Singapore Digital Bank Licenses: We Got Our Winners for The Full and Wholesale Bank Licenses
Ming Fengā
Monetary Authority of Singapore (MAS) Issues Digital Licences
This just in!
MAS has awarded digital full bank licences to Grab-Singtel and Sea.
On top of that, MASĀ also awarded Ant and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong, and Beijing Co-operative Equity Investment Fund Management with digital wholesale bank licences.
The applicants must meet all requirements and licensing preconditions.
The digital bank licenses can be broken down into
- Up to two digital full bank licences
- Up to three will be digital wholesale bank licences
The difference between the two types of licenses is simple.
Digital Full Banks
Digital full banks are allowed to take deposits from retail customers like any of us.
This function is something familiar to all Singaporeans with a savings account.
Very much like the DBS banks and OCBC banks which we are familiar with, but fully digitalised.
Simply put, all your banking services will be done online without the need to head down to a physical branch.
Digital Wholesale Banks
Digital wholesale banks are more catered towards the non-retail part of banking.
Think along the lines of providing banking services that cater to the monetary needs of small and medium-sized enterprises (SMEs).
Singapore Digital Bank License: 14 Applicants Shortlisted, 4 Awarded
Out of the total 21 applicants that submitted their applications for the banking license, 14 of them were shortlisted.
As of today, MAS awarded the Grab-Singtel consortium, Sea with the full banking licences. Singaporeans can expect two new full digital banks in town.
Ant and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong, and Beijing Co-operative Equity Investment Fund Management got the wholesale bank license.
The applicants presented their proposals via virtual meetings over the past few months alongside their competitors before emerging as winners.
They will be evaluated based on:
- sustainability
- business model
- value proposition
- use of technology
These were some of the applicants who got shortlisted back then:
| Applicants/ Consortiums | Type of Digital Bank License | Shortlisted Applicants | Winner? |
|---|---|---|---|
| Singtel and Grab | Digital Full Bank License | Yes | Winner |
| Sea Limited | Digital Full Bank License | Yes | Winner |
| Razer, Sheng Siong Holdings, FWD, LinkSure Global, Insignia Venture Partners and Carro | Digital Full Bank License | Yes | - |
| V3 Group, EZ-Link, Far East Organisation, Singapore Business Federation, Sumitomo Insurance Co Ltd and Heliconia Capital Management | Digital Full Bank License | Yes | - |
| MatchMove's consortium with Singapura Finance | Digital Full Bank License | Yes | - |
| Standard Chartered and NTUC Enterprise | Digital Full Bank License | TBC | - |
| Ant Financial | Digital Wholesale Bank License | TBC | Winner |
| iFast Corporation, Hande and Yillion | Digital Wholesale Bank License | Yes | - |
| ShengYe Capital, Phillip Capital and Advance AI | Digital Wholesale Bank License | Yes | - |
| AMTD, Xiaomi, SP Group and Funding Societies | Digital Wholesale Bank License | Yes | - |
| Greenland Financial Holdings, Linklogis Hong Kong, and Beijing Co-operative Equity Investment Fund Management | Digital Wholesale Bank License | Yes | Winner |
What Does Digital Banking Even Mean?
What on Earth does digital bank even mean? How does it affect Singaporeans?
A simple way to looking at this is your usual retail bank going fully online. All our usual banking activities are now done with the lack of a physical bank branch.
Singaporeans can now perform these activities with the help of their mobile devices and by going online.
Should the digital banks do a really good job in digitalising the way traditional banks perform certain activities such as:
- Depositing money
- Withdrawing money to make payments
- Transferring money
- Savings account management
- Applying for loans and financial products
- Paying our bills
How Singaporeans Can Benefit from Digital Banks?
Singaporeans will be able to benefit a more efficient banking system at the convenience of their fingertip.
On top of that, digital banks can take a step further with more personalisation when it comes to product recommendations from all the data they have gathered.
Having recognised that digital banks have less overhead to upkeep, the cost of maintaining bank branches and ATMs can translate into higher interest rates for customers. Other benefits include:
- Lower fees since there will probably be no middleman for every financial product sold to me
- Way better customer service since the lack of bank branch will mean that digital banks investing more into their customer service to gain trust and loyalty of their customers.
- Save the Earth! With digitalisation, there will be fewer application forms to fill.
Some of these benefits have their downside too.
With convenience, there is also a chance that your privacy will be breached. Security breach on the bank’s network will also be another concern to consumers.
Examples of Digital Banks Around the World
The concept of a digital bank is not something new. This concept has been adopted around the world.
Here are some examples of digital banks around the world:
- Neat – Hong Kong
- Doconomy – Sweden
- Up Banking – Australia
- Starling Bank – United Kingdom
- Chime – America
- Ant Financial – China
- WeBank – China
- Kakao Bank – Korea
- Tencent Financial Technologies – China
Some of these names should be of no stranger to any of us.
What Can Singaporeans Expect in the Upcoming Months?
Building up to end 2020, we will be seeing a lot more announcements on some of the applicants for the digital bank license.
Curious to see what’s in store?
Bookmark this article as we’ll update it with theĀ latest news on Singapore’s digital bank licenses.
