Singapore digital banking race heats up with Chinese players


FINANCIAL technology (fintech) firm iFast Corp Ltd and Jack Ma’s Ant Financial Services Group have thrown their hat into the ring for Singapore’s first digital banking licences, just in time for tomorrow’s deadline.

iFast, leading a consortium comprising China’s Yillion Group and Hande Group, noted in a filing with the Singapore Exchange last Friday that it has submitted an application for a digital wholesale bank licence in the country.

Its chairman and CEO Lim Chung Chun said the banking and wealth management industry will also become increasingly globalised, and business models will become increasingly digital.

“As a leading wealth management fintech platform, iFast and the partnerships we have formed are able to introduce digital wealth management solutions that embrace the globalisation wave.

“We see an iFast-led digital bank as being able to tap on Singapore’s growing role as a leading wealth management centre that can become a ‘Global Wealth Management Hub for the Mass Affluent’,” he said.

Lim believes a digital banking licence will bring solutions to a market segment that has been underserved by banks, including the small and medium enterprises (SMEs) market.

There is currently a big opportunity in Singapore for a new bank to become the “Bank of Choice for SMEs”, particularly for loans, he added.

Ant Financial has also confirmed its bid for a digital wholesale bank licence in Singapore.

“In line with our commitment to promoting financial inclusion globally, we have submitted an application to the Monetary Authority of Singapore (MAS) for a digital wholesale banking licence,” an Ant Financial spokesperson told South China Morning Post on Jan 2.

“We look forward to contributing to the development of the digital banking landscape in Singapore,” the spokesperson added.

MAS senior minister and chairman Tharman Shanmugaratnam announced in June 2019 that Singapore’s central bank will issue up to two digital full bank licences, which allow licensees to provide a wide range of financial services and take deposits from retail customers; and three digital wholesale bank licences, which allow licensees to serve SMEs and other non-retail segments.

In August last year, MAS began accepting applications for new digital banking licences in the country. Among the contestants are e-hailing firm Grab Holdings Inc and Singapore Telecommunications Ltd, who are jointly bidding for a digital full bank licence under a 60:40 partnership.

The consortium plans to establish a digital bank that targets consumers who prioritise digital transactions, as well as SMEs which lack access to credit.

US-based gaming company Razer Inc is also collaborating with Singaporean entrepreneurs and Asian billionaires for a slice of Singapore’s digital banking pie.

Razer will own 60% interest in the consortium, while five partners — Sheng Siong Holdings Pte Ltd, FWD Group, LinkSure Global Holding Ltd, Insignia Ventures Partners and Carro — will be holding the remaining 40%.

China’s ByteDance Technology, which owns the video-sharing platform TikTok, is also reported to have submitted an application for a full digital banking licence.

Singapore’s digital banking race follows in the footsteps of Hong Kong, which handed out eight virtual banking licences last year to companies including Ant Financial, Xiaomi Corp and Tencent Holdings Ltd, as well as consortia led by Standard Chartered plc and BOC Hong Kong Holdings Ltd.

Malaysia’s central bank also said last month it would be issuing up to five digital banking licences, after releasing an exposure draft on the licensing framework for the sector.