Who will win the race to be Singapore’s digital banks?
A total of 21 applications for digital bank licences have been received by the Monetary Authority of Singapore (MAS), the authority said on Tuesday (Jan 7).
In a statement, MAS revealed that the 21 applications comprised of seven digital full bank licence applications, and 14 applications for digital wholesale bank licences.
But it will be a tough fight for all – there are only two digital full bank licences and three digital wholesale bank licences available for issue.
Applications for digital bank licences closed on December 31, 2019.
MAS expects to announce successful applicants by June 2020, with the new digital banks slated to begin operations in mid-2021.
Singapore’s central bank also said that the new digital licences have “attracted strong interest from a diverse group of applicants”. They include e-commerce firms, technology and telecommunications companies, fintech firms and financial institutions.
According to the statement, the “majority of applicants are consortiums, with entities seeking to combine their individual strengths to enhance the digital bank’s value proposition”.
Some of the consortiums who have gone public with their bid include a Grab-Singtel partnership, a Razer-led one, and another led by V3 Group and EZ-Link, which also includes the Singapore Business Federation (SBF) and property developer Far East Organisation.
Although all three consortiums are vying for a digital full-bank licence, they all have different aims.
If successful, Grab and Singtel’s digital bank will focus on digital first consumers and small to medium-sized enterprises (SMEs).
Razer’s consortium, which comprises Sheng Shiong Holdings and venture capital firm Insignia Ventures Partners among others, plans to build the “world’s first global youth bank”.
Named Razer Youth Bank, it is aimed at addressing the underserved youth and millennials segment.
Lastly, the proposed digital bank by the V3 Group consortium will have a focus on SMEs.
According to MAS, a digital full bank licence will allow for the consortiums to lend money to other companies and individuals, as well as serve retail customers.
As for digital wholesale banks, they are only allowed to serve SMEs and other non-retail segments.
- The biggest consortium to apply for a digital banking licence so far includes EZ-Link, V3 Group, Singapore Business Federation and more
- Razer Fintech plans to build ‘world’s first global youth bank’ targeting youth and millennials
- Grab and Singtel have jointly applied for a digital bank licence in Singapore