MAS unveils successful digital bank license applicants

The regulator signaled that it is open to granting more DWB licenses in the future.

The Monetary Authority of Singapore (MAS) has announced the four successful digital bank applicants that include the Grab-Singtel consortium as well as an entity owned by China’s Ant Group.

Two applicants were awarded a Digital Full Bank (DFB) license, one of which is a consortium that comprise of ride-hailing app Grab and telecommunications giant Singtel.

An entity owned by Sea Limited clinched the second DFB license. Sea is the parent of e-commerce giant Shopee.

Meanwhile, one of the two slots for a Digital Wholesale Bank (DWB) license was awarded to an entity owned by China’s fintech giant Ant Group, which recently made headlines after its $35b IPO was scrapped after Chinese regulators allegedly found anomalies and shortcomings in the group.

Also Read: Ant Group's IPO fiasco signals stricter fintech regulation in China: S&P

The final slot for the DWB license was awarded to a consortium comprising of Greenland Financial Holdings Group, a financial services and asset management firm backed by Chinese state-owned real estate company Greenland Holdings; Linklogis Hong Kong, which offers money lending services and supply chain financing; and the Beijing Co-operative Equity Investment Fund Management.

MAS previously announced that it would award banking licenses for up to two DFBs and three DWBs. Last June, the regulator revealed that it had whittled down the number of aspirants to 14, from 21 in the beginning.

It originally planned to award licenses by June, but deferred its decision to the second half of the year.

The applications were assessed on the following criteria: value proposition of business model, incorporating innovative use of technology to serve customer needs and reach under-served segments; ability to manage a prudent and sustainable digital banking business; and growth prospects and other contributions to Singapore’s financial centre.

MAS also took into consideration the eligible applicants’ reviews of the business plans and assumptions underpinning their financial projections arising from the impact of the COVID-19 pandemic.

The regulator signaled that it is open to granting more DWB licenses in the future.

Also Read: SMEs consider switch to digital banks: Visa survey

Ravi Menon, managing director of MAS, expressed the regulator’s belief that the new digital banks will further strengthen Singapore’s financial sector. They expect the upcoming digital banks to “thrive alongside the incumbent banks and raise the industry’s bar in delivering quality financial services, particularly for currently underserved businesses and individuals.”

Grab’s and Singtel’s respective CEOs expressed their delight in being amongst the successful applicants. Their consortium have already appointed Charles Wong as CEO of the digital bank venture.

The consortium shared that it is looking to fill around 200 roles by end-2021, in the areas of product, data, technology, risk, finance and compliance.

Two of the three local banking giants, UOB and DBS, shared their congratulations for the successful applicants.

“Their presence will add to the healthy competition, especially in the area of digital innovations, for the benefit of Singapore’s consumers and businesses,” UOB deputy chairman Wee Ee Cheong said in a media statement.

“We believe that the new entrants will spur us all on to do better and we will continue to focus on making banking more intuitive and invisible so that our customers can live more and bank less,” DBS’ Singapore country head Shee Tse Koon said in his statement welcoming the successful applicants to Singapore’s banking market, where he said that “digital banking is already a reality.”

Meanwhile, aspirant Razer Fintech, who was not granted a Singapore digital bank license, said that it will proceed with its plan to roll out Razer Youth Bank in other markets such as Malaysia and the Philippines.

Razer Fintech CEO Lee Li Meng also congratulated the successful applicants whilst floating plans to launch its banking proposition in other regions that include Europe, Middle East/ West Asia or even Latin America.