digital banking licenses from Singapore’s central bank, allowing them to offer a variety of services and a boost your fintech credentials.
The other winners announced Friday by Singapore’s Monetary Authority are the country’s e-commerce and gaming group Sea and a consortium that includes China’s Greenland Financial Holdings.
The central bank will issue full banking licenses to the Grab-Singtel and Sea consortium, and wholesale banking licenses, which do not allow retail services, to the other two parties.
Ravi Menon, managing director of MAS, said in a statement: “We expect that they will prosper alongside established banks and raise the bar in the industry in providing quality financial services, particularly for currently underserved businesses and individuals. They will still strengthen. plus Singapore’s financial sector. ” for the digital economy of the future “.
According to the central bank, the Grab-Singtel alliance, 60% and 40% respectively, and Sea were “clearly stronger” than the other full bank applicants.
As for digital wholesale banks, “the two applicants were assessed to be demonstrably stronger on all criteria, despite the overall high quality of eligible applicants,” the central bank said. “MAS will review if it grants more [wholesale] licenses in the future, “he added.
The winners are expected to begin offering banking services in early 2022.
For Ant, the Singapore license means a new opportunity for his overseas expansion, a much-needed boost after he shelved last month what was to be the world’s largest initial public offering due to increased Chinese regulatory scrutiny. Singapore-based merchants using Alipay could be potential clients of Ant’s digital banking services.
MAS ‘Menon previously said in a Bloomberg interview that the regulatory tightening in China will not have an impact on digital banks in Singapore. Grab, whose core private transportation business was hit hard by the pandemic, is increasingly expanding its financial services. Grab’s partner Singtel also has a mobile payment service in Singapore.
The Grab-Singtel alliance told reporters in an online briefing on Friday night that its bank will serve unbanked customers, such as young professionals, concert workers and micro, small and medium-sized businesses. They also revealed that they have hired a former Citigroup banker as CEO of the digital banking company that will employ 200 people at the start of services.
Reuben Lai, director of Grab’s finance division, emphasized that the consortium already has a large customer base through its existing services, so their cost of customer acquisition will be low, allowing them to be profitable from the start. . “Unlike other banks, we are taking advantage of ecosystems that are extremely evolved,” he said.
The Grab-Singtel consortium will compete with Sea in the digital banking space, as the most valuable listed company in the city-state will also target young people and SMEs. “[We] have the honor of being selected by the [MAS] for the granting of a full digital banking license and for having the opportunity to offer digital banking services that address the underserved financial needs of young consumers and SMEs in Singapore, ”said Forrest Li, Chairman and CEO of Sea Group.
The fourth winner is a consortium consisting of the Greenland group, Linklogis Hong Kong and the Beijing Co-operative Equity Investment Fund Management Co. unit, lost in their bids. TikTok owner ByteDance was also reportedly one of the applicants.
Last year, the central bank announced the auction and attracted 21 applicants for up to five licenses. Last June, it said that 14 of the 21 applicants had gone on to the next round of evaluation, without revealing names.
The tender attracted the attention of local and foreign companies eager to obtain a license in Singapore, known for its high regulatory standards.
The fintech realm of the digital economy was a hotbed of innovation long before the COVID-19 pandemic, which has only sped things up, giving service providers a push to expand their financial offerings from wealth management to loans and insurance.
The city-state financial market is dominated by three large local banks, DBS Group Holdings, Oversea-Chinese Banking Corp. and United Overseas Bank. But the parties that fought for licenses were looking to seize opportunities derived from underserved customers, such as small merchants and young people.
Additionally, the licenses, which come with the Singapore halo, have the potential to move winners to better positions when other countries hold similar auctions. The central banks of Malaysia and the Philippines are already planning to issue digital banking licenses to newcomers.
“Many ASEAN countries are watching Singapore’s digital banking race with great interest,” said Zennon Kapron, director of Singapore-based financial research firm Kapronasia. “Any company that can get a license in Singapore will likely get through it more easily as it expands to other ASEAN markets.
Friday’s announcement comes just before the city-state will host a week-long virtual and physical fintech event starting Monday that is expected to attract industry leaders. The new digital banking scheme will likely be a topic during the event.
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