Singapore to have 4 digital banks, with Grab-Singtel and Sea getting digital full bank licences

The Monetary Authority of Singapore (MAS) said on Friday (Dec 4) it will award digital full bank licences to the Grab-Singtel consortium and tech giant Sea, in a first for the city-state and a highly anticipated move that aims to liberalise the financial industry.

Like traditional banks, these players will provide retail customers with services such as opening accounts, deposits as well as issuing debit and credit cards. However, digital banks will not have a physical presence and all banking services will be done online.

This is different from traditional banks – such as DBS, OCBC and United Overseas Bank – which offer some banking services via the Internet or mobile apps. Digital full banks can also serve corporate customers.

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

Greenland Financial is the investment arm of Chinese real estate developer and state-owned enterprise Greenland Group, while Linklogis Hong Kong is a supply chain financing firm. Digital wholesale banks can serve corporates and small and medium-sized enterprises.

MAS said in a statement on Friday that the successful applicants must meet all relevant prudential requirements and licensing preconditions before MAS grants them their banking licences.

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

They are expected to start business from early 2022. MAS chief Ravi Menon said the central bank 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 said.