[Updated on 5 December 2020 with new licensees]
The Grab Singtel consortium and the e-commerce giant Sea – the parent company of Shopee – have just received the full digital banking license issued by the Monetary Authority of Singapore (MAS).
The company has also licensed digital wholesale banks to Jack Ma’s Ant Group and a consortium of Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management.
With the opening of digital banking license applications, Singapore is taking a huge step forward in the fintech industry as non-banks enter the market and serve consumers and businesses for the first time.
MAS was first announced in June 2019 and issues a total of five licenses: two digital full banking licenses with which licensees can serve private customers and make deposits, and three digital wholesale banking licenses for small and medium-sized enterprises (SMEs). and non-retail segments.
The four successful applicants beat ten other applicants, such as the Razer Youth Bank and the Beyond consortium led by the V3 group of Osim founder Ron Sim and EZ-Link.
What does the license allow them?
With the new digital banking license, the two companies can now offer private customers services such as account openings, deposits, and debit and credit cards.
Digital full banks can also serve corporate customers.
However, all banking services are provided online – there are no physical branches or ATMs.
According to MAS, the new digital banks are expected to start operating from 2022.
The licenses are currently being introduced as a pilot project, so MAS is examining whether more licenses should be granted for digital wholesale banks in the future.
Ravi Menon, managing director of MAS, said in a statement that they used a “rigorous, performance-based process to select a strong group of digital banks.”
“We expect them to thrive alongside incumbent banks and raise the industry bar for delivering quality financial services, especially to currently underserved businesses and individuals. They will further strengthen Singapore’s financial sector for the digital economy of the future, ”he added.
Anthony Tan, Group CEO and Co-Founder of Grab / Image Credit: Digital New Asia
Anthony Tan, Group CEO and Co-Founder of Grab, said they “are honored to take this opportunity to build Singapore’s next generation digital bank and provide access to easy-to-understand and relevant financial services.”
“With Grab and Singtel’s combined experience in meeting the everyday needs of Singaporeans, as well as our extensive technical expertise and data-driven insights, the digital bank will further our goal of empowering more people, better control of their money and better economic outcomes achieve results for themselves, their businesses and families. “
Shee Tse Koon, Country Head of DBS Bank in Singapore, commented on the new entrants in the digital banking sector and welcomed them.
“We believe that the new entrants will spur us all on to achieve better results, and we will continue to focus on making banking more intuitive and invisible so our customers can live more and do less banking,” she said.
Selected image source: Reuters / Singtel / Sea / Chen Zhongqiu via Getty Images