Singapore on Friday granted four firms, including Ant Group and Grab, licenses to run digital banks in the Southeast Asian country, in a move that would allow the tech giants to expand their financial services offerings.
The nation’s central bank, Monetary Authority of Singapore (MAS), said it applied a “rigorous, merit-based process” to select a strong slate of digital banks. As these digital banks start their pilot operations, MAS said it will review whether more companies could be granted this license.
A total of 21 firms, including TikTok-parent firm ByteDance, had applied to get a digital license, of which 14 met the eligibility criteria, MAS said. Tech giants see a major opportunity in expanding to financial services as a way to supercharge their revenue in the rapidly growing region.
The other two licenses went to an entity wholly owned by internet giant Sea, and a consortium of Greenland Financial Holdings, Linklogis Hong Kong and Beijing Cooperative Equity Investment Fund Management.
Like traditional banks, Grab-Singtel and Sea will be able to offer customers banking accounts, debit and credit cards and other services. Digital wholesale banks — the licenses of which went to Ant-owned entity and Greenland Financial consortium — will serve small and medium-sized businesses. None of them will be required to have a physical presence.
“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,” said MAS MD Ravi Menon in a statement. A handful of countries, including the U.K., India and Hong Kong, have streamlined their regulations in recent years to grant tech companies the ability to operate as digital banks.
Ride-hailing firm Grab and telecom operator Singtel formed a consortium last year to apply for the digital full bank license. Their combined experience and expertise “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,” said Anthony Tan, Group CEO & co-founder of Grab, in a statement Friday.
“Over the years, Ant Group has accumulated substantial experience and proven success, especially in China where we work with partner financial institutions to serve the needs of SMEs,” Ant Group said in a statement. “We look forward to building stronger and deeper collaborations with all participants in the financial services industry in Singapore.”