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Singapore to issue digital bank licences

Singapore to issue digital bank licences

The Monetary Authority of Singapore (MAS) plans to issue up to five new digital bank licences as it seeks to open up the island's market to non-bank players.

Up to two licences will go to providers targeting retail customers, with the other three earmarked for outfits aimed at SMEs and other non-retail segments.

Applications, which open in August, are open to firms headquartered in Singapore and controlled by Singaporeans. Foreign companies can apply if they form a joint venture with a local player.

Singtel, Grab and Razer - each of which have been expanding into financial services - may find the new liberal licensing regime appealing. Money transfer operator InstaRem has already thrown its hat into the ring.

MAS says that new entrants will add diversity to Singapore's banking market and help reach underserved market segments, as well as push incumbents to improve their digital services. The move will also put the island on a par with Hong Kong, which doled out its first licences in March to help spark innovation in the city and strengthen Hong Kong’s position as an international financial hub.

Tharman Shanmugaratnam, chairman, MAS, says: "The new digital bank licences mark the next chapter in Singapore’s banking liberalisation journey. They will ensure that Singapore’s banking sector continues to be resilient, competitive and vibrant."

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