StanChart Singapore mulls digital-only bank under 'rooted foreign bank' framework

Singapore

STANCHART Singapore on Friday told The Business Times it is exploring an additional banking licence under the Significantly Rooted Foreign Bank (SRFB) framework in Singapore.

In doing so, it would build something similar to its digital banking outfit, MOX, in Hong Kong, it said.

StanChart Singapore was in August named the country's first SRFB, with the Monetary Authority of Singapore looking to further boost the SRFB framework to possibly offer an additional full bank licence.

This would allow an SRFB to set up a digital-only bank as a separate unit and with a smaller paid-up capital, in the same way the three Singapore banks can do so here.

The bank also confirmed with BT that it did not submit an application for the digital full bank licence.

"We are naturally interested in qualifying for the recently-announced enhanced SRFB framework to further deepen our presence here," said a spokesperson. "This will give us the option to explore an additional banking licence. Under this construct, we would look to leverage on the technology and experience gained from MOX, our digital bank in Hong Kong, to operate a similar platform in Singapore together with a strong ecosystem partner."

For now, as an SRFB, StanChart is allowed 50 places of business (POBs), of which up to 35 may be branches. As a qualifying full bank (QFB), StanChart Singapore was allowed 25 POBs. As at August, it had 18 POBs, 16 of which are branches.

The SRFB framework was announced in 2012, with SRFBs only awarded as part of an overall package negotiated under free trade agreement (FTAs) with these QFBs' home countries, and to QFBs that are "significantly rooted" here.

The FTA between the European Union and Singapore paved the way for StanChart Singapore to raise its presence in the Republic under the SRFB framework.

The first FTA that includes SRFB commitments, the EU-Singapore Free Trade Agreement (EUSFTA), entered into force on Nov 21, 2019. StanChart Singapore is also the first QFB to qualify for SRFB privileges under the EUSFTA commitments.

The bank said that Singapore is a key market for Standard Chartered, with Singapore its second-largest market after Hong Kong.

In 2019, StanChart Singapore became the first and only international bank to incorporate all its businesses in Singapore. It is now the largest foreign banking subsidiary here. It is also the only international bank that has adopted Singapore as its global operational and innovation headquarters, with a significant share of its global management team based here.

"We have a very robust record in digitalisation and digital banking, and we will continue to invest and explore the best digital model for our clients in Singapore," the spokesperson said.

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