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Licensees will now be able to provide retail customers with services such as account openings, deposits, as well as debit and credit cards.

Jacky Yap  |  SG
Published 2020-12-04 19:08:04
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[Updated on 5 December 2020 with new licensees]

The Grab-Singtel consortium as well as e-commerce giant Sea — the parent company of Shopee — has just won the digital full banking license awarded by the Monetary Authority of Singapore (MAS).

It also awarded digital wholesale bank licences to Jack Ma’s Ant Group, as well as a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management.

With the opening of digital bank license applications, Singapore is taking a big step forward in fintech as non-bank players enter the market and serve consumers and businesses for the first time.

First announced in June 2019, MAS is awarding a total of five licenses: two digital full bank licenses which allow licensees to serve retail customers and take deposits, as well as three digital wholesale bank licenses to serve small and medium-sized enterprises (SMEs) and non-retail segments.

The four successful applicants beat 10 other contenders, such as Razer Youth Bank and Beyond consortium led by Osim founder Ron Sim’s V3 Group and EZ-Link.

What Will The License Allow Them To Do?

With the new digital banking license, the two entities will now be able to provide retail customers with services such as account openings, deposits, as well as debit and credit cards.

Digital full banks are also able to serve corporate customers.

However, all banking services will be done online — there will be no physical branches or ATMs.

According to MAS, the new digital banks will likely commence operations starting 2022.

The licenses are currently introduced as a pilot so MAS is looking to review whether it should grant more digital wholesale bank licenses in the future.

Ravi Menon, managing director of MAS, said in a statement that they applied a “rigorous, merit-based process to select a strong slate of digital banks.”

“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. They will further strengthen Singapore’s financial sector for the digital economy of the future,” he added.

anthony tan grab founder
Anthony Tan, Group CEO and co-founder of Grab / Image Credit: Digital New Asia

Anthony Tan, Group CEO and co-founder of Grab, shared that they “are honoured to have this opportunity to build Singapore’s next generation digital bank, and open up 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 deep tech expertise and data-driven insights, 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.”

Commenting on the new digital banking entrants, Shee Tse Koon, Singapore Country Head of DBS Bank said that she welcomes them.

“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,” she said.

Featured Image Credit: Reuters / Singtel / Sea / Chen Zhongqiu via Getty Images

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