Grab-Singtel, Razer remain in digital bank race, Validus-OCBC-Keppel out

Photo by Afif Kusuma on Unsplash

The run-up to the Monetary Authority of Singapore’s (MAS) 31 December deadline for digital bank licence applications saw a flurry of submissions and last-minute pull-outs.

Razer applies for digital full bank licence

Hong Kong-listed gaming hardware maker Razer has submitted its bid for one of the two digital full bank licences to be issued by MAS in mid-2020. The submission was made by its fintech arm Razer Fintech to form Razer Youth Bank, which it said will cater to underserved youth and millennials.

According to a statement, Razer Youth Bank will be 60 per cent owned by Razer Fintech, with the remaining backed by a consortium of partners including Sheng Siong Holdings, FWD, Linksure Global, Insignia Ventures Partners and Carro.

“As a truly Singapore homegrown and global tech unicorn, we hope to be able to contribute to the growth of Singapore as a global financial centre to deliver a new-age and clearly differentiated digital banking proposition for Singaporeans and youth and millennials globally,” said Lee Li Meng, Chief Strategy Officer of Razer Inc. and CEO of Razer Fintech.

Razer Fintech currently operates two other verticals – digital wallet Razer Pay and a merchant division, Razer Merchant Services.

Grab-Singtel apply for full digital bank licence

Grab and Singtel have also applied for a full digital bank licence in Singapore. The two parties are forming a consortium, with Grab holding a 60 per cent stake and Singtel holding the remaining 40 per cent.

According to a statement, the duo aims to cater to the needs of digital-first consumers who expect greater convenience of personalisation. The lack of SME credit access is also a pain point that it hopes to address. Both regional powerhouses already have a range of financial services on hand, including Dash, VIA, GrabPay and GrabInsure.

“The core of Grab’s mission has always been to solve everyday challenges and unlock economic potential in Southeast Asia…The natural next step is to build a truly customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent and affordable,” said Reuben Lai, Senior Managing Director, Grab Financial Group.

Securing a digital bank licence also pushes Grab closer to its super app ambitions as it seeks to be a regional fintech player in Southeast Asia. The Singapore-based ride-hailing decacorn was last reported to be mulling spinning off Grab Financial to raise capital for it separately.

Today, Grab also offers food, package delivery services, as well as digital payments and financial services in 339 cities across 8 countries.

Ant Financial, ByteDance too in the race

Ant Financial submitted an application for a wholesale digital banking licence to the Singapore central bank, Bloomberg reported on Thursday. The licence will allow it to cater to corporate clients in the city-state.

China’s ByteDance Technology, which operates video-sharing app TikTok, is also said to have applied for a wholesale digital banking licence in Singapore, Business Times reported.

Singapore is offering two licences for full digital banks and contenders include Grab-Singtel and the Razer-led consortium. Full digital banks will be able to cater to all kinds of consumers. MAS requires them to be locally owned and meet the minimum paid-up capital of S$1.5 billion within three to five years’ time from commencement of business.

There are three other wholesale digital bank licences on offer, which Ant Financial has expressed interest in. Foreign firms can hold a majority stake in these digital banks and the paid-up capital requirement is significantly lower at S$100 million.

Validus, OCBC, Keppel bow out

Others, meanwhile, opted to bow out of the race.

According to a Business Times report, Validus Capital, OCBC Bank and Keppel Corp have pulled out of the race. The report added that Keppel is in the midst of a strategic review of its core operations, which hampered the talks.

The trio was seeking to bring together their expertise in financial services, logistics and shipping sectors. OCBC Bank is a regional bank based in Singapore that has typically been strong in SME lending, Keppel is an SGX-listed entity operating in offshore and marine, property, infrastructure and asset management, while Validus Capital is a Vertex Ventures-backed peer-to-peer platform offering finance solutions to SMEs.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.