SBF, MSIG to join digital banking fray with Ron Sim's V3 consortium

IN A surprise twist, the Singapore Business Federation (SBF) will be joining a consortium led by Ron Sim's V3 Group and stored-card operator EZ-Link that is gunning for the digital full-bank licence in Singapore.

Sources tell The Business Times (BT) that the business chamber will be taking a minority stake of below 10 per cent, in a move to support small- and medium-sized enterprises (SMEs) in their funding needs.

Its entry looks likely to boost the consortium's connections in the SME segment, as it represents about 27,000 companies, as well as key local and foreign business chambers.

SBF was set up to champion the interests of the Singapore business community in the areas of trade, investment and industrial relations both locally and overseas. It is compulsory for all Singapore-registered companies with paid-up capital or authorised share capital of S$0.5 million and above to be members of the SBF.

Another new member to the consortium is insurer MSIG Singapore, making this digibank grouping the biggest seen so far with six members altogether.

BT earlier reported that V3 Group, EZ-Link, property group Far East Organization and Temasek-owned Heliconia Capital were teaming up for a full bank licence.

There are two digital full-bank licences on offer which allow licensees to collect deposits from retail customers and need an eventual capital requirement of S$1.5 billion. They will also need to be Singaporean-controlled.

SBF's CEO Ho Meng Kit had earlier told BT: "SBF is looking forward to the establishment of digital banks in Singapore as it will improve access to financing for our SMEs who may be underserved by incumbent financial institutions."

The SME segment, especially the micro-enterprises and startups, is often described as underserved as they tend to face more difficulty managing their finances and securing funding from traditional banks.

But since the consortium is going for a full-bank licence, it will also need to cater to retail customers. Its game plan could include providing financial wellness solutions to the underserved in the region, such as the SME workforce and their families.

Applications for the five digital banking licences - two retail and three wholesale - closed on Dec 31, 2019.

The Monetary Authority of Singapore is expected to announce the results of the digital banking applications by mid-2020.

Other players which have confirmed that they have thrown their hats into the ring for the digital full-bank licence include Grab and Singtel, as well as a Razer-led consortium.