Maybank could be in the running for digital banking licences

Singapore

MAYBANK Singapore could be in the running for one of the five digital banking licences up for grabs, and is in talks with its head office in Malaysia on the matter, revealed Alvin Lee, Head of Community Financial Services Singapore and Group Wealth Management, Maybank.

As of now, all its options are on the table, including whether to do it solo through the existing Internet-only bank framework, or to apply for the digital full-bank licence or the digital wholesale bank licence with a partner.

"I think the bank is very open to any of the three options," he told The Business Times. "We are definitely in internal discussions on whether we should be in or out."

As its current licence already allows Maybank to establish a digital bank, Mr Lee said its decision on whether or not to apply for the new digital bank licences lies in whether it is able to come up with a new value proposition, which the bank is still strategising on.

The digital full-bank licence will allow it to provide a wide range of financial services and take deposits from retail customers, while the digital wholesale bank licence will allow it to serve SMEs and other non-retail segments.

According to him, this hinges on securing the "right partner" with the right capabilities to complement Maybank's strengths and augment its weaknesses.

"We can be the 'fin' (in fintech) and we look for a 'tech' partner - or something like that," he suggested, as an example of potential collaborators.

But such an undertaking would require the bank to work with a regional player, and not just one that operates solely in Singapore, he noted.

The bank is said to be working with the head office to source for such partners, as Maybank Malaysia is leading the digital initiative for the group.

Even as the bank mulls its options, Mr Lee is confident that there is room for both digital banks and incumbent banks in Singapore.

"We believe they can co-exist and complement each other as the target segments are different," he explained.

Digital banks are seen as more likely to target underserved small businesses, while incumbent banks have traditionally been serving established SMEs with a track record.

"At this stage of application submission, I foresee qualified incumbent banks might be looking at broadening its services and offerings should there be a suitable fintech or technology partner," he added.

This comes after news last week that Singapore's second largest lender OCBC is in talks with telco Singtel to land a digital banking licence.

With applications due to open by the end of this week, various non-bank players in Singapore have indicated interest, including ride-hailing unicorn Grab, mainboard-listed fintech firm iFast Corporation, peer-to-peer lender Validus Capital, e-wallet player Liquid Group, and gaming hardware manufacturer Razer.

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