China’s Ant Financial joins Razer, Grab in contest for Singapore digital banking licence
- Southeast Asia’s digital lending market is expected to grow from US$23 billion in 2019 to US$110 billion by 2025
China’s fintech giant Ant Financial has applied for a digital wholesale banking licence in Singapore, joining the city state’s digital banking race to create virtual lenders after gaming start-up Razer and ride-hailing company Grab applied for full banking licences in the same week.
“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 the South China Morning Post on Thursday. “We look forward to contributing to the development of the digital banking landscape in Singapore.”
Last June the MAS unveiled plans to grant as many as five virtual bank licences to boost competition and innovation. Requiring capital of S$1.5 billion (US$1.1 billion), two will be full bank licences that will allow the applicant to provide a range of banking services to retail and non-retail customers. The other three will be wholesale licences, requiring capital of S$100 million, allowing applicants to provide services to small and medium enterprises as well as other non-retail customer segments.
“Singapore is already a well-served market – although there is still scope for technology-led innovators to compete, especially in servicing SMEs,” said James Lloyd, Asia-Pacific financial-technology lead for consulting firm EY. “A key question is how much technology can serve as a true differentiator in a relatively small market like Singapore – both in terms of reducing overheads and improving customer experience.”
Singapore’s move to open up its banking industry to technology companies comes after Hong Kong granted similar licences to companies including Ant Financial and Tencent Holdings earlier last year.
Southeast Asia’s digital lending market is expected to grow from US$23 billion in 2019 to US$110 billion by 2025, representing a 29 per cent compound annual growth rate, according to a report by Bain & Co, Google and Temasek Holdings.