Singapore may soon allow virtual banks: DBS CEO

Gupta, however, believed that they may not pose a significant threat.

Singapore may soon follow close regional competitor Hong Kong in issuing virtual bank licenses, DBS CEO Piyush Gupta told Bloomberg in an interview, although he downplayed the impact of new competitors to the city's three banks.

“I see no reason why it would not,” said DBS CEO Piyush Gupta, when asked whether the Singapore authorities might issue similar licenses to Hong Kong.

Any newcomers with virtual capabilities, however, shouldn't pose a significant threat to existing banking operations as incumbent lenders have already been upgrading their digital capabilities in response to heated competition from fintechs and foreign banks. “To my mind, that’s just basically giving a few more banking licenses,” he added.

If virtual banks were allowed to operate on more lenient terms than incumbents, for example in terms of their required capital, only then would it be challenge. "The real challenge is if the regulators create an unlevel playing field, and let the new bank licensees come in and do banking on different terms,” he said.

Here's more from Bloomberg.