Razer teams up with partners including Sheng Shiong, FWD to join Singapore’s digital banking race

Gaming company Razer has teamed up with home-grown Singaporean entrepreneurs and Asian billionaires to apply for a full digital banking license, joining the race to create virtual lenders in the city state.

Razer Fintech, the company’s financial technology unit, will own a 60 per cent stake in the group, while five partners will hold the remaining 40 per cent, according to a statement.

They are Sheng Siong Holdings, the private company of the Singaporean Lim brothers behind a popular local supermarket chain; billionaire Richard Li’s insurance company FWD Group; internet entrepreneur Chen Danian’s tech company LinkSure Global Holdings; Insignia Ventures Partners; and Carro, an online car marketplace.

Razer’s consortium is the second group to submit an application for the digital full banking license after Grab Holdings and Singapore Telecommunications announced their joint bid on December 30. The Monetary Authority of Singapore is set to announce the winners of five digital banking licenses in mid-2020.

Efforts to open up the Singapore banking industry to technology companies come on the heels of a similar move in Hong Kong, where units of Ant Financial and other Chinese firms including Tencent Holdings obtained licenses.

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Southeast Asia’s digital lending market is expected to more than quadruple to US$110 billion by 2025, according to a report by Bain & Co, Google and Temasek Holdings. Instead of fighting local banks, Razer Fintech plans to target the youth and millennial segment in Singapore. But eventually, it aims to roll out globally as Razer Youth Bank, making it the first bank of its kind.

“Youth and millennials are underserved even in a crowded space like Singapore,” said Lee Li Meng, Razer’s chief strategy officer who assumed an additional role as chief executive officer of Razer Fintech from January 1.

Targeting those in the age group of 12 to 35 years, he said many young people grow up with little financial knowledge. When they join the workforce they struggle to open a bank account or get a credit card or loans due to lack of savings and credit history. “We want to help them from a young age,” Lee said.

Razer is trying to leverage on its large, young fan base and its existing digital payments networks Razer Merchant Services and e-wallet service Razer Pay. It is also looking to its global presence – the company is based in Singapore and San Francisco but has retail stores in places like London, Las Vegas, Hong Kong and Taipei – to boost its digital bank’s international prospects.

The company is trying to capitalise on younger consumers who use their mobile phones to read, chat and play, and stream music and videos. Such users will expect to use mobile phones to manage their money and trade stocks for more convenient and speedier services, Lee said.

Razer co-founder and CEO Min-Liang Tan has been trying to build an ecosystem of software and services for gamers to reduce Razer’s reliance on hardware peripherals such as gaming mice and keyboards. It got into the digital wallet business by acquiring e-payments platform MOL Global.

Since forming Razer Fintech as a separate entity in April 2018, it has built a large digital payment network in Southeast Asia and processed more than billions of dollars in total payment value. Razer Fintech has about 200 employees and some of its most prominent hires include Lim Siong Guan, former president of GIC, Singapore’s sovereign wealth fund.

“We’ve thought about this long and hard,” Lee said. “We believe that we can do something revolutionary here in Singapore.”