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SINGAPORE – The Monetary Authority of Singapore (MAS) granted full digital banking licenses to the Grab-Singtel consortium and tech giant Sea on Friday (December 4), a first for the city-state and a long-awaited measure aimed at liberalizing the financial industry.
Like traditional banks, these players will provide retail clients with services such as account opening, deposit, and debit and credit card issuance.
However, digital banks will not have a physical presence and all banking services will be done online.
This is different from traditional banks, such as DBS, OCBC, and UOB, which offer some banking services through the Internet or mobile applications.
Full digital banks can also serve corporate clients.
Singapore’s central bank also issued digital wholesale banking licenses to Ant Group, as well as a consortium made up of Greenland Financial Holdings, Linklogis Hong Kong, and Beijing Co-operative Equity Investment Fund Management.
These parts can serve corporations and small and medium-sized businesses.
MAS said in a statement on Friday that successful applicants must meet all relevant prudential requirements and license preconditions before MAS will issue their banking licenses.
The four new licensees beat out 10 other competitors, including Razer Youth Bank; and a consortium led by the V3 group of Osim founder Ron Sim, and EZ-Link.
They are expected to start operating in early 2022.
MAS chief Ravi Menon said the central bank applied a “rigorous and merit-based process to select a robust list of digital banks.”
“We hope that they will thrive alongside traditional banks and raise the bar in the industry in delivering quality financial services, particularly for currently underserved businesses and individuals. They will further strengthen Singapore’s financial sector for the digital economy of the future. “, said.
Singapore is not alone in its digital banking push.
Hong Kong issued four more virtual banking licenses in May last year, bringing the total number of such licenses to eight. The winners included Ant SME Services, a unit of Ant Group, and a Xiaomi-AMTD Group company called Insight Fintech HK.
Countries like the Philippines, China, Japan, and South Korea also have virtual banks.
21 applications for digital banking licenses were submitted in Singapore and MAS said it could grant up to five. Of these, 14 met the eligibility criteria, MAS said in June without disclosing the names of the contenders.
The following is a list of applicants, including new licensees and contenders who had made their offer public.
Full digital banking licenses:
– Tech giant Sea, owner of e-commerce platform Shopee, game developer Garena, and digital payments arm SeaMoney.
– Grab and Singtel submitted a joint application. Grab will have a 60 percent stake and the telecoms giant will have the remaining 40 percent in the consortium.
– Razer Youth Bank. Gaming firm Razer’s application was through a consortium that includes Sheng Siong Holdings, technology firm LinkSure Global, auto market Carro, insurer FWD and Insignia Ventures Partners. Razer Fintech owns 60 percent of the consortium.
– Beyond consortium, led by Osim founder Ron Sim’s V3 Group and payment company EZ-Link. It also includes the Temasek Heliconia unit, the property developer Far East Organization and the Singapore Business Federation.
Wholesale digital banking licenses:
– Ant Financial backed by Alibaba
– A consortium comprising Hong Kong financial services group AMTD, peer-to-peer lending platform finance companies, Singapore public service provider SP Group and Xiaomi Finance
– A consortium led by mainboard-listed wealth management company iFast Corporation with two Chinese partners, digital banking operator Yillion Group and fintech company Hande Group.
– ByteDance Technology, which owns the TikTok video sharing app
– A consortium made up of Hong Kong-listed supply chain finance company Sheng Ye Capital, financial conglomerate Phillip Capital, and artificial intelligence firm Advance.AI. All three members are owned or run by Singaporeans.
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