Here Are The Contenders to Singapore’s Digital Banking Raceby Fintech News Singapore February 6, 2020
Singapore’s digital banking license was perhaps one of the most widely discussed topic in 2019 within fintech circles and we suspect 2020 will not be too different with MAS anticipated to issue licenses by mid-2020.
There were many speculations as to who are the contenders-to-be and there’s no shortage of aspirants announcing their interest to bid for the digital banking license.
With the deadline for application of 31st December behind us, the fog is lifted and we have a clearer picture of who still remains.
Unsurprisingly, there are already some who have decided to drop out of the race. The digital banking consortium consisting of OCBC, Keppel, Vertex and Validus has reportedly pulled out of the race.
Others have chosen not to pursue the license includes the likes of Nium (formerly known as InstaReM) and Revolut who cited the high capital requirements as the reason.
For now, these are the players that we are able to confirm, but there will be no doubt more announcements in the weeks to come and we will be updating this article accordingly.
Grab & Singtel
Grab and Singtel has confirmed that they are forming a consortium to apply for a full digital bank license. Grab will have 60% stake in this consortium whereas Singtel will have 40% stake.
The yet to be named consortium will aim to cater to the needs of digital-first consumers, who have come to expect greater convenience and personalisation, and SMEs which cite lack of access to credit as a key pain point.
The transition into a digital bank is a natural progression to both Grab and Singtel as they have both been doubling down on financial services like mobile payments and insurance.
Razer Youth Bank
Razer will be leading a consortium consisting of Sheng Siong Holdings, FWD, LinkSure Global, Insignia Venture Partners and Carro to bid for a full digital bank license. Razer will be taking a majority stake of 60% and the partners named above will be taking the remaining equity interest in Razer Youth Bank.
The mix in this consortium is both diverse and interesting with players who are in the space of supermarket chains, insurance, mobile internet, venture capital and used car marketplace.
As the name would suggest the digital bank aspirant will be targetted at a digitally savvy youth. They claimed that if approved Razer Youth Bank will be the “world’s first global youth bank” which is a strange claim seeing as most if not all neo-banks and digital banks are targetted at the same segment.
Alibaba Group(NYSE: BABA)’s fintech arm Ant Financial has also confirmed that they have applied for a wholesale digital bank license. The Chinese fintech giant was also among the 8 licensees granted a digital bank license in Hong Kong. Back in Mainland China, Ant Financial is also behind MyBank one of the virtual banks operating in China.
Ant Financial were among the many Chinese firms who have previously stated their interest to bid for Singapore’s digital banking license.
The group majority stake in popular e-commerce site Lazada could potentially provide them a competitive advantage.
iFast Corporation, Hande & Yillion
Wealth management firm and mainboard listed iFast Corporation confirmed that they have also applied a digital banking license with two Chinese partners namely — Yillion Group and Hande Group.
Yillion Group operates a digital bank in China and Hande Group is a fintech firm founded by the former Chairman of WeBank — a digital bank backed by the Tencent Group.
The newly formed consortium is reportedly eyeing the underserved SME sector in Singapore.
Reports from BT have indicated the ByteDance the Chinese firm behind popular social video-sharing app TikTok has also joined the race to apply for a wholesale digital banking license in Singapore.
We’ll provide updates on ByteDance’s application once we are able to verify this information.
The BEYOND consortium announced Sunday their bid for a full digital banking license in Singapore.
Led by V3 Group and EZ-Link this consortium also sees participation from property developer Far East Organisation, Singapore Business Federation, Sumitomo Insurance Co Ltd and Temasek’s subsidiary Heliconia Capital Management.
V3 Group is best known for being behind like OSIM and TWG, while EZ-Link is no stranger to Singaporeans who uses this contactless payment card daily for their commute.
The BEYOND digi-bank consortium much like the others are also focused on the SME segment, with the Singapore Business Federation taking a minority stake of below 10%, the consortium could potentially tap SBF’s network of 27,000 companies
ShengYe Capital, Phillip Capital & Advance AI
Supply chain finance company Sheng Ye Capital, financial conglomerate Phillip Capital and AI-focused fintech firm Advance AI’s announced that they are also bidding for a wholesale digital banking license in Singapore.
The trio said that the consortium’s goal is to build a “data-driven, next-generation bank” focused on the SME segment. Both Philip Capital and Advance AI are backed by Temasek’s subsidiary, Pavillion Capital.
AMTD, Xiaomi, SP Group & Funding Societies
AMTD led consortium consisting of Xiaomi, SP Group and Funding Societies announced that they too are throwing their hat in the ring for a digital wholesale banking license. In Hong Kong, AMTD and Xiaomi’s joint venture named Airstar Bank successfully secured a digital banking license in 2019.
AMTD Group is a non-bank financial institution that provides capital markets and advisory, asset management, insurance brokerage, and strategic investment services. Meanwhile, Xiaomi is primarily known as a smartphone brand, but it also has made stakes into fintech.
SP Group is a government-owned electricity and gas distribution company in Singapore and Funding Societies is a P2P lending platform operating across South East Asian markets.
Enigma, Blockchain Worx, 2359 Media, Qrypt Technologies
Enigma Group is leading a consortium that includes UK-based Enigma Global Holdings, which recently entered a deal to acquire an existing challenger bank, as well as Blockchain Worx, a regtech firm, 2359 Media, an app developer, and Qrypt Technologies, a Singapore-based management consultancy.
The consortium has applied for a digital full bank license. The proposed digital bank aims to focus on the underbanked small and medium-sized enterprises and the fast-evolving digital workforce, according to a report by the Straits Times.
Internet group Sea has applied for a digital full bank license, becoming the first applicant to go solo for that category, according to a Bloomberg report.
The digital bank would focus on addressing the unmet needs of millennials and small businesses using technology.
Sea, which counts Tencent as its largest outside shareholder, has two main operating divisions: Shopee, an online shopping platform in Southeast Asia and Taiwan, and gaming arm Garena. Sea also has a digital financial services arm called SeaMoney.
Singapura Finance & MatchMove Pay
Finance firm Singapura Finance and digital payments startup MatchMove Pay have partnered to apply for a digital full bank license, reports the Business Times. It is still unclear at this time if more companies are involved in the consortium.
MatchMove Pay operates a digital wallet that allows businesses to make online and offline payments via prepaid cards issued instantly. The startups is headquartered in Singapore with offices in India, Indonesia, Vietnam and the Philippines. Singapura Finance has a minority stake of about 1.6% in MatchMove Pay, according to Finews Asia.
Arival was founded in 2017 as an internal venture spun out of fintech-focused venture capital firm Life.Sreda. The digital bank contender aims to meet the needs of tech startups including blockchain and crypto-related businesses, online businesses and entrepreneurs from co-working spaces.
Arival intends to bundle fintech products from third party services providers on one banking platform powered by open application interfaces (APIs), and plans to offer its own banking-as-a-service platform for other fintechs to leverage.
Asia Digital Bank Corporation
Asia Digital Bank Corporation is a Chinese-dominated consortium that includes software giant Shanghai Jifu and fintech-focused JIC Technology Investment. The consortium has applied for a digital wholesale bank license, according to a report by Finews Asia which cites the Business Time.
Asia Digital Bank Corporation aims to provide same-day payment, settlement, and cross-border remittance services for SMEs, among other customized products. The digital bank would leverage the experience and resources of all its partners, and use technologies including blockchain and artificial intelligence (AI).
Greenland Financial-led consortium
Greenland Financial, the investment arm of Chinese real estate giant Greenland Group, is leading a consortium which includes Chinese financing platform MinIPO.
The consortium has applied for a digital wholesale bank license and plans to use technologies developed by its members to serve SMEs in Singapore, reports Finews Asia.
Zall Smart Commerce, Marubeni and GeTS
Zall Smart Commerce Group, a Chinese company operating a leading business-to-business (B2B) trade platform in China and Southeast Asia, is leading a consortium comprising Japanese trade conglomerate Marubeni Corporate and Singapore supply chain platform provider Global eTrade Services, reports the Business Times.
The consortium has applied for a digital wholesale bank license and aims to bridge the funding gap and support the expansion of local SMEs and micro-SMEs across the region.
Since 2017, Zall has been operating Z-Bank, one of the top five Chinese digital banks. The firm said it will bring its digital capabilities, including AI, blockchain and big data, to the consortium.