The Monetary Authority of Singapore (MAS) announced late Friday the long-awaited winners of the city-state’s digital bank licences.
A Grab-Singtel tie-up and Sea Ltd have received permits to form digital full banks, while Ant Group and a Greenland Financial consortium landed digital wholesale bank licences. The consortium led by Greenland Financial, which is the investment arm of state-owned Chinese real estate developer Greenland Group, included Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management.
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.
Foreign firms can hold a majority stake in digital wholesale banks and the paid-up capital requirement is significantly lower at S$100 million.
MAS said the criteria for landing a licence included the value proposition of the business model, the use of innovative technology to reach underserved segments, the ability to manage a prudent and sustainable business and growth prospects.
The central bank added it also looked at the impact of the COVID-19 pandemic on assumptions used in financial projections.
“MAS applied a rigorous, merit-based process to select a strong slate of digital banks,” Ravi Menon, managing director of MAS, said in a statement posted on the central bank’s website. “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 added.
MAS is providing in-principle approval, with the licence winners expected to start operations in early 2022.
The successful bidders for the licences are obliged to serve the so-called “underbanked” in Singapore — the youth, and small-to-medium enterprises (SMEs), which lack access to financing. The winners are also generally expected to use the licence as a stepping stone to regional expansion.
Ant Group pointed to its accumulated experience in setting up digital financial services, particularly in China, where it works with financial institutions to serve SMEs.
“As a leading provider of technology-driven inclusive financial services, our mission is to make it easy to do business anywhere through innovative technology,” Ant Group said in a statement.
Regional ride-hailing super app Grab and telecom Singtel pointed to their expertise with both technology and serving consumers.
Anthony Tan, group CEO and co-founder of Grab, said in a statement: “With Grab and Singtel’s combined experience in meeting the everyday needs of Singaporeans… the digital bank will further our goal to empower more people to gain better control of their money and achieve better economic outcomes for themselves, their businesses and families.”
Razer loses out
A consortium led by Hong Kong-listed gaming hardware maker Razer’s fintech arm Razer Fintech, which was a closely-watched applicant, didn’t make the final cut.
The consortium which had pitched the Razer Youth Bank included Sheng Siong Holdings, FWD, Linksure Global, Insignia Ventures Partners and Carro.
Razer Fintech’s CEO Lee Li Meng said that it still intended to roll out Razer Youth Bank in markets where it already had a strong user base, such as in Malaysia and the Philippines, or in Europe, the Middle East or Latin America. “While awaiting the results of the Singapore licence, we have already been engaging other jurisdictions in parallel,” Lee said in a statement.